Ercan Balaban Senior Lecturer in Accounting and Finance

Assignment Task

Section

1. Your given company to analyze is FirstGroup Plc whose shares are traded on the London Stock Exchange (LSE).

You should first familiarize yourselves with the major characteristics of the company. Probably the best way of doing this is to visit the company website and download key documents such as financial statements, annual reports, audit reports, corporate governance reports, corporate social responsibility reports, and investor relationships materials. Keep in mind that you need data, and market and non-market information for the last three years. You are required to compare (and contrast) FirstGroup Plc with one of its key competitors in Section (iii), which carries a significant weight of 30%. Therefore, you need to and should determine a key competitor to collect similar data and information at the very beginning; and most recommendably as the first thing. You should cleverly choose preferably a stock-market listed company (and preferably from the LSE), for which you can easily find detailed and reliable data, information and analysis from publicly available reliable sources in addition to company websites. You can and should read Company Analysis Reports prepared by prestigious investment banks and their research departments to understand how investment analysts formulate their approach in financial analysis and investment recommendations. You may and should refer to your chosen company’s industry specifics and name a few additional major competitors in its sector. Opportunities and challenges encountered by the industry and companies may and should refer to the impact of the recent global COVID-19 pandemic.

2. Evaluate the financial statements and other relevant market information relating to the given company to assess how the company has performed over the past three years taking into account any problems or opportunities identified in Section (i). This should be an interpretation of the financial ratios but NOT the calculation of these ratios.

You should clearly cite your references from where you gather the associated financial ratios. More importantly, you should be able explain why you consider to analyze and interpret specific financial ratios in your case. Normally, financial ratios should be compared through time and across peer group of companies, or industry-wide.

3. This section basically requires a comparative analysis using combined data and outcome in Sections (i) and (ii). You may prefer to refer to the industry specific issues as well.

4. This section should conclude based on the analysis in the previous sections that whether the Board of Directors should support a new joint venture to be undertaken by FirstGroup Plc. Normally, joint ventures are a significant type of corporate restructuring in terms of both organizational and financial restructuring. Under normal circumstances, joint ventures require corporate strategic decision-making and are subject to the approval by the company shareholders. Therefore, it is reasonably expected that the Board of Directors would bring their proposal before the shareholders. Give their strategic characteristics; joint ventures have significant impact on a wide and diverse group of companies’ stakeholders.

Identify major stakeholders in a stock-market listed company in terms of

• Internal stakeholders (Board of Directors, Executives, Managers and Employees)
• External stakeholders (Existing and Potential Shareholders, Customers, Regulators and Public Authorities, and general Society)

Note that some stakeholders can be both internal and external; such as Executives can be Shareholders at the same time. Your perspective should focus on Shareholders as joint ventures may relate to wide-spectrum corporate restructuring, and require internal and/or external financing. As such, there should be some consideration of enterprise wide risk management. Under normal circumstances, there is no single, correct or wrong answer in this section. You should be able to support your arguments based on the quantitative and qualitative analysis undertaken in the previous three sections.

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