Topic 8 Financial Statements

@Haider Ijaz No you should not. You use the 2012 and write audited financial statements publish late on 28 Oct 2013 thats why i have used 2012. Mention it in limitation of information gathering or on FS Extracts. Thank You.

Check Apples investors section for its availability. If its available and still you decide to use 2012 as the latest FS, just make little explanation in limitation of information that it was published after you have started your analysis. I hope this helps

Hello! Will I be penalised if my target organisation (YE 31Dec12) has different year end than benchmark (YE31Mar12)? Thanks AJ

I beleive that comparing will be strange.....apple with oranges.......i recommend same year ends

What do you mean? You need to compare financial performance of your organisation with a benchmark organisation or indusrty norms...Right?... And my question is if the marker will penalise me if two companies will have different year ends..

Thanks SalahUddin I was trying to find benchmark organisation with the same year end but I couldn't. Its because I do the analysis of a niche market company and there are not that many organisations involved. So I was thinking that if I highlight this problem within limitation of information gathering section I will be fine.... But I'm not sure....

Choose Apple or choose Nokia or British airways ..... dont give any chance for the marker to fail......you have to pass only.....make it as easy as you can!.......time is money bro :)..... there is no competition :)....enjoy.....by the way only days remaining how will you do it ?

12 days*

@SalahUddin Thanks for reply. I've done 80% of work so 12 days should be enough, but from the other side 12 days its not enough to change subject organisation.

please can someone send me a sample of a passed thesis for the topic number 8? i am already done writing mine just want to make sure that i am not missing anything. i need it urgently. thanks! my email address is [email protected]

I would like to know if it is possible to compare the financial performance of two companies, one having an audited financial statements and the other one being unaudited. Will I be penalised for that ?

Dear trephena , i am preparing topic 8 and after reading the information pack, it is noticed that latest financial statement shall be used. Since my analysis company is not a listed company so there is no requirement for disclosure on their financial statement, can I use 2010-2012 data available on hand ? Thank you

@gbscool Although you do not have to use plc's for Topic 8, unless you have a close connection with the company you wish to focus on you should consider whether you will be able to fulfill all of the RAP requirements. Will you have sufficient information (e.g. from analyst reports and the business press) to produce a good, balanced and objective report? (just using annual reports may not be enough to pass). How are you going to choose a suitable comparator? (You must do some meaningful benchmarking and this normally means selecting a relevant competitor or at least having access to valid industry benchmarking information). Evaluation goes far beyond just calculating a few ratios and commenting on the movements in the trends and unless you can uncover some of the relevant factors that lie behind the company's performance you are unlikely to be able to meet the assessment criteria for a pass. Assuming that you are satisfied that the above is not a problem, if there is no prospect of access to the 2013 statements then you will need to explain this and discuss it in your limitations section. You should however ascertain that the material is not available as the markers WILL check and if it was in the public domain in accordance with the dates in the latest Information Pack, then your RAP will be failed. In the UK private companies still have to file their financial statements and these are available for a very nominal cost (a matter of a pound or two) from Companies House (and therefore you would be expected to have used these). The final thing to remember is that private companies' accounts comprise financial statements only and the minimum amount of information required by law and therefore will not usually contain additional information to shareholders (CEO / directors reports which often outline strategies and future plans).

@trephena... sorry about that. Are you a mentor yourself?? Thanks for that paragraph was really good. I was thinking would it be wise to calculate ratios for the comparator and place them in my research and evaluation work without showing that company's financial statements at all??

@trephena.. Thanks for the good work on here.. I have another issue.. i have just read your forum somewhere else and you talked about Excel calculations and extracting financial statements into excel. I was thinking of copying and pasting those statements from annual reports straight into my WORD RAP document and doing the little calculations of the ratios in there too. Is that an absolute fail?? Is it compulsory to use Excel for this purpose? And also please, Appendices and references, can that not be one document titled RAP for uploading to OBU? THANKS AGAIN

@lamech311 If you extensively put things in the wrong place you can be failed on the Presentation of the project findings as it interferes with the flow of the commentary, analysis and findings. So do NOT show the actual formulae or calculations in your report (all workings go in the appendices). You should aim to have some work in a spreadsheet that you can load as a separate appendix file, for example you could do some ratio calculations. I always advise using plenty of graphs and bar charts in your report to break up the text and also because these show the trends (so you don't need to describe what is going on as it is readily apparent). So you may be able to use another tab on your spreadsheet to show how you built up your graphs from your figures (but you will need to paste copies of these graphs into your report as images). You may use extracts from the accounts and should attach both companies' figures - these may be loaded as a pdf file (but see the size limits in the Information Pack) but again the extracts do not go in the RAP. It is also permissible to use any of the ratios that the companies themselves have calculated. However you must not overlook referencing. Graphs, charts and information from the financial statements (figures or text) must all be appropriately referenced each time. The rule of thumb with the report and the appendices is that workings and ancillary information all go in the appendices as they 'get in the way' in the report as they do not 'add any value' on their own. Keep your references as a separate word document as when you submit online it will ask for a reference file. Have I covered everything? PS I am the OBU Forum Moderator and therefore it would compromise my position and be a conflict of interest for me if I were to take on students for mentoring on the forum. (I did most of my studying distance learning so I understand the difficulties of working alone and the need for good advice. As I have over 10 years RAP experience and an MSc, I am able to answer student queries on our Forums in relation to how to address the academic requirements for the RAP and offer advice on how to meet the assessment criteria) :-D

u just prepare appendix report and this report contains balance sheet and profit and loss account, formula, and ratio computation

Dear student, make benchmark your competitor in the similar field. and do comparison of financial position with ur competitor. business analysis should be done on your company only. Like swot analysis , pestel. bsc

@Trephena thanks for the good work The company i want to work with on topic eight has the split of the statements between quarters and the end years. I am not sure if the quarters are audited. Can i ignore the quarters statements and work with end of year figures you think? Secondly is about excel, Do i have to calculate my ratios for example profitability, investor ratios with excel? ...and then the bit of showing the formula the basic excel i know the formula hides behind the figures... Any suggestions on the best way to extract financial statements from company websites please in to my RAP ... for both my company i want to analyse and the the comparator as they go along with the commentary. I will be grateful

@lamech 311. It is easier for you to work with the year end figures if possible I am not exactly sure what you are asking about Excel. You should not show formulas or calculations in the RAP itself. All of this goes in the Appendices. You just need to reference where your figures came from e.g. Appendix 1 then show in the Appendices where the raw data came from. You can use Excel to calculate your ratios and also the graphs. Regarding the statements - you may be able to copy and paste the actual financial statements as a pdf document. Most annual reports have file sizes that exceed the OBU limit so ensure that yours don't or you will experience problems when submitting

@trephena.. thanks for that information really appreciate. I have another problem and i hope this finds you well :) My company's and comparator statements are in a PDF format BUT a huge PDF file with CEO,CFO,AUDITOR REPORTS and statements commentary. Now, I have adobe reader xi, i have tried to copy and paste those pages with the statements but it would not let me. Is it allowed to attach the whole PDF file from the companies website into my appendices?

@lamech311 I think you will find that the size of the file is far too big if you try posting the lot as pdf. The solution may be to scan a copy of just the financial statements and save them as a pdf file - unless someone else has any other ideas? Otherwise you may be in to typing them manually into Excel (Section 8(b), Page 51 of the latest Information Pack give the file limits. From discussions I've had with the Chief Administrator, anything larger that exceeds these limits will cause a problem when you try to upload your files) Regarding your previous question about using latest Quarter results please see the bottom of the first page of the Forum 'Quick Clarification - Financial year results', where I have discussed this previously.

@TREPHENA i have tried all sorts but adobe can not let me copy and paste. What i am going to do is print the statements and then scan them as PDFs for both company and Comparator. If say i did them in pdf format how can i go about with formulas in excel in ratio calculation? Just a clarification please, my company year end is 31 march, so am i correct to start with FY 11/12 statements? With the the SLS, do i need to repeat the 4 questions in my upload as this will count towards the word count?

@lamech311. You will have to do prints and scans as you suggest. Unless you have access to a program that will convert pdf to Excel you will probably end up having to type in your figures on the Excel spreadsheet but you can use some of the ratios that the company has already calculated if appropriate as long as you acknowledge the sources. Yes your reference year starts with year end 31 Mar 2012. You do not have to repeat the whole of the Questions (or do a contents page) for the SLS. You could shorten- e.g. Q2 How I met RAP Objectives, Q3 Interpersonal and Communication skills

thanks very much @ trephena

Thanks guys for this discussion, the company I am assesing on my RAP have financial statements from different sources eg from their website, London Stock Exchange, and other search sites. However there is a slight difference between them and some of them have extra bits which is missing in the company's statements, I know that this is what I should mention in my limitations section, but I dont know which ones to rely on and whether to use the extra bits as well. At the moment I am using all the financial statements by just selecting what I think is important for my use. Any ideas on how I should go about it? Thanks

@trephena Thank you very much trephena, i just on business trip and back this week. I have read through your advise and really appreciate your guidance. I decide to amend my RAP and make the financial statement from 2011-2013 as latest in my 2014 November submission. The company i work for is a UK registered bank's subsidiary in China. Since all the foreign banks are subsidiaridise in China, the financial information and market information will be available on internet, to avoid overwhelming information, i will use only HSBC China and my compnies data. Will this be ok? thank you again.

Hi @trephena, I am doing topic 8, can I know which figure to use (group or company) from financial statement? Normally there are two types of figure available.

@jeyasree. To a certain extent you can choose whether you want to use a company that is in a group or look at the group as a whole provided that you do the same for the comparator and are consistent and don't swap between the two. So the choice is yours.

@gbscool Apologies for the delay in responding. Yes you need to compare like with like so it would be meaningless to compare a local bank with the global operations of something like HSBC. Remember with a bank you need to tailor the ratios to the industry (CAMELS model perhaps?) but as you work in the industry that shouldn't be a problem. Mention the work of the Basel Committee and anything else that is bank specific and relevant to the analysis of a bank. BTW did you contact the Learning Luminarium about mentoring?