Topic 8 Financial Statements

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. 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?

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!!!!

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

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

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!

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.

Hi there i choose for my topic Ryanair and Flybe.

On their financial statements the two airlines are assinged as Ryanair Holdings Ltd and Flybe Group PLC. Is it any problem to use their consolidated financial statements from their annuals reports?

Thank you.

esg2011 – this problem has been discussed several times before on
https://opentuition.com/topic/quick-clarification-financial-year-results/

The main issue here is whether your industry sector is seasonal. So if you are doing telecommunications or pharmaceuticals this is not a real problem. With airlines there are two definite high seasons (July -August and then December) and so it is advisable to use statements that cover the same high seasons for airlines. So a year end for one of Dec 2015 and a year end of March 2016 for the other would both over the high seasons in 2015 whereas Sept 2015 and March 2016 do not.

You would be allowed to use the Sep 2015 statements as it complies with the rules in the Information pack however you would need to adjust the figures for the comparator with regard to income and profit to ensure that you were comparing the appropriate high season periods for airlines. This could be tedious as you will need to do this for all the years for the comparator if you are hoping for a high grade (If you only use one year’s figures for the comparator you can’t get more than a C).

So it comes down to what sector your company is in and want to do with regard to grade. If doing an airline read that forum specifically about using an airline as I give advice on the appropriate approach to take with regard to analysis.

@Steven -no problem as long as both are consolidated as you need to compare like with like

Please consult our forum ‘Using and airline for T8’. Read through to get ideas on how to approach this topic. In theory BA and Virgin would be a good match provided you can get the annual reports for the latter as it is not a plc.

Look at the definition of Primary Data – and then think realistically is anyone senior and knowledgeable in the company going to give you an interview? Short answer, NO! Is it worth conducting a survey? How much do you know about operational research? Probably like most students very little – in which case how are you going to get reliable data that actually adds value to your work (is not subjective and is valid)? So why bother going down this route when the annual reports, news and business articles will provide all the information needed for an A grade if properly put together? (As are very rarely given for any Topic 8s because the secondary research is inadequate or the student does not make connections with what they read to the company performance via linking SWOT and PEST factors). The key to a good grade is excellent secondary research, objective and critical analysis of the information and data and good presentation of this data.

Many ill informed mentors in Pakistan tell their students to try to interview the management. For many years the markers have suspected these so called ‘interviews’ are fabricated and just ignore them anyway and focus on the secondary data. So in the end, primary data unless it is a company you actually work for and genuinely have interviewed the finance director or one of his buddies is just not going to get you anywhere. Enough said?

Hi Trephena,

is it necessary to read entire annual report? I am going to start part 3 and I am really confused about it. Also, could you tell me approximately how much time will it take to complete part 3.

@farhana001 – you must read the CEO/Chairman and Directors reports – these are key to understanding the strategies that underlie the decisions and subsequent performance. I suggest that you read my article on Evaluation & Analysis on our homepage http://www.opentuition.com/obu

You need to learn the correct approach when doing analysis as this, when you have read and made some working notes on the CEO reports etc, should guide your research. Do your models next as the application of the models (ideally SWOT & PEST) should also help you with gaining a clearer picture of what the major influences and impacts have been over the 3 year period and the strategies management have used as a consequence.

It is impossible to tell you how much time it will take except that it normally takes longer than you expect. A good report with excellent analysis for an A Grade will require thorough research and sensible well reasoned analysis but there is time to do this before P33 closes if you start Part 3 now. A superficial report with weak analysis done in a hurry is unlikely to meet the assessment criteria and remember a good layout with clear graphs will help both you and the marker to see what has gone on. So you should use the word count explaining the factors behind the trends not repeating the figures and talking about increases and decreases as this is NOT analysis.