Commercial Awareness - Melmotte Ltd Case Study - Finance Assignment Help

Assignment Task:

CASE STUDY – Melmotte Ltd 
 
Background Hetta Carbury is the Managing Director of Melmotte Ltd (‘Melmotte’), a small private limited company, who is seeking someone to invest in her business. Melmotte has been trading for more than 10 years manufacturing and selling its own-branded perfumes, lotions and candles to the public in its 15 retail stores and to other larger retail companies. Revenue and profits have been steady over the last 10 years up to the end of 2018. 
 
In July 2015 the company appointed a new sales director, Hamilton Fisker, who with his experience and contacts in the wider retail sector has overseen the launch of an on-line shop for Melmotte’s products and secured a lucrative deal with a hotel chain. 
 
Hetta now believes that the business has further opportunities and does not wish to lose the momentum created by Hamilton. 
 
The bank that currently provides both the long-term loan and an overdraft facility has rejected Melmotte’s request for additional funds on the basis that there are insufficient assets to offer for security (the existing funding is secured on Melmotte's property, plant and equipment). Hetta has therefore approached a business contact, Tony Trollope, about potentially investing in Melmotte. 
 
Grosvenor Investments (known as ‘Grosvenor’) Tony Trollope owned a highly successful technology business which he sold five years ago for £20 million. With the proceeds, he then set up an investment company (Grosvenor) that invests primarily in smaller private businesses in need of short- to medium-term funding. Tony sits on the board as a non-executive director of a number of the companies in which his business has invested, and is often able to offer valuable business advice to these companies, especially in the area of research and development activities. 
 
Your role You are Ruby Ruggles.  As a member of Grosvenor’s investment management team, you have been asked to analyse the financial performance and position of Melmotte and produce a report for Tony which sets out your findings and makes a recommendation as to whether this request for investment should be approved or rejected.  This will be your coursework assignment for Understanding Financial Statements. 
 
You have also been asked to produce a separate, independent report for Hetta Carbury covering a number of issues facing the business.  This will be your coursework assignment for Commercial Awareness. 
 
To assist you with this task you have been provided with a pack of information as follows: 
 
Exhibit 1:  Extracts from Melmotte’s Financial Statements for 2018, including the Statement of Profit or Loss, Statement of Financial Position and Statement of Cash Flows. 
 
Exhibit 2:  Additional financial information which supports the Financial  Statements in Exhibit 1. 

Exhibit 3:  Key ratio analysis for 2018 and 2017 of Melmotte’s financial statements. 

Exhibit 4:  Your notes from various discussions held with employees and directors of Melmotte. 

Exhibit 5:  A briefing note from Tony Trollope (Grosvenor) setting out how they will invest in Melmotte if they decide to proceed.

Questions:

Question 1 – the Business structure and corporate governance

a) Melmotte is currently a Limited Liability (Ltd) company.  Explain what is meant by ‘Limited Liability’ in this context, and how this differs from a sole trader company.

Grosvenor will be hoping that the company will be able to become a Public Limited Company (PLC) in a few years’ time.  Explain the main difference between a Ltd company and a PLC.
 
Grosvenor has stated that it would like Melmotte to have an audit each year, despite not being required to do so by law.   

b) Explain the purpose of an audit and why an investor like Grosvenor would like the company to have one.
 
Consider the comments made by Hetta Carbury in Exhibit 4 in regard to Grosvenor’s expectations of Melmotte’s corporate governance arrangements. 
 
c) Identify and explain ONE benefit and ONE drawback of Hetta taking on the joint role of Chief Executive and Chairman of Melmotte (assuming the company becomes a PLC in the future).

d) Explain what a ‘non-executive director’ is.

e) Describe TWO benefits of having non-executive directors on Melmotte’s Board of Directors.

f) In considering the remuneration package for the Sales Director of Melmotte: 
• State the name of the corporate governance committee Melmotte should put in place to decide the package, and who should sit on it. 
• What kind of remuneration, other than a higher salary, could the company offer that might persuade Hamilton Fisker to remain with the company for the next few years? 

Question 2 – Management

If Hetta Carbury is persuaded that she should not be both Chairman and Chief Executive, she may decide to appoint someone new as the Chief Executive (CEO). 
 
a) In your view, what is the difference between ‘leadership’ and ‘management’?   

b) A CEO’s role involves a combination of decision-making, planning and organisation, and leadership.  Discuss what these three roles involve, using the information in the case study to give examples of each in the context of Melmotte.

c) Given the current exciting developments and the potential expansion of the company in terms of new products and new markets, discuss THREE areas of skills, attributes and/or experience that a good candidate would be expected to demonstrate in order to be offered the position of CEO, explaining why these would be useful for Melmotte.
  
Question 3 – Overseas expansion

One of the main reasons that Melmotte is seeking additional investment is that it would like to expand overseas in the next few years.   

a) Identify ONE GLOBAL institution that has been established to help companies to trade with companies and consumers in other countries, and briefly explain what it does.  (This should not be a commercial business, or an institution linked solely to one country or one region).

b) Identify and discuss THREE cultural issues that Melmotte may have to take into consideration when trading overseas or setting up an overseas operation in ONE foreign country of your choice (any country other than the United Kingdom).

c) Discuss ways in which Melmotte might best deal with the issues identified in part (b) to ensure that the company can be successful in the country you selected to discuss.

d) As part of PESTLE analysis, identify and discuss THREE political and/or social factors in this country that may have an influence on Melmotte’s plans.
 
Question 4 – Marketing
 
Hetta is very excited about the launch of the company’s new perfume “Juliet”.  She would like some recommendations as to how best to market the product, in order to secure the maximum sales. 

a) In terms of marketing, explain what is meant by the “Four P’s”, giving an example of each. 
 
b) Recommend THREE different ways in which Melmotte could choose to market the new perfume, explaining at least ONE benefit and ONE drawback of each method. 
 
Question 5 – Professional Format

You should present your answer in the form of a professional report.  This means that you should include
  
a) An executive summary that briefly presents the findings of the report at the beginning of your report. 

b) Professional layout:
• A title page 
• Addressed to Hetta  
• A table of contents 
• Clear headings for each section  
• Proper referencing, using the Harvard convention, if you have used the work of another person. 

c) Your answer should be clear and coherent  
 

This Finance Assignment has been solved by our Finance Experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our experts are well trained to follow all marking rubrics & referencing style.

Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.