1) Demonstrate an understanding of the purpose of financial statements.

Principles of Business Accounting

Coursework Title: Analysis and interpretation of company’s financial statements

Learning Outcomes Assessed

1) Demonstrate an understanding of the purpose of financial statements.

2) Apply a range of financial accounting ratios to analyse and interpret financial statements and use these to critically evaluate a company’s performance.

3) To critically discuss the limitations of ratio analysis

Assignment questions

You are an investment adviser and you are asked to report to the board of directors of GFuture Plc. GFuture Plc has got extra cash and they are evaluating different investment options (one of them is the company below). They want to know whether the company below is a good investment or not. You have been provided with the most recent published annual report for the following company:

Copy of the Debenhams plc’s annual report can be found on the 2000ACC OctJan 18-19 Moodle page.

Based on the content of the financial statements and other relevant information in the latest company’s annual report, you are required to;

a) Use of range of relevant techniques to critically evaluate and compare the financial performance of the company. Your analysis should;

1. Provide a brief background to the company.

2. Make use of vertical and horizontal analysis, and a range of financial ratios to critically evaluate the company’s (see below):

i. Profitability ii. Liquidity position iii. Efficiency iv. Gearing v. Investment (Whether it is attractive to shareholders) (Include all calculations, workings and formulae used in an appendix to your report)

3. Using all the information at your disposal, critically evaluate the financial performance of the company.

b) Outline any limitations of your analysis.