Your question is in 3 parts, as follows:
Choose a listed company on the London Stock Exchange (LSE) in the following sectors: Oil & Gas Companies.
Obtain the annual reports of the company and one of its main competitors for the latest three years from its website or other sources.
a) Using financial ratios, critically compare and analyze their financial performance over the last three years.
b) If you were going to buy one of these companies’ shares, which one would you choose? Explain your reasons.
You can use these websites unilever.com < - > yahoo finance
FM assignment must be in this order: (I already gave you an assignment that has been finished from one of my classmate that you can use as a handbook)
-Overall Structure
-Title page
-Table of Contents
-Assessment 1
-Section 1.1 Background of both companies
-Section 1.2 Three-year financial performance analysis using ratios
-Section 1.3 Recommendation on which company to invest in
-References (Harvard references system)
-Appendix (ratio calculations used in section 1.2)
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-Points to consider
-Remember to organize your assignment and do sub-sections and number your various sections
-Try to make your document as user/reader-friendly as possible by using diagrams, tables, figures, charts, etc. Use your creativity as much as possible.
-You will have to do analysis based on the last THREE years financial statements (2021 to 2019) It might be early to use 2022 as not all companies will have released their numbers (but both must be same years)
-You need to take the perspective of a potential INVESTOR
-You need to recommend at the end of your analysis which company would you buy shares from
-Do not include financial statements in the annex
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2000 words +/- 10%
Section 1.1 Background of 2 Companies (200 words 15% of total mark)
-Use the material on annual report or website (about us) to describe main characteristics of company ( do this for each company in separate paragraphs)
-Section 1.2 Analysis of the Financial ratios of the 2 firms over 3 years (1600 words 60% of total mark)
You need to organize this in various sub-sections:
For ratios you need to review separately:
Profitability (any 3 ratios); liquidity (2 ratios); capital structure or gearing ratios (2 ratios); efficiency (3 ratios) and investor return performance (4 ratios)
Remember ratio workings in appendix only use results in main body
Ratios should be reported on a per family basis + organized in a table
Interpret them on a per family basis not individually. For each family tell me which company is better You must tell me why trends change or prevail (why has it happened)
At the end of this section you must tell me which company is better and why
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Section 1.2 Analysis of Financial Ratios (cont.)
The following slides of session 3 are to be used to help you choose and work out the ratios (you can also use the FM manual)
Profitability Slides 59 to 74 of session 3
Liquidity Slides 20 to 35 of session 3
Capital structure or gearing ratios Slides 36 to 58 of session 3 Efficiency Slides 75 to 82 of session 3
Investor/shareholder returns Slides 83 to 101 of session 3
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Section 1.3 Recommendation on which company to invest in (200 words 15% of total mark)
-This has to be linked to section 1.2
-You need to tell me which company to select and why
-Remember to tell me which families of ratios are more important in the context of investor decisions
-Your recommendation has to be consistent to your analysis of section 1.2 (financial ratios)
-10% of mark for presentation
-Presentation and table of contents, use of tables (1 table per family of ratio), numbering of sections/sub-sections and detailed financial ratio workings in appendix.
