financial statements from Associated British Foods plc
Obtain the recent set of financial statements from Associated British Foods plc, a fully trading publicly limited UK company.
You are required to prepare a report for a potential investor, advising them as to whether they should invest in “Associated British Foods plc”.
Prepare a report as to the financial performance of the company over the period that the financial statements cover (i.e. the two years).
Use only the information provided within the financial statements and the notes to the accounts.
The report should cover the following:
- An in-depth analysis of the performance of the business, using actual figures, appropriate ratios, and an interpretation of these.
All calculations should be included as an appendix, and therefore do not form part of the wordcount.
- A critical analysis of using financial statements as a tool to analyse the financial performance of a company.
- An explanation of what other information is needed to improve the analysis.
Task 2 begins on next page.
Laila Ltd is a privately-owned trading company that operates as clothing, footwear and home products retailer in Scotland. The latest set of financial statements shows that it had a turnover of £2.5 million, with net assets of £3m (including a cash balance of £0.5 m). The company is 100% owned by two brothers (each owning 50% of the ordinary share capital).
The Directors are considering the need for a new store in Edinburgh, and have been told that this would cost £1.5 m in total to get it up and running.
Advise the directors of Laila Limited on the following:
- How to assess whether the project would be financially viable, and if the decision is made to go ahead, how the project would be financially managed and monitored
- How to fund the expansion
In both a) and b), you should critically analyse all suitable options, then advise (with reasons), which should be adopted by the Directors.