ACFI810

Financial Statement Analysis and Valuation

Coursework Assignment 2024

You are working for MO Investments plc, a private equity company, as a financial
analyst. John Menzies, the recently appointed CEO of MO Investments plc, was reading an
article on the marketwatch.com website and sent you the following e-mail.

E-mail

To: Financial Analyst

From: John Menzies
Date: 30th January 2023
Subject: Best and worst performing US stocks

Hi,

I was reading an article about the best and worst-performing US stocks in 2023
(https://www.tastylive.com/news-insights/Best-and-Worst-Performing-SP-500-Sectors-in-
2023). You can view the list in the attachment to the e-mail.

In your role as a financial analyst, I’d like you to select one of the companies identified in the
articles and fully analyse the performance of the business in order to help explain its change
in share price. I’m interested to see if there is a potential opportunity to earn some good
returns in the future by either buying shares in any of the companies at a low price, or by
short selling the shares at a high price.

You will need to identify the most recent financial statements and any information released
since the release of these financial statements to support your analysis. I’ve been using the
MarketLine (https://liverpool.idm.oclc.org/login?url=http://advantage.marketline.com/)
platform recently to retrieve financial information and have found it to be a very useful tool,
and I’d request that you use this to help you with the analysis, alongside other useful
websites, press releases and industry information.
I’d just like to emphasise that I would like you to analyse the performance of the chosen
business, so you should focus your attention on the income statement, however other areas
of the annual report may be useful too. I will leave this for you to decide which areas these
may be.

Best wishes.

John
CEO MO Investments plc

Attachment – Best and worst performing US stocks 2023

Best performing stocks

1. Nvidia (NVDA), 138%

2. Meta Platforms (META), 122%
3. Palo Alto Networks (PANW), 109%
4. Royal Caribbean Group (RCL), 88%
5. Advanced Micro Devices (AMD), 83%

Worst performing stocks

1. Moderna (MRNA), -61%

2. Enphase Energy (ENPH) - (54%)
3. Dollar General (DG) - (48%)
4. Pfizer (PFE) - (42%)
5. Walgreens Boots Alliance (WBA) - (36%)

1. Instructions

This coursework requires single submission of your report via Turnitin, which is a plagiarism
and collusion detection system. If you do not submit to Turnitin your work will not be
marked.

To submit via Turnitin, you go to the assessment area for the module on CANVAS and you will
find a link for the coursework. Click on View/Complete and then on the “submit” icon for the
paper. You are then prompted to submit a title for the paper. Use the “browse” button to
locate the file you want to submit, then click “submit”. You will then be asked to confirm that
you want to submit by clicking the “Yes, submit” button.

You are only allowed to submit the report once, so please ensure that you submit the correct
one. Only your report should be submitted, do not submit the relevant annual report.
The submission deadline is Friday 22nd arch 2023, at 12 noon. Standard penalties apply for
late submission.

The maximum length of the report is 1,500 words. Front page, contents page and references
do not count within the word limit. The standard management school penalties are applied
for exceeding this word count. There is no acceptable margin above this limit.

This overall assignment will contribute 20% of the available marks on this module.

The university's rules and penalties with respect to plagiarism apply to all assessed work. The
work must be entirely your own. Referencing of sources of information used must be made
in a bibliography, including detailed website addresses.

2. Guidance Notes

Obtain a copy of the latest available published annual report, via ORBIS or Bloomberg, and
relevant ratios, again via ORBIS or Bloomberg, of one of the companies identified by the CEO
in the attachment to the e-mail.

Your answer should be based on the information available in the company's annual report,
and any other relevant financial information (e.g. in the company’s website, share prices,
FT.com (and other media commentaries) or the relevant stock exchange website).

Careful selection of a suitable company plays an important part of this assignment.

Information on companies can be obtained from lots of places, including;
• the company’s website
• the relevant stock exchange website
• the international stock exchange official yearbook (the library has a copy)
• FT.com

In assessing the performance of the company, the use of ratios will be very useful but the key
to scoring well in the assessment is to give a full explanation of why the ratio has moved.

Explaining what has occurred (e.g. gross profit margins have increased by 10%) is not enough.
You should try to attempt to explain how changes have occurred, why changes happened,
and when during the year. Also ask the so-what question – i.e. can we consider future
outcomes and state possible consequences arising from any changes.

Try to understand the business strategy (e.g. read the business review, financial review or
chief executive summary) not just crunch numbers.
Be imaginative and do not just use ratios taken from ORBIS/Bloomberg. Think what is relevant
to your chosen company. For example, for a retail business the revenue per square metre of
floor space could be important as more sales may have only been generated by buying new
stores. For an airline it might be seat utilisation. Industry data will also be relevant.

Use tables, graphs and diagrams, where appropriate, to improve presentation marks. Please
ensure that all tables, graphs and diagrams are fully numbered and labelled.

3. Marking Criteria

The table below illustrates the criteria that will be used when marking your assessment and
the percentage weighting given to each element:
Criteria Marks
available
Report format and presentation 10
• Appropriate use of headings and sub-
heading
• Professional, business report
appearance and language
• Correct referencing
• Correct grammar and spelling

Executive summary 15
• Clear and concise summary
• Provides key findings/highlights

Financial analysis 60
• Explanation of why balance and/or ratio
has moved
• Calculation of appropriate ratios
• Benchmarking against competitor or
industry averages
• Analysis of trends over an appropriate
period

Conclusions and advice 15

• Justification of the rise or fall in price
• Potential investment opportunity?

Total 100
A discussion board has been created on CANVAS where you can post any questions that you
may have regarding this assignment.

Good luck and enjoy the assignment.