The principal activities of the Company includes PU blushing, printing and distributing newspapers, distributing magazines and books, providing multimedia content and services, holding shares in subsidiaries, holding investments, and providing management services to subsidiaries. Required: To meet your clients request, you are required download the financial statements contained in the latest annual report of SSP, and prepare a report to evaluate the performance of SSP in relation to profitability, liquidity, gearing, asset utilization, and stock market performance.
Your report must be supported by calculation of relevant ratios in the FIVE evaluation areas mentioned above. All ratio definitions and supportive calculations should be clearly shown. Total for part A: (8 marks per part * 5 parts = 40%) LOSS Financial Management & Control Individual Assignment 3 PART B (30%) Breadth Ltd. Is introducing a new line of pastries to its existing range of confectioneries. The company expects to sell $600,000 of the new product in the first year and $800,000 each year thereafter.
Direct cash costs including labor and materials will be 40% of sales. Incremental overheads are estimated at $85,000 a year. The new product will require several new ovens that will cost a total Of $950,000 and be depreciated by straight line over four years. The company’s cost of capital is 12%. No additional working capital is required. Required: a) Prepare a statement showing the incremental cash flows for this project over a 4 year period. (5 marks ) b) Calculate the Payback Period (3 marks) c) Calculate the net present value at ( 3 marks) d)
Calculate the internal rate of return, by calculating the net present value at 20%. ( 4 marks) e) Briefly analyses how you deal with the following items for the purpose of capital project evaluation) Working capital? ( 5 marks ) Purport nits cost? (5 marks) Sunk cost? ( 5 marks) PART C (30%) A company intending to raise long term funds has several choices. Critically evaluate the following sources of funds; a) Debentures b) Ordinary shares (15 + 15-?30 marks) US Financial Management & Control Individual Assignment 4 Notes: 1.
To obtain a high mark, you should: ) Make your report concise, precise and well presented and structured; b) Draw logical conclusions from accounting information; c) Synthesis information in a coherent and useful way; d) Show evidence of key text and background reading; e) Incorporate your knowledge into an integrated piece of work; f) Demonstrate critical understanding of financial management.