CORPORATE FINANCIAL MANAGEMENT

M26322 ADVANCED CORPORATE FINANCIAL MANAGEMENT

 

Assessment for the module is 100% by coursework

 

The coursework is comprised of two parts:

 

• PART A

 

70% Report (pages 3 to 10)

 

2000 words

 

Submission deadline: Monday 11 January 2021 (23.55 UK time)

 

A suggested report layout is provided on page 18.

 

• PART B

 

30% Reflective exercise (pages 11 to 15)

 

1000 words

 

Submission deadline: Monday 18 January 2021 (23.55 UK time)

Please note the assessment criteria on pages 16 to 17.

 

SUBMISSION DETAILS

 

PLEASE FOLLOW CAREFULLY

• ONE file should be submitted for each part of the coursework.

 

• *** THE FOLLOWING REQUIREMENT IS IMPORTANT ***

 

The filename submitted should clearly indicate your student number:

 

Example:

 

UP123456_ACFM_Report

UP123456_ACFM_Reflective-Exercise

 

• Please include your student number as a header on every page of the files submitted.

 

PART A (70%)

 

REPORT

70% REPORT TASKS

 

Introduction

 

1. You are a consultant required to prepare a report to the director of your consultancy responding to the questions outlined on the following page.

 

2. Please select an example of a merger or acquisition that has taken place since January 2019. The target company should be a European company. Ideally the target company should be a listed entity as more financial information will be available to assist with the report. If the target company is a private company, it is also possible but may require greater analysis to answer the questions for the report.

 

3. Please note that a maximum of 20 twenty students may choose the same case-study.

 

4. During “Coursework Preparation Week” (week beginning 7 December 2020) we will use our classes together to respond to any coursework-related questions.

 

5. Choices will be allocated on a first come first served basis.

 

6. In the event your first choice is no longer available, your second choice will be allocated wherever possible:

  

7. Please use the following Google Sheet link to reflect your company choice which will be confirmed by the module leader:

 

https://docs.google.com/spreadsheets/d/1phlKtGDzUc9J9OpbaPaCJfP7pSxYmG_kppexuq_6FJQ/edit?usp=sharing

 

Please choose your company by Monday 16 November 2021

Questions to frame your report

 

THESE ARE THE QUESTIONS YOU MUST ANSWER USING YOUR CONFIRMED CASESTUDY:

 

The questions for the report are the same regardless of case-study allocated to you.

 

The questions are as follows and account for equal marks in the report:

 

• In terms of the industry case that you have selected, analyse briefly the sectoral activity over the past 3-5 years and industry trends towards consolidation or otherwise.

 

• Critically appraise the factors that have led to the acquisition / merger and the terms of the acquisition / merger. What factors would appear to your team as the key due dilligence issues:

 

1. leading up to the acquisition or merger, and
2. subsequent business integration concerns?

 

• Using the data available,

 

1. using the different business valuation techniques available to you, show with supporting calculations the range of valuations possible for the target business.
2. assess the appropriateness of the valuation of the target enterprise;
3. is the target company a private company? If so, what adjustments have you made in arriving at your suggested valuation?

 

• Explain the regulatory regime(s) applicable and the role, if any, of supervisory bodies in this regard. (If the deal has not already closed, please indicate based on previous merger activity, the likelihood in your view of the deal obtaining regulatory approval or not.)

 

• Describe the current risk environment facing the industry and identify steps being taken to mitigate these risks. Assess whether these risks have changed in any way since the acquisition or merger took place.

 

For each of the above 5 questions, 20 marks are available.

As an approximate marking guide when reviewing your results and feedback for questions 1, 2, 4 and 5, a score of 8 marks out of 20 reflects a good attempt, up to 12 marks means a very good attempt and a score above 12 marks shows that you have performed very well, especially in relating the background detail in your case to the question at hand.

In question 3, part (a) attracts 12 marks, reflecting techniques, calculations and relevant assumptions, part (b) attracts 4 marks and finally part (c) attracts 4 marks.

PLEASE NOTE THE FOLLOWING:

 

Your analysis for the report should be taken from appropriately referenced industry-related sources available on the internet as well as being supported by emerging academic thought in the area. Particular attention should be paid to citing relevant academic articles that support your arguments.

 

• A minimum of 15 quality academic journal publications should be referred to. Your findings should be presented as concisely as possible and in a manner understandable by the director of your consultancy. The articles referred to should be included in an appendix to the report.

 

• Please take care to present your discussion in report form together with appendices and recommendations where applicable.

 

• In summary, please make sure to focus on the following key items when preparing your report:
  • Accurate calculations with clearly stated assumptions where required
  • Strong academic discussion with recommendations in report format
  • Referencing quality
  • Presentation and layout of report to avoid losing ‘professional’ marks

 

• Mark distribution (see earlier section for further guidance):

 

For each of the report questions identified above (sectoral activity, acquisition factors, valuation calculation, regulatory regime, risk environment), 20 marks are available.

 

This gives a total of 100 marks for the report.

 

USEFUL WEBSITES:

 

Together with the related corporate website for the respective merger / acquisition being discussed, the following websites may be useful for your research also (remember that full access to the Financial Times is available to students with details found on Moodle):

 

www.ft.com

www.bloomberg.com

www.marketwatch.com

https://finance.yahoo.com/

http://www.reuters.com/

 

Regulatory authorities – EU / UK / USA:

 

http://europa.eu/rapid/latest-press-releases.htm

https://www.ftc.gov/about-ftc

https://www.gov.uk/government/organisations/competition-and-markets-authority

 

COURSEWORK PREPARATION & SUBMISSION – KEY POINTS TO REMEMBER / CHECKLIST

 

• The coursework report accounts for 70% of the overall module (see coursework for precise marking structure);

 

• Please note the following:

 

• Report format with a maximum of 2000 words excluding appendices and bibliography;

 

• Deadline for submission of the report Monday 11 January 2021 (23.55).

 

• The Moodle drop-box for submissions will be available in the Coursework Guidance / Assessment section on Moodle in advance of the deadline;

 

• Submissions should be made in pdf format (to include tables / appendices) in a single file via the dropbox found on Moodle;

 

ANY QUESTIONS?

 

• Questions regarding preparation of the report are welcome during our classes together.

 

• Students are also welcome to make appointments to discuss issues that they may have regarding the submission of their coursework.

 

• Requests by email from students to review draft submissions in advance of the submission date will be ignored.

 

• Sample reports are not provided – each cohort each year works differently. For any questions you may have, please contact us. Typical questions raised each year may be found on the following page.

 

• Students unfamiliar with preparing a report should book an appointment with “Study Support” before beginning to prepare their report. Study Support may be contacted at: studysupport@port.ac.uk

 

• Results of each submission will be made available automatically 20 working days after submission. Students will be kept informed of any delay in meeting the 20 day deadline.

  

Questions raised in previous years:

 

Is there a requirement to have an introduction and conclusion?

 

The output is a report so it should include a brief introduction and conclusion but the important task is to structure the report in line with the questions asked. So the report should have a section on “Sectoral Activity”, “Terms” or “Acquisition Factors” and so on.

 

What should I write in the ‘conclusion’?

 

Brief summary of your discussion and recommendations, if any.

 

Question 2 – due diligence leading up to the acquisition / merger and subsequent business integration concerns….

 

This question is asking you what are the issues that would have played a role or been an issue (a) before and (b) after the acquisition / merger took place.

 

Remember that before the deal is concluded, the parties are really getting to know each other – afterwards it is generally too late if the parties realise they made a mistake (a little like a marriage!) This question examines the business issues that are relevant in this context of the industry / sector concerned by your coursework.

 

Which methods should we consider for the purposes of carrying out the valuation?

 

We expect to see an attempt at four key valuation methods which should show a range of valuation results as follows: (a) asset-based (b) dividend valuation model (c) earnings-based (P/E) and (d) discounted cashflows.

 

Details supporting the calculations should be reflected in the appendices with a brief summary and discussion of the significance of the range of results in the body of your discussion. Other valuation approaches are welcome.

 

Growth rate beyond the ‘horizon’?

 

Please make a valid assumption and justify how the assumption was arrived at.

 

Where should we put our calculations?

 

Calculations should be set out in the appendices showing clearly where the numbers have been taken from.

 

How detailed should our calculations be?

 

Question Part 3(a) requires an attempt at providing calculations to support your valuation.

 

MAKE VALID ASSUMPTIONS, ATTEMPT THE CALCULATIONS USING THE FOUR TECHNIQUES DISCUSSED IN CLASS AND MOVE ON TO OTHER IMPORTANT QUESTIONS.

 

DO NOT SPEND ALL YOUR TIME ON THE QUANTITATIVE ISSUES – FAR MORE MARKS ARE AVAILABLE FOR THE QUALITATIVE DISCUSSION.

 

What is the “Literature Review” in the report? Is there a need for a Literature Review?

 

Given the constraints in terms of the word count for the report, we do not expect to see a “literature review” in the proper sense of the word.

 

This means that there is not a need for a section entitled “Literature Review” but the report should be suitably referenced reflecting sources used. We expect that the discussion should be supported by references from journal articles or academic commentators so as to evidence wider reading around the topic.

 

What is meant by the “appropriateness” of the valuation (question 3(b))?

 

Please calculate the range of valuations firstly and then use this as the basis to determine whether the amount paid for the acquisition / merger is “appropriate” or not.

 

What is intended by “Sectoral activity” (question 1)

 

This section should reflect briefly in your own words how the sector that is the subject of your coursework acquisition / merger has developed or changed in the past number of years – are companies buying each other? What are the key developments in the industry etc.

 

Regulatory Authorities – what is expected?

 

We would like to see that a concise discussion of one or more of the regulatory regimes affecting the acquisition / merger and the consequences of oversight by the regulatory regime are described.

For example, has the European Commission added conditions to be complied with before the acquisition / merger can go ahead? What is the motivation for attaching such conditions etc.

 

Current risk environment – what is expected?

 

Think in terms of your being involved in the acquisition / merger – after the deal takes place, what are the major risks for the enlarged business? Are we certain that sales will increase? If not, why not? Are we definitely going to achieve the synergies that the deal has been based on? If not, why not? And so on…

PART B

REFLECTIVE EXERCISE

 

This part of your coursework accounts for 30% of the marks in your module. It requires you to write a 1000-word reflective essay describing and discussing how you have engaged with the learning materials to achieve the learning outcomes for the module.

 

The discussion is meant as an enjoyable way to illustrate how you have undertaken your learning to realise the learning outcomes for the module. There is not a specific approach to how it should be undertaken but suggestions are provided below.

 

There is not a marking scheme for the discussion but following the suggested points 1 to 5 listed below will ensure coverage of key discussion points.

 

The relative range of marks will depend on the relative strength of the discussion in line with the assessment criteria (marking guide) in the following section.

 

Here are a few questions to reflect on for the topic:

 

• Have you benefited from the discussion of a particular topic such as investment appraisal or M&A or other area? If so, how and why?

 

• What is it about the topic that has made it relevant to you?

 

• Can you explain how you have engaged with the learning around the topic (the online sessions, face-to-face classes, Moodle Books, quizzes and so on)?

 

• How have you probed the topic more deeply to achieve the learning outcomes and develop your confidence as an independent learner?

 

For example, have you explored the context behind some quiz questions? Or a case study in a text? Or a YouTube video?  Have you engaged with classmates to debate the issues raised?

 

• Depending on what you have undertaken, can you describe and discuss how you approached deepening your knowledge? How has your personal exploration of the materials cemented and strengthened your learning and achieving the related learning outcomes?

 

Explain in detail how you have done so citing any relevant sources.

 

Further reading on reflective practice

 

For further reading on reflective practice, you may find the following article helpful – it is written in the context of keeping a journal of your studies, but a journal is not required from you.

 

Pavlovich, K., Collins, E., & Jones, G. (2009). Developing students’ skills in reflective practice: Design and assessment. Journal of Management Education, 33(1), 37-58.

 

The article is accessible at the following link using your university access and a copy of the article is also available on the assessment section of Moodle: https://journals.sagepub.com/doi/abs/10.1177/1052562907307640

 

In the context of writing reflective journals, the article cites Crème (2005, p.290) detailing a good reflective exercise as being (emphasis added):

 

1. a) comprehensive as it meets requirements of an introduction, conclusion and demonstrates syllabus coverage; b) shows understanding of the material, with the ability to select, summarize, analyze and show relationships between concepts, both within the course and outside of it; c) shows self-awareness of the writer as learner, both in relation to the ideas on the course, and to course activities, processes and colleagues; and d) demonstrates that the writer is prepared to take risks with the material in relation to their own political and intellectual position.

 

We recommend trying to keep these qualities in mind when addressing the questions below.

 

Suggested approach

 

To help you to structure your discussion, we suggest organising the reflective exercise into the following parts:

 

1. Choose three areas that you have found particularly enjoyable as part of the studies on the module.

 

Approximate words: 100-200

 

2. Select one of the three areas chosen and explain the value of the learning in respect of that area for you in the wider context of your studies.

 

Approximate words: 200-300

 

3. Describe how you plan to use the learning that you have chosen.

 

For example, is it something that that you can relate to another topic in another module – if so, does it help to strengthen your understanding of a previous topic you may have studied?

 

Is there a way you plan to use it in a study context in the future – is it perhaps a topic you may wish to link to an undergraduate or postgraduate dissertation?

 

Approximate words: 300-400

 

4. Can you relate your chosen learning point to the real-world and work-related issues?

 

For example, if you are thinking of going on a placement or if you have been on a placement or if you are planning on entering the workforce (or perhaps you may already be employed), how can you relate the relevance of the topic you have chosen to a real-life business problem?

 

With such in mind, how do you consider your learning will influence your treatment of work-related issues or what you may wish to change or do differently in future?

 

Approximate words: 300-400

 

5. Please remember to use evidence and appropriate referencing using Harvard APA 7 when supporting your discussion. For guidance in this regard please consult referencing.port.ac.uk.

 

ASSESSMENT CRITERIA – MARKING GUIDE (applicable to parts A and B):

 

As a guide, when marking each section of your report, we look for the following qualities in the analysis, discussion of issues, calculations etc. The stronger each area is, the better the overall result. The percentages referred to in the marking criteria grid are given as a guide.

Marking Criteria Grid	Failure < 40%	40 – 49%	50-59	60– 69%	70-79%	80% plus
Introduction and background to topic      (approximately 10%)	Limited introduction not focused on aims of coursework.	Topic is adequately focused, introduction and context incomplete.	Topic is well focused, the context is defined.	Introduction clearly expressed; context well defined.	As for good pass.	Outstanding work – clear introduction, demonstrating issue in a wider context.
Evidence of reading and/or choice of appropriate concepts (approximately 20%)	Little evidence of reading or limited /inappropriate use of module material; unclear theoretical framework; important work uncited or key concepts ignored.	Evidence of reading or appropriate use of module material but with some gaps.  Literature /concepts adequately but not critically reviewed.	Research extends to primary sources. Some attempt to critically review literature /concepts.	Good critical literature review or well-justified choice of module material. Theoretical framework supports study.	Demonstrates high level of scholarship.	Demonstrates high level of scholarship. Evidence of extensive research.
Understanding of key issues and Analysis (approximately 30%)	Minimal understanding of key issues. Largely descriptive; practically no analysis of central issues.	Adequate work, which attempts to address the topic with limited understanding and analysis.	Attempts to address the topic with some understanding and analysis, key aspects of subject matter covered.	All issues clearly understood, with some differentiation in terms of importance. Relevant and full analysis.	Issues clearly understood and differentiated in terms of importance. Shows originality and confidence in analysing and criticising assumptions, is aware of the limits of knowledge.	Demonstrates understanding of complex subject matter and is able to view it in a wider context. Shows originality and confidence in analysing and criticising assumptions, is aware of the limits of knowledge.
Presentation and evaluation of evidence (approximately 30%)	Some evidence to support arguments but uncritical acceptance of material; poor or incomplete citation; unjustified conclusions.	Weak interpretation of qualitative aspects; some gaps in linkages between evidence and conclusions.	Appropriate evidence, generally assessed critically.	Full, critical assessment of discriminatingly selected material; some evidence of independent thought.	Full, critical assessment of discriminatingly selected material; evidence of independent thought; substantial individual insights evident.	Full, critical assessment of discriminatingly selected material; evidence of independent thought. Likely to add new insights to the topic and approaches the quality of published material.
Presentation: Structure, clarity, use of grammar, correct spelling      (approximately10%)	Poor: lack of structure and clarity; grammatical mistakes; inadequate referencing.	Adequate communication skills; attempts to follow directions regarding the structure, use of language and grammar.	Satisfactory communication skills and structure; appropriate referencing, satisfactory grammar, spelling.	Demonstrates very good communication skills; accurate referencing; very few/no grammatical or spelling errors	Excellent communication skills; accurate referencing; virtually no errors; scholarly, well-organised treatment of material.	Outstanding quality in terms of organisation, structure, use and flow of language, grammar, spelling, format, presentation, accurate referencing.

 

SUGGESTED REPORT LAYOUT FOR PART A

 

This is meant as a guide and may differ slightly for each student.

 

Page 1 – Cover page with report title and student number

Page 2 – Table of contents

Page 3 – Introduction (about three sentences)

Page 4 – Q1 (Sectoral analysis)

Page 5 – Q2 (Due dilligence / integration)

Page 6 – Q3 (Valuation)

Page 7 – Q4 (Regulatory oversight)

Page 8 – Q5 (Risk environment)

Page 9 – Conclusion (about three sentences)

Page 10 – Appendices & references

 

The page references are given only as a general guide.

 

Reports are usually written in the third person but marks will not be deducted for failing to do so.

 

For example:

It is suggested…

It is recommended…

The analysis has found that…

 

But writing that “I recommend” or “we recommend” or “our analysis shows” etc is acceptable.

 

The writing should be very clear, not complicated and to the point.

 

Bullet points should not be used as lists of information. They may be used to develop a point using two or three sentences (similar to a mini-paragraph).

 

The use of headings and sub-headings to break up sections of your report is very important.