MODULE TITLE: Financial Analysis and Management 1. Your question is in 3 parts, as follows: 1. You work as a financial analyst for the CFO of Carrefour SA, a French multinational retailing group, which is one of the largest retailers in the world. Carrefour are considering the possible acquisition of a large UK or European-based wholesale "cash and carry"/retailing group. The initial research has identified two potential acquisition targets. One is Metro AG a very large wholesale/retail group based in Düsseldorf, Germany which is listed on the Xetra stock exchange in Frankfurt. The other is Booker Group PLC, the UK's largest food wholesaler and which is listed on the London stock exchange. The CFO has asked you to write a brief internal management memo that summarises the current businesses of each of these two companies, together with a short assessment of the impact of recent economic conditions on them. 2. Undertake the necessary research and write a report to your CFO which critically evaluates and compares the financial performance and risk exposures of these two companies, together with a reasoned argument as to your advice as to which company – if either - might be the preferred acquisition target. NOTE: Your analysis should be based on the 2013/14 financial statements of Metro and 2014 financial statements of Booker. 3. Your CFO has got an additional concern. She has been asked to give a presentation to the European Food Distributors Association conference on the topic of: "Capital Investment Decision Making". Write a short report for your CFO, which outlines the main investment appraisal techniques and critically evaluates their individual strengths and weaknesses. Included a reasoned recommendation as which approach might be best for a company such as Carrefour to use to evaluate investments in new distribution warehouses and "cash and carry" stores. As a starting point, you might consult like to consult the following web links: http://www.bookergroup.com/~/media/Files/B/Booker-Group/pdf/annual_report_2012.pdf http://www.metrogroup.de/en/investor-relations/events/2013/03/20/annual-report-2012 As a starting point, you might consult like to consult the following web links: http://www.bookergroup.com/~/media/Files/B/Booker-Group/pdf/annual_report_2012.pdf http://www.metrogroup.de/en/investor-relations/events/2013/03/20/annual-report-2012 2. Presentation • A management report should be clearly and logically structured in whatever format appears to be most suitable for supporting the analysis, arguments, conclusions and recommendations. Place ratio calculations in an appendix and only present the actual ratios (and not the ratio calculations) in the body of the report. • An internal management memo may be written in a "bullet point" format, if required. • Tables, graphs and charts are a convenient way of organising your findings and helping you to analyse data and to explain concepts and ideas. 3. Assessment Requirements: • The submission of your work assessment should be organised and clearly structured. • Maximum word length allowed for the whole assignment is 4000 words, excluding words in Charts & Tables and the ratio calculations in the Appendix section of your report. This word count should be split approximately, as follows: Question 1 - 1000 words, Question 2 - 2000 words and Question 3 - 1000 words. (Further guidance is given in the marking scheme, below.) • Student is required to submit a type-written document in Microsoft Word format with Times New Roman font type, size 12 and line spacing 1.5. • This assignment is worth 100% of the final assessment of the module. • Indicate any sources of information and literature review by including all the necessary citations and references adopting the Harvard Referencing • Students who have been found to have committed acts of Plagiarism are automatically considered to have failed the entire module. If found to have breached the regulation for the second time, you will be asked to leave the course. • Plagiarism involves taking someone else's words and using them as your own. This entire assignment must be written in your own words. Short quotations – up to twenty words long – are allowed as long as they are properly acknowledged and referenced. 4. Marking Scheme: Word Limit Marks (%) Brief summary of the two companies' current businesses. 500 10 A brief report on the impact of recent economic conditions on the two companies. 500 10 The comparative evaluation of the financial performance of the two companies, together with advice – with reasons - to the CFO, as to which might make the most suitable acquisition. 2000 60 An analysis and critical evaluation of the main investment appraisal techniques. 1000 20 Total 4000 100% 6. Learning Outcomes tested in this assignment Upon successful completion of this module the student will be able to: 1. Demonstrate a critical awareness, comprehension and synthesis of a business, together with assessment concerning the impact of economic conditions. 2. Identify, organise, analyse and critically evaluate financial information, articulate conclusions and form recommendations, based on a disciplined, thoughtful and well-structured appraisal of the evidence and founded on clear theoretical underpinnings. 3. Structure and communicate ideas based on an understanding and appreciation of the practical application of key issues and theories in corporate financial management. 4. Display an ability to evaluate complex business issues, synthesise concepts and to formulate and propose advice based on informed judgement. 5. Articulate conclusions and make recommendations, in an independent manner, which are based on informed analysis and critical appraisal. 7. Notes on Plagiarism Plagiarism is passing off the work of others, as your own. This constitutes academic theft and is a serious matter which is penalized in assignment marking. Plagiarism is the submission of an item of assessment containing elements of work produced by another person(s) in such a way that it could be assumed to be the student's own work. Examples of plagiarism are: • The verbatim copying of another person's work without acknowledgement • The close paraphrasing of another person's work by simply changing a few words or altering the order of presentation without acknowledgement • The unacknowledged quotation of phrases from another person's work and/or the presentation of another person's idea(s) as one's own. Copying or close paraphrasing with occasional acknowledgement of the source may also be deemed to be plagiarism is the absence of quotation marks implies that the phraseology is the student's own. Plagiarised work may belong to another student or be from a published source such as a book, report, journal or material available on the internet. 8. Harvard Referencing The structure of a citation under the Harvard referencing system is the author's surname, year of publication, and page number or range, in parentheses, as follows: • The page number or page range is omitted if the entire work is cited. The author's surname is omitted if it appears in the text. Thus we may say: "Jones (2001) revolutionized the field of trauma surgery." • Two or three authors are cited using "and" or "&": (Deane, Smith, and Jones, 1991) or (Deane, Smith & Jones, 1991). More than three authors are cited using et al. (Deane et al. 1992). • An unknown date is cited as no date (Deane n.d.). A reference to a reprint is cited with the original publication date in square brackets (Marx [1867] 1967, p. 90). • If an author published two books in 2005, the year of the first (in the alphabetic order of the references) is cited and referenced as 2005a, the second as 2005b. • A citation is placed wherever appropriate in or after the sentence. If it is at the end of a sentence, it is placed before the period, but a citation for an entire block quote immediately follows the period at the end of the block since the citation is not an actual part of the quotation itself. • Complete citations are provided in alphabetical order in a section following the text, usually designated as "Works cited" or "References". The difference between a "works cited" or "references" list and a bibliography is that a bibliography may include works not directly cited in the text. • All citations are in the same font as the main text. Examples of book references are: • Smith, J. (2005a). Dutch Citing Practices. The Hague: Holland Research Foundation. • Smith, J. (2005b). Harvard Referencing. London: Jolly Good Publishing. In giving the city of publication, an internationally well-known city (such as London, The Hague, or New York) is referenced as the city alone. If the city is not internationally well known, the country (or state and country if in the U.S.) are given. Examples of journal references are: • Smith, John Maynard. "The origin of altruism," Nature 393, 1998, pp. 639-40. • Bowcott, Owen. "Street Protest", The Guardian, October 18, 2005, accessed February 7, 2006.