Financial Analysis

3.3 Financial Analysis individual assignment brief

This is an activity on interpretation of financial information.

At the end of this activity you should be able to:-
  * Analyse simple financial statements
  * Prepare a report presenting your analysis using tabular and graphical means where useful
  * Make recommendations to a client based on the available evidence

You will work on this task in your groups during the pod session in Phase 3 Week 3, but you are required to produce an individual report, outside of this pod session. You may use group calculated data, charts and diagrams, but you MUST write and present the report on your own, using your own words.

The Problem

The Smithsons have concluded that, whilst the arrangement with the Poissons is a fruitful one, they would really prefer to have full control over the business. The Poissons are not prepared to sell the complex, and the Smithsons have been looking for properties or businesses that they might seek to purchase, as a means to expansion. With the idea that they night move to France and work as managers of a holiday complex or even a hotel, they have been looking at businesses set away from the coast, in quieter settings, and likely to be attractive to a more mature and probably more easily managed clientele.

One such business has become available that interests them – The Chateau Redoutable Hotel is set in its own grounds, in attractive countryside near the historic town of Quimper. The chateau has been converted into an apartment hotel, with 20 largely identical units. The company that owns the chateau is asking   €3.0m for the sale of the business. The latest financial accounts for the establishment are available and Mike has been asked to provide some analysis.

Write a 1500 word report to the Smithsons, using your analysis of the figures to answer the following questions.
  1) What do the figures say about the proposed purchase in terms of current profitability,...