Accounting & Finance ASSESSMENT - Case Study Centrica PLC
Individual assessment
You are to write a 2500 word report as though you were a consultant writing to the board of directors of a company considering embarking on a major new joint venture with Centrica. The board want to assess Centrica's performance over the past 3 years. Your report should cover the following:
(i) Background - Discuss the key opportunities and major problems that management of Centrica have had to face over the past three years.
(ii) Evaluate the financial statements and other financial information relating to Centrica to assess how the company has performed over the past three years taking into account any problems or opportunities identified in (i). This should be an interpretation of the ratios NOT the calculation of the ratios.
(iii) Discuss how the Centrica's performance over the past three years compares with its main competitors. Your answer should include some discussion as to whether the competitors identified faced the same opportunities and problems that Centrica faced. How were these reflected in the competitor's financial statements?
(iv) Conclusion - Discuss whether in your opinion the company the board should back a new joint venture with this company. Your answer should include some discussion as to the effectiveness of Centrica in dealing with the opportunities and problems they faced over the past three years.
Students are required to write a report, ON A STRICTLY INDIVIDUAL BASIS. This means no copying from other students or other published sources. The work that you submit through BREO will be plagiarism tested for copying from each other and from the internet and published sources.
Your Evaluation of the Financial Statements should include the following table:
|
2016
|
2015
|
2014
|
Gross profit margin
|
|
|
|
Operating Profit Margin
|
|
|
|
Net Profit Margin
|
|
|
|
|
|
|
|
Current ratio
|
|
|
|
Acid test ratio
|
|
|
|
Stock days
|
|
|
|
Debtor days
|
|
|
|
Creditor days
|
|
|
|
|
|
|
|
Return on Assets
|
|
|
|
Return on Capital Employed
|
|
|
|
Gearing
|
|
|
|
Interest coverage
|
|
|
|
|
|
|
|
P/E Ratio
|
|
|
|
Earnings per Share
|
|
|
|