AC5062 Financial Reporting-non-financial relevant

The report should be structured with section headings, etc, and should be addressed to your supervisor (use your seminar tutor’s name).  The report should contain the following:

(a) Introduction

The introduction should summarise the aims and objectives of your report together with any limitations in this type of financial comparison.  It should also give a brief profile of each company, its markets and products and a brief commentary on its key operations and recent trading background.

(b)  Analysis

Use a selection of appropriate accounting ratios (you must choose the ratios) together with any other relevant data to evaluate the relative performance and financial status of the two companies.  The comparison should be made from the viewpoints of the companies’ key stakeholders (management, investors and lenders).  You may use ratios from FAME database, those published within the annual reports plus ratios calculated yourself (the workings for which should be shown in an appendix).  The comparison must be year on year for each company plus a comparison of both companies.

This part of the report must give evidence of your understanding of the interpretation of your chosen ratios and the data you are using.  The chosen ratios should be kept to a manageable number – the emphasis should be on quality rather quantity. 

(c) Performance factors

Research and discuss any factors (financial and non-financial relevant to these two companies) that may have affected the companies’ performance during the periods under review, with reasons.  This must take into account the performance of the different segments of the businesses as shown in the annual reports as well as all other relevant factors.  These factors must be specific to your chosen companies.  This information can be obtained from various commentaries, examples: within the annual reports, corporate websites, trade journals, financial press websites and FAME database.  You must show the source of the information that you use in this section.

The following criteria will be used in assessing your work:

1. Evidence that you can apply your knowledge of financial analytical tools to a specific company.

2. Demonstration of your understanding of the implications of the environment in which the company operates and its ability to perform well.

3. Evidence of your capability to search for and use source material.  A reading list should be given.  All sources used should be specifically cited as mentioned.  Good use of citations enhances the credibility of your findings, as they demonstrate that you have carried out an adequate search for information and can substantiate your views.