Many public companies now publish their Annual Report on their web-sites to provide information to people, who are interested in the performance and financial position of the company.

     

    Select two companies, which are in the same industry. One should be a British company and the other should be a
    company in which you are a stakeholder or have a particular interest as an existing or potential shareholder or
    as a supplier or employee. It is important that both companies are in the same industry and both could be
    British, but this is not essential.

    Using the company reports, compare and contrast the information provided in each of the Annual Reports that you
    have selected. Your discussion should cover the following areas:-

    a) Explain the information you consider would be of interest to each of the possible users of the Annual Report:-

    i. existing shareholders
    ii. potential shareholders
    iii. lenders and suppliers
    iv. employees

    (20 marks)

    b) Do you consider that the information provided in the Annual Reports meets the areas of interest that were
    discussed in (a)? In your answer, you should consider the accounting conventions and practices that may limit the
    usefulness of the information provided to the stakeholders.

    (30 marks)

    c) Prepare an analysis of the performance and financial position of both the companies you have chosen. It is not
    necessary to attach the details of the Annual Report but the internet address should be provided. If it is not
    possible to obtain the share price on the day on which the financial statements were prepared, use the most
    recent share price that you can find. (This information is needed to calculate the Price Earnings ratio).

    (50 marks)
    (Total marks 100)

    discuss the possible causes and effects of any changes in the ratios and it would not be appropriate to only
    repeat the ratios. The purpose of calculating the ratio figures is to gain an insight into the performance and
    financial position of the company over the period, and to provide intra-firm as well as industry comparisons.
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