Corporate Reporting (25-6014-00L) – 2015/16

Individual coursework (RightmovePlc)

This assignment is 40% of the final weighted mark for the module.

During your first seminar (week 10) you should agree with your seminar tutor a choice of a FTSE 350 company (from a designated list). Each student in a seminar group will be expected to choose a different company from this list.

Once your choice is agreed you should start to build up an electronic portfolio on your chosen company (although it is more than likely this will be a group of companies).

Potential sources of relevant information are:
• internal
? most recent annual report and accounts. This can be found by searching online for your company and usually ‘investor relations’.
? other corporate website material (e.g. interim reports, quarterly trading statements and other company announcements)

• external
? share price information (this may also be on the company’s own website)
? financial and business press for relevant news articles on the company and its business sector
? other media e.g. Bloomberg (Bloomberg Room on Adsetts Level 4)
Requirements

You are required to prepare a report on your chosen company that would be of interest to a potential shareholder to include the following:

1. Header page with your name, student ID and chosen company

2. Introduction to include:

2.1 Company name/most recent financial year-end date/name of external auditors
2.2 A brief description of the company’s business model (an explanation of what the company does and any distinguishing features) – maximum 100 words
2.3 The names of the Chairman, Chief Executive Officer (or equivalent) and Finance Director and any other Executive Directors and their titles/roles
2.4 Market capitalisation (number of ordinary shares x share price) as at 31 December 2015 and 2014
(5 marks)

3. Financial details and ratios (include these in the Appendix, see 6 below. This section is excluded from the word count)

Prepare a table or spreadsheet setting out the following variables for the most recent and previous financial year, showing clearly any % increase or % decrease and whether this represents a “better”, “worse” or “unchanged” position or performance (note 1):

3.1 Revenue (also by segment if available), cost of sales (if available), gross profit, (if available), profit from operations (this may need to be calculated) and profit for the year

3.2 Non-current assets, current assets, current liabilities, non-current liabilities and equity

3.3 Cash generated from operations, net cash in/outflow from operations, net cash in/outflow from investing activities, net cash in/outflow from financing activities and the net increase/decrease in cash for the period

3.4 Suitable ratios covering: overall performance, profitability, activity, liquidity, financial structure, investment and cash flow (maximum 14 ratios per year)

You should ensure you show clear workings to support the ratios, linking your numbers back to the financial statements and justifying your numbers where there are choices.
(20 marks)

Extra notes – part 3
Note 1 – for some changes, it may not be possible to say whether they are ‘better’ or ‘worse’ e.g. cost of sales (see FAQ), in which case put ‘n/a’.

Note 2 – if you have made assumptions when deciding what figures to include in any particular ratio, include the assumption (see FAQ).

Note 3 – do NOT calculate EPS as one of your 14 ratios, it will already be shown in the financial statements and the basis of calculation will be included in the notes.
4. Analysis and interpretation(1500 words)

4.1 Analyse the financial performance and position of your chosen company over the last two years in a way that would be helpful to a potential shareholder.

Your report should give possible explanations for any changes in performance and position that you have identified from the ratios (in section 3 above) and from the financial statements. You are NOT required to explain the meaning of the ratios calculated.

4.2 Comment on the performance and position of your chosen company since the most recent financial year end, up to Thursday 31 December 2015.
(40 marks)
5. Possible improvements to your chosen company’s Annual Report
(500 words)

Recent reports issued by the FRC Lab discuss how the Annual Reports of UK Companies could be improved.

Comment on 3 aspects of your chosen company’s Annual Report which could be changed to make it more useful for a potential shareholder.

For each of the 3 aspects:
• identify the aspect (state the page number in the Annual Report) and briefly outline why this particular area needs improving
• suggest possible changes that could be made to make the Annual Report more helpful to potential shareholders for this particular aspect
• explain why the change you propose would make it more helpful for potential shareholders.

(For the examples identified in part 5 above, include the relevant pages of the Annual Report in the Appendix (see part 6 below) and be specific about what your chosen company could do to improve their Annual Report).

(12 marks)

Extra notes – part 5
Note 1 – In part 5 above, you can comment on items included in both the financial statements and / or in the narrative reporting.

Note 2 – You may wish to refer to recent reports issued by the FRC Lab to support your proposals, but you must apply these ideas to your company to gain marks.

Note 3 – General statements such as ‘the Annual Report is too long/complex for shareholders to understand’ will NOT gain marks. We are interested in what you think about the way your chosen company has chosen to present (or not present) specific aspects of its situation in its Annual Report.

Note 4 – the question asks you to consider 3 aspects only. If you discuss less than 3 aspects you will lose marks. If you discuss more than 3, only the first 3 aspects will gain marks. Include what you think are the most important areas.

cont…
6. Appendix/Appendices to include:

a) Financial details and ratios (see Section 3 above)
b) Extracts from the consolidated financial statements, including:
• all the primary financial statements:
– consolidated income statement /consolidated statement of comprehensive income
– consolidated statement of financial position
– consolidated statement of changes in equity
– consolidated cash flow statement
• the segmental information note from the financial statements
c) Copies of other relevant information (e.g. strategic report, media articles, other notes to the financial statements) that you have referred to in your report

(3 marks)

(Layout, presentation and professionalism – 5 marks)

(Total – 85 marks – scaled to 40%)

Submission details

Your report should be submitted via SHIP and Turnitin:
• to SHIP – submit all parts outlined in points 1 to 6 above, including the information specified in a), b) and c) of the Appendix (part 6)
• via Turnitin – as for submission to the SHIP but do NOT include the extracts specified in b) and c) of the Appendix (part 6).

The deadline for submission is 3.30 pm on Monday 1 February 2016.

Extra notes – submission and word count
Note 1 – appendices are not included in the stated word limits.
Note 2 – total word count is 2,100 words:
* section 2.2 = 100 maximum
* section 4 = 1,500 (+ or – 10%)
* section 5 = 500 (+ or – 10%)
Note 3 – you do not need to submit your full electronic portfolio (mentioned on page 1) but it may be required on an individual basis by your seminar tutor as part of the marking and moderation process.

CORP REP CWORK _Main_15/16(1) _JR