Topic 8 Financial Statements

Hi @Emmanuel, I have read your post. Have you discussed your topic and organisation with your project Mentor in your first meeting? I am afraid why do you not discuss this limitation with your Mentor before working on your project. All these factor will be brought to the attention of your Mentor and get his/her valuable suggestion. OBU is continuously making new changes, improving project quality and allow you to get guidance properly. You should not write your project without meetings and avoid plagiarism. I would like to suggest you to change your company or find individual accounts of your company. do not make simple things complicated. analysis on consolidated accounts is not too easy and you have to consider word limit as well. There is no restriction to select organisation from any country. there is a plenty of time and organisations you easily CAN select and work on them. Make your life easy. I suggest you to select Verizon vs at&t (Telecommunication) US based companies or Emirates vs Ethiad Airways UAE based companies, Gilliard vs Abbott or GSK vs Pfizer. If you have a question, feel free to ask me. Regards, Ali Farooq OBU Registered Mentor

Hi @Emmanuel, I would like to add one more point in my answer that if in case your report is not understandable examiner can get confused and frustrated, they can fail. Make wise decision. Regards,

Can't find individual accounts of my company.my competitor is also a group.Should I compare the consolidates financial statements?

Hi @Bakhtawer, Can you provide further detail about your company and competitor? it varies case by case suppose if you select Pepsi USA vs. Coca Cola USA so you will not be in trouble. Regards, Ali Farooq OBU Registered Mentor

Except these companies do not fit the prescribed industry sectors of Pharmaceuticals, airlines or telecommunications that OBU has made mandatory for P32 onwards

The company is Qantas airways and the competitor is virgin Australia.

@trephena said: Except these companies do not fit the prescribed industry sectors of Pharmaceuticals, airlines or telecommunications that OBU has made mandatory for P32 onwards

sir both the companies are airlines. Trephena's reply - you have read my reply totally out of sequence - I was referring to the post immediately above mine that mentioned Coca Cola and Pepsi... and having spent over 8 years working g in the airline industry I am well aware that Quantas is an Australian airline! BTW - if doing an airline look at the topic I have specifically set up for Using an AIRLINE for Topic 8. As mentioned on other forums don't attempt an airline for T15 unless you work in the financial department of one - their operations are usually far too complex for anyone outside the industry to understand as stochastic modelling is used (standard cash management models are not appropriate).

@Bakhtawer You can compare consolidated accounts too. Both companies meet criteria of being airline but ensure you do not use a company which has only cargo service. Regards, Hammad Ahmed Qureshi - OBU Registered Mentor.

I am trying to pick a topic and my first choice had been T8. I did find however like Emmanuel the information for companies in the required sectors in my country were not readily available to the public. I figured using group financials would be abit more complicated due to different locales and different currencies for some. Considering not only purely financial information is analysed, doing analysis on companies outside your country you may not get enough information. What do you advise?

@trephena, I 'am really confused as to whether its necessary to do the analysis on consolidated financial statements for an A or just the company's could still help me achieve that? Please help.. Best regards

@namugenze Yes analysing a company oversease is a good option. Such as of top 2 listed pharmaceutical companies but remember, for multinational company analysis, you must see from bigger perspective & business view is comprehensive which include different products, then population of city & its dynamics, then city itself, country, region and overall world political events & developments. You may also choose a local company operating in another country that is standalone. Best site to select a company who have bulk of information available on internet are stock exchanges websites. Regards, Hammad Ahmed Qureshi - OBU Registered Mentor.

@namugenze OBU has not bound you to select company for your country only. You can select companies from any country. You can find lot of companies from Africa, Asia, United States and United Kingdom. In the United States, all public listed companies have been following Sabon-Oxley act and and reporting more financial disclosures. to make your analyzing more meaningful you should select companies from same country otherwise you will have to evaluate different economic, Financial and business environment. There is a major limitation of word limit. You can not exceed beyond 7500 in your research report. Regards, ALI FAROOQ OBU Registered Mentor

hlo i have selected cipla (indian pharmaceutical co.) for RAP. but the company has 49 subsidiaries do i need to analyse performance of all subsidiaries as it would be nearly impossible within word limit of 4500.

@sony98 If you have selected CIPLA Group then you need to analyse overall group performance sub divided in to material & key products, regions and companies which led major change in numbers from year to other and in comparison with competitor. Be specific on key reason not 49 subsidiaries. If group sales are up by 30% then write which company or companies led major change by what amount and percentage. Also write which region led major improvement if regional information is available and which key product led this increase. So, focus on key reasons. Regards, Hammad Ahmed Qureshi - OBU Registered Mentor.

@sony98 Hi. hope you are doing well. you can chose different company where you can find individual accounts and make your life easy. If you can find individual accounts of CIPLA then you dont have to discuss about its subsidiaries and write balance report. You can not exceed your word limit it will give very bad impression and will effect on your result.. Anything else I can help you. Regards, Ali farooq BSC registered Mentor

Hello, 2015's financial statements of the company I have selected are not published yet . So to analyse for three years period , I was planning to take figures of 2014, 2013, 2012 and 2011. But, now I found out that 2011's annual reports are not available either. So I took comparative figures from the financial statements of 2012 and used them as 2011's figures. Is it correct and enough? Please advice!

@accadubaistudent Try to search and find if you can get financials for latest 3 years available if its not, then use comparative and state it under limitation of information gathering section. Regards, Hammad Ahmed Qureshi – OBU Registered Mentor.

Kindly let me know dear where we should use consolidated fin statements or subsidiary individual statements.also let me know wether i should work globally or keep myself limited to my country

Hello hammad is there any way to find individual statements of merck and glaxosmithkline

Hello. I just want to ask a simple question. As we have to upload three years financial statements of our primary company, is it necessary to upload three years F/S for our competitor also or should i just upload the latest one year competitors F/S? Another question is that what should we upload e.g. only Balance sheet and Profit and loss account or Is it necessary to upload statement of cash flows also? Finally, If I want to analyse three years then how many year's figures should I take? e.g. 2014, 2013, 2012 and 2011 or just 2014, 2013 and 2012?

Sorry for interruption. Please let me know whether I should take the comparative figures or should I take the figures from every individual annual report. Thanks in advance.

Hi everybody I've completed the PESTEL, SWOT and 5 forces analysis for my report, now i have the ratio analysis and conclusion left to do. I've been reading lots of posts in this forum but still have got an idea how to start off with. I've read the CEO comments and other stuffs in the previous annual reports too, but don't really know what data should be put into my spreadsheet to start. btw, i've chosen Topic 8: airlines and the deadline is coming very soon. Should i put all the figures from the FS to my spreadsheet, then start working out ratios underneath them? Or should i put the FS figures in different tabs? if so, how do i use the figures from other tabs in the formulae ? (Sorry im a complete newbie in Excel) Any advice would be very much appreciated!!!!

These are the sorts of things you should be discussing with and going over with your mentor-or don't you have one??

Dear Trephena, Thank you for the help your giving to students. I failed my RAP during the first submission, the examiner made a comment that went like...'You also attempt to compare EPS and dividends in absolute terms' Could you please explain to me what he what he meant by that because I don't understand it? Hope to hear from you. Thanks again

@mawex - comparing earnings and dividends in absolute terms usually means that you had compared and discussed the actual monetary amount rather than compared the actual ratios. The purpose of the ratios is that it 'evens up' things so that the real differences in the companies' performances are more readily apparent. It is perhaps easier to understand and see the significance of this when looking at some basic ratios e.g. gross profit ratio and the current ratio - you would not try to make comparisons between the two companies just on their current assets, current liabilities and profits and direct costs etc Turning them into ratios allows them to be performance comparison measures and the ensuing discussion more valid

Please help!!! Can i use a group company as my main research company then a single company as the comparator? How good or bad is it? Your response is highly appreciated. Thanks

How good or bad? Mega bad! The whole idea is that you compare like with like so group and group or single company and single company not one of each BTW please do not open a new topic each time - there is one,already for this topic (on p. 3 ) - T8 using group financial statements / consolidated accounts. This forum is a bit like your RAP - you sometimes need to research a little for yourself! :-D

Hi! I am preparing for submission in November 2016. The company's fiscal year end is September, while the comparator's year end is March. Therefore, latest published report for the company is September 2015 (available November 2015) and for comparator March 2016 (available May 2016). I've been wondering: 1) Is it acceptable to use 2013-2015 for period of study (if in November 2016 information in financial statements will be over 12 months old)? 2) Will it be necessary to use 2013-2015 for the company and 2014-2016 for the comparator (since comparator's annual report 2016 is already available)? Thanks for any help!

Dear Trephena, I have been on OBU RAP research on topic 8 on two companies I have successfully accessed analyst report on my main company, but i can not see much of analyst report on the comparator that i am using, but there is much information on the annual report specifically supporting my evaluation of the competitor's performance. i have been able to generate up to 66 references for the research work 40 specifically relate to the main company while upto 16 is general economic information affecting both companies. Can this approach achieve a PASS? Pls advise me on this, I need a help now that I can make some changes. I have also seen another company but it is a group which i can use to replace the comparator. But my company of study is a single company not a group company. Analyst information is available on this company. My main fear is whether i can use group information to compare single company information. Please reply ASAP. Thank You.

Stick with Plan A (both single companies). You ask if this is enough references to pass. It is not a case of how many references are used but how appropriate they are and the general quality of the analysis. The approach to take is to read all the CEO and directors' reports and track their strategies through to financial performance assessing how well the company has built on its strengths and how it has reacted to changes in its business environment. So start your analysis with the models (I recommend SWOT and PEST(LE). Good application of those carried forward to the financial analysis is the best way to pass. Presenting clear graphs and not going overboard on stating percentages for the sake of it but focusing on figures that are significant and explaining them well (linking them to the strategies and models) with everything well referenced will greatly improve the chances of passing.