You have been appointed to the financial team of a substantial company. You have been asked by the Board to prepare an analytical review of the financial position and reporting of a company, listed on an internationally recognised Stock Exchange and using the most recent published financial statements and other information available, either in the public domain or from within the company.
You may choose the standpoint from which this report is made (competitor, investor, potential acquirer, supplier, customer, landlord or lessee) and should identify this in the introduction to the report. You should NOT choose a private company or, ordinarily, a subsidiary company or division of a larger group. You should also note that, while we do not forbid selection of banks, insurance companies or other financial services businesses, they are almost always subject to different, enhanced, forms of regulation, which may often result in specialised forms of reporting and disclosure, which, in turn, may add additional problems for analysis. For similar industry companies must be taken from Singapore stock exchange to do industry average and focus on one of that company for financial analysis.
The report should address at least the following: (weightings indicated are for guidance only and may not be reflected in the final word-count)
- Critical appraisal of the accounting policies used by the company – are there any features which are unusual, judged against generally accepted practice or “industry specific” usage. This should at least consider “international” usage, but may also address national standards if necessary. Any CHANGE in accounting policies should attract particular attention.
- Analysis of the financial strengths and weaknesses revealed by the financial statements, and using appropriate ratio analysis.
- Review of the market perception of the company in terms of stock price performance and response from the analyst community. A share price movement chart would be regarded as a MUST – and its absence will attract unfavourable comment. However there should also be some attempt to map significant events across to the peaks and troughs on the chart rather than merely reproducing the chart and leaving it at that
The report should include:
A key point or executive summary of conclusions (preferably at the beginning of the report).
Graphical illustration, where appropriate (graphs and tables count a nominal one word for word-count purposes).
A bibliography of sources of information and theoretical material used. (not included in the word count).
Detailed tables, extracts or copies of financial information (which must include the published financial statements) should be relegated to appendices, but may be referred to in the body of the report.
The question belongs to Finance and it discusses about writing a report on a company’s accounting policies, analysis of financial strengths and weaknesses and review of market perception. The company used in this example is Wilmar International.
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