You   are   working   for MO   Investments   plc,   a   private   equity   company, as   a   financial analyst.  John  Menzies, the recently appointed CEO of MO Investments plc, was reading an article on the marketwatch.com website and sent you the following e-mail.

E-mail

To: Financial Analyst

From: John Menzies

Date: 30th January 2023

Subject: Best and worst performing US stocks

Hi,

I was reading an article on Morningstar about the best and worst performing US stocks in 2022             (https://www.morningstar.com/articles/1131191/morningstars-best-and-worst- performing-stocks-2022). You can view the list in the attachment to the e-mail.

In your role as a financial analyst, I’d like you to select one of the companies identified in the articles and fully analyse the performance of the business in order to help explain its change in share price.  I’m  interested to see if there is a potential opportunity to earn some good returns in the future by either buying shares in any of the companies at a low price, or by short selling the shares at a high price.

You will need to identify the most recent financial statements and any information released since the release of these financial statements to support your analysis.   I’ve been using the MarketLine        (https://liverpool.idm.oclc.org/login?url=http://advantage.marketline.com/) platform recently to retrieve financial information and have found it to be a very useful tool, and  I’d  request  that  you  use  this  to  help  you  with  the  analysis,  alongside  other  useful websites, press releases and industry information.

I’d just  like to emphasise that  I would  like you to analyse the performance of the  chosen business, so you should focus your attention on the income statement, however other areas of the annual report may be useful too.   I will leave this for you to decide which areas these may be.

Best wishes.

John

CEO MO Investments plc

Attachment - Best and worst performing US stocks 2022

1. Instructions

This coursework requires single submission of your report via Turnitin, which is a plagiarism and  collusion  detection  system.   If  you  do  not  submit  to Turnitin your  work  will  not  be marked.

To submit via Turnitin, you goto the assessment area for the module on CANVAS and you will find a link for the coursework.  Click on View/Complete and thenon the “submit” icon for the paper.  You are then prompted to submit a title for the paper.  Use the “browse” button to locate the file you want to submit, then click “submit”.  You will then be asked to confirm that you want to submit by clicking the “Yes, submit” button.

You are only allowed to submit the report once, so please ensure that you submit the correct one.  Only your report should be submitted, do not submit the relevant annual report.

The submission deadline is 7th August 2023, at 12 noon. Standard penalties apply for late submission.

The maximum length of the report is 1,500 words. Frontpage, contents page and references do not count within the word limit.  The standard management school penalties are applied for exceeding this word count. There is no acceptable margin above this limit.

This overall assignment will contribute 20% of the available marks on this module.

The university's rules and penalties with respect to plagiarism apply to all assessed work.  The work must be entirely your own. Referencing of sources of information used must be made in a bibliography, including detailed website addresses.

2. Guidance Notes

Obtain a copy of the latest available published annual report, via ORBIS or Bloomberg, and relevant ratios, again via ORBIS or Bloomberg, of one of the companies identified by the CEO in the attachment to the e-mail.

Your answer should be based on the information available in the company's annual report, and any other relevant financial information (e.g. in the company’s website, share prices, FT.com (and other media commentaries) or the relevant stock exchange website).

Careful  selection  of  a  suitable  company  plays  an  important  part  of  this  assignment. Information on companies can be obtained from lots of places, including;

•     the company’s website

•     the relevant stock exchange website

•     the international stock exchange official yearbook (the library has a copy)

•     FT.com

In assessing the performance of the company, the use of ratios will be very useful but the key to scoring well in the assessment is to give a full explanation of why the ratio has moved.

Explaining what has occurred (e.g. gross profit margins have increased by 10%) is not enough. You should try to attempt to explain how changes have occurred, why changes  happened, and when during  the  year.  Also  ask  the so-what question  –  i.e. can  we  consider  future outcomes and state possible consequences arising from any changes.

Try to understand the business strategy (e.g. read the business review, financial review or chief executive summary) not just crunch numbers.

Be imaginative and do not just use ratios taken from ORBIS/Bloomberg. Think what is relevant to your chosen company. For example, for a retail business the revenue per square metre of floor space could be important as more sales may have only been generated by buying new stores.  For an airline it might be seat utilisation. Industry data will also be relevant.

Use tables, graphs and diagrams, where appropriate, to improve presentation marks.  Please ensure that all tables, graphs and diagrams are fully numbered and labelled.

3. Marking Criteria

The table below illustrates the criteria that will be used when marking your assessment and

the percentage weighting given to each element: