The CEO of Next plc, a UK retail company is considering investing in a UK company in order to diversify Next investments. The options he has asked you to investigate are buying shares in J D Wehttherspoon, listed under the General Retailers section on the London Stock Exchange, or in Scottish & Southern Electricity plc and energy company. In your role as the Financial Director, he has asked for your help in critically evaluating which or these options would be a good investment for Next plc. Requirement: Write a report giving your recommendation based on: Part A) Critically evaluate the Financial Management policies and practices of both options over the last five years. (4,000 words) Part B) You should attempt to evaluate whether or not the current share price of both options represents a 'fair' value. (1,000 words) Helpful Hints: Whilst students are encouraged to be inquisitive and innovative in their approach as to what should be included in this report the following may be of some use in providing guidance as to what could possibly be included, although this is in no way meant to be prescriptive. The aim of the assignment is to help you understand how key areas of finance theory are demonstrated in practice by a quoted company. This might include investigating topics from throughout the course; agency theory, market efficiency, investment appraisal, sources of finance, capital structure, dividend policy, risk, and so on. It is likely that different students will concentrate on different aspects of the course as they prepare the report. You may have to spend a significant amount of time on the initial analysis of the information available to you e.g. Financial Statements. A review of the Financial Statements of Wetherspoons/SSE plc over the last five years should help you to identify key areas that should be explored in greater deal e.g. capital structure, dividend policy and so on. This will then allow you to gather information to build a theoretical framework which can then be applied to the company. With 4,000 words split over two sections you do not have a lot of room for long introductions to the companies and so on. Consequently you can assume you are writing to a sophisticated audience who has a good knowledge of accounting practices, finance theory and the operation of the stock market. Whilst the skills you should have previously learned such as analysing financial statements will be of use, this piece of work should NOT have such analysis as the main thrust of the work, but should only be used (if at all) to provide evidence to support your findings from your other analysis of your chosen company. Finally I would encourage you to make good use of graphs and tables to present key information and don't forget to reference everything!