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@captmario
Consider this step approach for your analysis n evaluation
1. You do your trend (or 3 yr analysis) …
a. ) stating what your ratio analysis says and whether or not the trend is good or bad following the 3 yr trend ratio analysis
B. ) explaining possible reasons for the results obviously backing it up with findings from the business environment as revealed by your PEST, five forces analysis or press release etc. No conjuring here!…this is where the quality of the our evaluation lies.
2. Then come your comparator analysis. To me, it wont be effective if you open a fresh sub section and name it “comparator analysis”. Immediately after you conclude your statement for 1b above, you quickly compare the comparator co ratio results vis a vis that of the focus co (eg for GPM) and AGAIN state whether the focus co performance is good or not.
You should take the above steps for your eg GPM, opm, npm, gearing ratios etcMy reply would be more effective if you give me specs.
On the overall, you should know that you are evaluating the performance of A COMPANY and not a company in conjuction to another. In this case you will be using the fs of the holding co not that of the subsidiary whose fs is not published.
BTW you have barely 6 weeks togo and you have to move on…although this stage is the one of the most critical phase of the RAP@avian
Yes…researching on a popular company raises a flag. But he sure not to re-do what others have previously done on that company.
Go in deeper in your research n ‘diversify’ your research…do something different. in this way you reduce the risk of copying what others have done on that company.
Of course keep to referencing.@hassanhere
It is safer and advice you use full year FS as against quarterly results.
It is also advice you use audited FS…which are more reliable.
Quarterly results are subject to manipulations so don’t bother using them especially if they are for the focus company.
You may..on last resort use them for comparator company@captmario
Don’t get engrossed with irrelevance…% movement may be one of them in this case
Company A sales growth- 2m To 5m will give you 150% increase while
Company B sales growth -20m To 25m gives you 25% increase.
Would you because Company A had a whopping 150% growth conclude it performed better than company B?Compute the simple TR days which is TR/sales *365….don’t even bother about average TR.
Do the trend analysis over the period and evaluate by explaining why
Compare n evaluate with those of the comparator comparator company
The marker is looking at the quality of your evaluation and not these stuffs you are currently engrossed in.
Hope this helps@avian
In addition…
Statement of comprehensive income and changes in equity deal with movement of items in reserves. You may bother less on those.
You may compute ratios like free cash flow or operating cash margin from your The cash flow statement. These ratios are invaluable when measuring financial health and cash management and liquidity rather than the traditional quick ratio and current ratio. Research n try them out…add some quality to your RAP…that is if you are aiming for something higher than a C grade.The question is;
Are you using the subsidiary company or its holding company as benchmark?
I believe both are separate entities.
Any comparator you chose to use must have its own financials – atleast IS and SFPDo the “mock” yourself.
Pick any typical but most challenging F7 past question
Work it out in any exam sheet, under exam condition and timing@Najasta
There is certainly no point comparing focus comp 2013 with comparator comp 2012….your project will be badly limited to the point that quality may be impaired. You surely have to update where focus comp 2013 is available. Get comparator comp unaudited result or compilation of quarterly results or at worse forecast. If you can’t get this find industry ratios. If you can’t get this get another focus comp with comparator comp with updatex fs