Accounting and Financial Management Case Study Assessment Answers
Assignment Detail:-
Number of Words: 3500
Seeking the best Accounting and Financial Management Assessment Solutions? If so, visit Assignmenttask.com. We provide Financial Management Assignment Help and Accounting Assignment Help at the best prices. Students can avail of our Case Study Help for MBA with 100% plagiarism free content.
Case A: Comparison of AG Barr v Britvic
Freshly armed with your new Warwick MBA, you have recently joined an executive recruitment firm that specialises in advising and placing senior managers in the drinks industry. One of your clients is currently considering an offer of a senior post at AG Barr Plc when a similar post comes up at Britvic Plc (the companies have a long history of competition and rivalry). Both posts carry similar salaries and share option packages.
Your client has some time to respond to AG Barr Plc so is interested to learn more about both companies. She has commissioned you to write a report advising her on the past financial position and financial strength of AG Barr Plc in comparison to Britvic Plc. Your client, given Covid and other recent world events, is particularly interested in how the two companies compare in terms of their future sustainability in terms of financial performance, financial stability and rewards.
Required
Write the requested report comparing the financial performance and position of both companies as well as commenting on the attractiveness or otherwise of the share options package which, on the face of it, appear to be broadly similar. Ensure that you make clear recommendations.
Note that your client is a busy executive but with limited experience of accounting. She will expect a clear and concise report (not exceeding 2,500 words excluding appendices). Some general guidance on acceptable report style follows:
Notes on general report style.
- Use the most recent annual accounts of AG Barr Plc and Britvic.
- Give your report a title & provide an Executive Summary,
- Give a brief introduction to cover the issues to be analysed and the approach you will consider.
- Within the report don’t just show lots of calculations, explain what you infer from the numbers and ratios and how they support your conclusions and recommendations.
- Define any non-standard ratios used but demote detailed calculations, etc. to an appendix.
- Cite references, state assumptions made, mention other information that might be useful or further investigations you would have liked to conduct. Fully consider both financial and non-financial factors.
- Reach a conclusion and give clear advice.
- Make your report “as concise as is consistent with clarity”.
- Make use of supportive diagrams – especially those that emphasise the comparisons between companies.
Case B: Risk and return on equity of AG Barr Plc and Britvic
Intrigued by the analysis you have done for your client in Case A, you are interested in comparing the two companies in terms of equity risk and return. Using monthly prices between May 2015 and May 2022, you compute the historical return and volatility of the two stocks. In order to round up your analysis, you also estimate the two stock’s betas based on their correlation with the FTSE 250 Share index. Wondering about the effect of the Covid-19 shock on equity returns, you repeat the same analysis including only monthly returns up to (and including) December 2019.
Required
Using the stock return analysis and knowledge you gained while writing the report in Case A, write a separate report that summarizes your thoughts concerning which company is a better investment opportunity when considering the risk-return trade-off. Consider the following issues:
- Pay attention to differences between volatility and betas when considering the risk-return trade-off. Describe what type of risk they measure.
- Can you provide interpretation for the estimated betas given the two firms operate in the same industry?
- How would you compute the rate of return you require for investing in these two stocks? What ‘ingredients’ would you need? Which stock has higher required rate of return and why? How is the required rate of return related to the average return computed based on the historical monthly returns? (Hint: you do not need to come up with exact estimates for all ‘ingredients’. A discussion of what they are is sufficient.)
- Would your recommendations differ based on the monthly prices ending in 2019 versus 2022? Which one would you use and why?
- Are historical data suitable for judging future performance for these two stocks? Your clear and concise report should consider the overall assignment word limit.
Notes on the data, your analysis and your submission.
- Use adjusted monthly closing prices from Yahoo Finance (or similar) that consider dividends and stock splits. The tickers are BAG.L for AG Barr Plc and BVIC.L for Britvic Plc.
- The ticker for the FTSE 250 index is ‘^FTMC’. The data is posted on my.wbs under individual assignment.
- Please do not forget to calculate monthly returns from the downloaded prices before running further analysis.
- You can use functions built into Microsoft Excel (like ‘average’, ‘stdev.p’, and ‘covariance.p’). Before using them, make sure that you understand what these functions do. It is perfectly fine not to rely on these or other functions but to base your analysis on your own calculations in Excel instead.
NOTE
Your reports should be submitted in one pdf document but the two reports (Case A and Case B) are separate and both should be self-contained with their own appendices, references etc. There is also the facility to upload your Case B spreadsheet separately but any spreadsheet work for Case A, e.g. tables, diagrams, calculations etc should be copied and pasted into the case A report or Case A appendices.
For REF… Use: #getanswers2002313