BMAN31610 Corporate Financial Communication and Valuation

The main aim of this project is to study the annual report and financial reporting practices of a UK listed company for a period of at least five years and six annual reports to provide an indication on their usefulness to shareholders and other stakeholders and in relation to financial accounting and stock market performance.

You will need to consider all aspects of the annual report including the financial tatements and the narrative content. The lectures on Earnings Manipulation in Semester 1, and Financial Communication in Semester 2, will provide an introduction to the theoretical frameworks that researchers use to understand the accounting and disclosure choices of firms. In addition, you should think about the kind of information that your firm would need to disclose to explain its business strategy and business model to investors see Semester 1 lectures on Business Strategy). The technical training you have had hroughout your degree can be used to bring the relevant and appropriate tools for the nalysis to the project.

Employability This module builds on the skills you developed in Semester One particularly: working with messy data; exercising judgement about the key value drivers for the firm; better knowledge of how capital markets and financial reporting and communication work in practice; and business report writing skills.BMAN31610-PCS 2023 Page 2 of 6 Social Responsibility While the main perspective in the personal case study is that of all stakeholders, a firm's social responsibility activities will nonetheless be considered (in the Personal Case Study) to the extent that it affects a firm's operating, financial and investment activities and hence valuation. Main Tasks (NB: this is not intended as a complete report structure though tasks 2 to 9 below could be such in the results and analysis section of your report):

1. Download the annual reports of your case company that were published during 2022, and five prior years annual reports, ie six years annual reports in total. In the event that the 2022 report is not available by February 2023, then use the 2021 one (and five years prior). For example, if a company has a year-end of December 2022 it is unlikely that the annual report and accounts will have been published by the time you need it.

2. Using Capital IQ pricing data (you can get this from the Bloomburg suite in the AMBS library or access directly) summarise and discuss the stock market performance of your company over the period starting from eighteen months prior to the financial year end of your first annual report and ending at least two months after the financial year end of the last annual report in your sample. Relevant comparisons with nearest competitor and index are mandatory to isolate industry and market shocks.

3. Compare the reported financial performance of the firm against its stock market performance over the relevant period. Relevant comparisons with nearest competitor and index are mandatory to isolate industry and market shocks. Ratios covering Growth/Structure, Profitability, Efficiency, Gearing, Liquidity and Ownership should be analysed in detail.

4. Summarise the main features of each of the six annual reports. Identify any major changes in the section headings, length, and content of the latest annual report compared with your earliest annual report. Where you find major changes, try to work out in what year these changes first occurred - a stacked bar graph would be a good way to show how the structure changes over the research period.

5. Describe and discuss the information provided in the latest annual report that helps you understand the   business model and business strategy. Outline anyBMAN31610 - PCS 2023 Page 3 of 6 other information that could be useful for understanding the firms business model and strategy.

6. Focusing on the front-end narrative content of the six annual reports, to what extent do these narratives provide forward looking statements or words that might be useful for predicting future financial performance? Discuss whether the use of forward-looking statements or words changed over time. Relate your findings to the firm stock market performance. Use the Hussainey paper as a reference guide. If you are computer literate, you can use concordance software such as AntConc1 to analyse the AR & A files, but this is not necessary for good marks.

7. Focusing also on the narrative content of the six annual reports, to what extent do these narratives contain statements that may be indicative of impression management by the firm? Relate your findings to the firm stock market performance. For this part focus on the Highlights section, Chairman Statement, and performance review sections (eg operating and financial review, financial review, CEO review, CEO statements etc.).

8. Briefly discuss the information about the firm approach to Corporate Social Responsibility (CSR) and Environment Social Governance (ESG) disclosed in the latest annual report in your sample.

9. Focusing on the six sets of financial statements, the notes to the financial statements, the auditors report, and the accounting policies, consider whether there is any evidence of the use of accounting discretion/accounting choice that might potentially have misled investors. Discuss whether there are there any red flags. Relate your findings to the firm stock market and reported performance.

10. Write up your findings in the form of a business report including an Executive Summary, brief Introduction, brief description of the business and your Methodology, including your choice of competitor (and why this firm).

11. It is very important that you revisit the report writing lecture as the structure, content and professionalism of a business report is quite different to that of an academic report.

12. The main body of your report should consist of a maximum of 15 (A4) pages (singled sided) of DOUBLE SPACED (ToC & Tables can be single line spaced) 12pt Font 1 Available to download from : https://www.laurenceanthony.net/software/antconc/ There is lots of YouTube videos to help you run this.BMAN31610 - PCS 2023 Page 4 of 6 text with NORMAL margins. In addition, your report should contain a maximum of 12 pages (singled sided) of figures, graphs, and thoughtfully chosen extracts from the annual reports of your case company. You should also include a reference list at the end of your report citing relevant papers and any other literature you have used. Thus, in total your main report should be about 27 pages long plus the title page, table of contents and list of references, so a maximum of around 31-32 pages (singled sided) in total. Penalties, as specified in your course handbook/instructions, will be applied if either part of your report exceeds the page limits specified above