BMM5412 Financial Management Assignment Brief Learning Outcomes for this Assessment Formulate appropriate, measurable financial objectives and review financial performance against targets,

BMM5412 Financial Management

Assignment Brief

Learning Outcomes for this Assessment

1. Formulate appropriate, measurable financial objectives and review financial performance against targets, using appropriate ratios to assess the performance of a company and to identify potential corporate financial failure.
2. Appraise the management of working capital in a company and maximisation of returns to shareholders, including an explanation and evaluation of company dividend policy.
3. Operate and evaluate investment appraisal techniques, using appropriate techniques to identify the optimal investment with and without capital rationing.
4. Critically evaluate alternative sources of finance for operations and development and calculate an appropriate cost of capital for an organisation to use with discounted cash flow techniques.
5. Investigate the ‘finance function’ in corporate management and governance, signposting areas of weakness in financial management, monitoring or control and formulating strategies for remediation.

Individual Written Assignment

The main objective of the assignment is to assess your understanding of the five learning outcomes of the module. To pass the assignment, you must demonstrate your basic understanding of financial management by completing all the five tasks set out below.

The assignment consists of FIVE tasks.

Company Selection and Approval:

To complete your Financial Management assignment, you are required to:

• Select a public limited company listed on the London Stock Exchange (LSE). Please ensure that your selected company in in the list available in the following link: https://www.londonstockexchange.com/indices/ftse-all-share/constituents/table
• Download the most recent annual report for the selected company from their official website.
• Present the annual report to your teacher and obtain approval from your teacher before proceeding with the following five tasks.
• Ensure that you include the financial statements (specifically the Income Statement and Statement of Financial Position/Balance Sheet) in the Appendix of your assignment.

Task 1

1.1 Provide an overview of the selected company, including its key operations, history, and market position. Also, describe the company’s financial objectives and goals as outlined in the most recent annual report.

1.2 Analyse and compare the company’s financial performance with the previous year by evaluating the following financial ratios:

• Profitability ratios.
• Efficiency ratios.
• Liquidity ratios.
• Financial gearing ratios.

You are required to show calculation of the ratio and interpret the results to analyse and compare the company’s financial performance with the previous year.

Task 2

2.1 Define ‘working capital’ and discuss its key components. Calculate the working capital of your selected company, and critically evaluate the management of working capital by the company over the past two years.

2.2 Explain and evaluate the selected company’s dividend policy.

Task 3

3.1 Identify and critically evaluate major investment appraisal techniques that can be used by the selected company.

3.2 The management of the company you have selected is evaluating two investment projects, Project X and Project Y. The following information is available:

• Project X has a Payback Period of 3 years, an Internal Rate of Return (IRR) of 14%, and an NPV of £60,000.
• Project Y has a Payback Period of 4 years, an IRR of 16%, and an NPV of £50,000.

The cost of capital is 10%, and there are no capital constraints.

Using the Payback Period, Internal Rate of Return (IRR), and Net Present value (NPV) methods, assess the viability of both projects and recommend which one should be selected by the management. Justify your recommendation with appropriate reasoning.

Task 4

4.1 Critically evaluate the different sources of finance, focusing on both equity finance and debt finance. Provide examples of each from the selected company.

4.2 Using the most recent annual report of your selected company, identify and evaluate the company’s utilization of equity and debt finance.

Task 5

5.1 Critically examine the role of the finance function in corporate management and governance. Discuss how it contributes to decision-making, accountability, and transparency within an organization.

5.2 Analyse the corporate governance practices of the selected Identify any weaknesses in financial management, monitoring, and control, and Propose improvement recommendations based on best practices in corporate governance.