Annual Reports Of Britvic Plc - Calculate Britvic Plc’s Key Financial Ratios - Report Writing - Accounting & Finance Assignment Help

Assignment Task

Question one of the individual assignment is to perform a detailed financial analysis of a listed company using key financial ratios and analysis of company financial statements. Critical evaluation of the financial health of the ompany, including the company’s approach to working capital management, should be submitted.
Question two of the individual assignment is to prepare a report to the investment board of Britvic Plc that recommends the appropriate funding choice for an investment project that will be evaluated based on the information provided below for question two. Important: The two components of this assessment are independent of each other.

Question 1 
Using the following link, https://www.britvic.com/media-centre/reports, download the annual reports of Britvic Plc from 2017 to 2019 and provide a critical analysis of the financial health of the company. The annual reports are in a consolidated format, and relevant financial statements can be found under the financial statements section. Do not forget to review the notes to the financial statements.

Required:
a) Write a brief introduction of the company and the current mid-term (5 years) outlook. Maximum of 300 words. Be sure to include an analysis of the company’s share price to the Bpresent.

b) Calculate Britvic Plc’s key financial ratios (for at least the 3 most recent years) and present them in the report in table or chart format. Key ratios must cover all categories: profitability, liquidity, efficiency, investment, and gearing (leverage) ratios.

c) Interpret and assess the trend of the financial performance of Britvic Plc in the most recent year (the newest annual report) in comparison to the previous years as well as its competitor/industry. Make sure you justify any significant differences (trends) you observe here.

d) Critically assess the company’s approach to working capital management. 
Notes: The accompanying analysis should be detailed and provide reasons for any changes. Use both internal and external (financial and non-financial) information to support your analysis. Simply stating that a certain ratio has changed and by how much is not sufficient for analysis at this level. All equations and findings must be included in the report.

Question 2 

Britvic Plc is currently evaluating a new project to produce canned coffee drinks. The project will require an initial outlay of £45m on production machinery and other costs. The project is expected to have a three-year life span, and the projected cash flows associated with the project are displayed in the below table:

Required:

The company believes this will be a successful project and will help to distinguish them from their competitors. However, they would like you to evaluate the project using different methods and present a proposal to the investment committee in order for them to approve it.

a) Britvic Plc is considering financing the project with 40% debt. Using Adjusted Present Value (APV), value the project. (Assume the same level of debt is held until the end of the project. Do not consider the repayment of the debt principal in any of the valuations.)

Hint: calculate the free cash flow of the project and use CAPM to compute the discount rate.

b) How would your evaluation change if the machinery manufacturer offered to sell you the production machine with a three-year £35m 8% loan (subject to 1% issue costs)? Assume the remainder of the initial outlay is equity. Discuss the benefits and disadvantages of the APV method.

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