Individual Case Study (1750 words, 50% of assessment weighting)
For this individual case study, you are required to select the company that you worked together as a group in Assignment 1.
The COVID-19 pandemic has affected the businesses and economy dramatically. The Board of Directors is currently considering to diversify its business risk and plan to make some investments that would help the business sustain and grow in the long term. Assume you were the Chief Financial Officer of the company/organisation, you were tasked to produce a report to the Board of Directors that identifies a potential investment project to help the business grow in the post COVID-19 environment.
Write a professional report to the Board of Directors. In your report, you shall propose a investment project, considering the risk and return, evaluating the investment opportunity and analysing its potential impact on the company/organisation with consideration of its financial performance before you make recommendation, including the following discussions:
- Executive Summary (250 words)
• Introduction of the company
• Purpose of the report
• Conclusion from your analysis and discussion
• Recommendations on how the company should proceed with the investment
- Motivation of the proposed investment (200-300 words)
• Propose an investment that will help the company to sustain and grow in the long-term.
Make sure the investment is relatable to the company. Incorporate the Why, How and What model:
o Why? Purpose:
▪ What is the real problem (caused from COVID-19 to the specific company)?
▪ Why is it important to resolve the problem?
o How? Process:
▪ How is the problem being caused?
▪ How must causal drivers of the problem change?
o What? Proposition:
▪ What capabilities enable necessary changes in drivers?
▪ What specific deliverables provide the capabilities?
- Conduct investment appraisal using both quantitative and qualitative information (500- 600 words)
• Conduct a Payback analysis (estimate the figures)
• Conduct a Net Present Value (NPV) and Internal Rate of Return (IRR) using the template shown in your lecture and located in Topic 10 (estimate the figures)
• Conduct a PESTEL and SWOT analysis for the investment
- Critically discuss the risk and return and its potential impact on its financial performance (500-600 words)
• Conduct a Sensitivity analysis for the risk and return (use the template in Topic 10)
• Focus the risk on the following variables: Cost of capital, Cost and Benefits.
• Focus the return on NPV
• Discuss the risk and return and also comment on the Discounted Payback Period
• Link the discussion on the risk and return to potential impacts on the company’s financial performance (financial ratios)
Data can be assessed via FAME for publicly traded UK company, stock exchange, Yahoo Finance, as well as the annual report and official website. If you choose a private company, please ensure you can assess the data for your analysis.
Analysis, links, examples and applications of the concepts and discussion should be made to current businesses and situations to show understanding of this module and its contents.
Reference should follow Harvard Referencing Guide. Please do not copy and paste other resources in your report. The appendices of the report shall include relevant supporting
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