You are required to write a research report discussing the historic financial performance as well future financial risks of the allocated listed company after performing detailed financial analyses
INTERNATIONAL TRADE FINANCE
Company: Brick Brewery – BRB.TO
Instructions: You are required to write a research report discussing the historic financial performance as well future financial risks of the allocated listed company after performing detailed financial analyses (in Excel). Your report should be typed in MSWord and consist of the following sections after you have completed your analysis and research. You are required to use APA style in referencing research articles or websites.
- Background of the company and the industry they operate in (including economy & competitors) as well as current business environment.
- Clear statement of purpose and content of report (e.g. the aim of this report is to conduct a financial analysis of _________ (based on its latest financial statement dated ______) in order to determine the business, operational, financial and market risks affecting the company. Based on this analysis the report concludes with a discussion of various growth strategies of the company and the impact on its finances.
- Initial Financial analysis based on the historic performance of the company
- Comment on the profitability, efficiency, liquidity, leverage and market perspectives of the business (refer to your appendix A and B) by comparing at least 4 years of performances) by identifying any significant trends.
- Discuss and compare the results of your ratio analysis with other analysis or discussions of the company found on financial websites (use appropriate referencing techniques)
- 3. Risks to future earnings
- Conduct a business risk analysis (future sales trend & discussion of other risk factors) based on the last 2 years’ financial information available.
- Conduct an operational risk analysis (perform a break-even analysis for the company to compute its breakeven point and operating leverage) for the last 2 years.
- Conduct a finance risk analysis (capital structure and comment on their future ability to pay financing cost and earn profit for investors) for the last 2 years.
- Conduct a working capital risk analysis (including efficiency of managing the operations) for the last 2 years.
- Comment and discuss the overall risk to future earnings for this company based on your analysis.
- 4. Risks according to market place
Conduct a risk analysis as perceived by the market place by analysing and referring to the:
- Market perceived risks (P/E ratio and other ratios)
- Historic performance of share prices (volatility)
- Identify and discuss the current dividend policy followed by management of the company
- Calculate a fair value of the company’s shares based on your analysis.
- 5. Future financing needs analysis based on growth strategies
Conduct a future financing needs analysis to identify the viability and potential sources of finances available to the company for the following strategies:
- a. Organic growth of 10% for the company (not requiring additional investments in long-term assets); and
- b. Aggressive growth strategy of 30% for the company (based on investing in additional long-term assets to create the required capacity).
- 6. Conclusion
Comment/discuss the most significant future financial risks and strategies available to the company based on your analysis from various viewpoints (investors, traders, financiers, suppliers, etc.)
- 7. Appendixes – containing details of your calculations.
- Income statement & balance sheet (your Excel format)
- Results of ratio analysis
- Working papers on business risk and operational risk analysis
- Working papers on financial risk analysis
- Working papers on working capital analysis
- Working paper on future financing needs analysis for both strategies
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