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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