Interpretation of companies’ financial statements
Assignment questions
Your team is a group of investment advisers and you have been provided with
the most recent published annual reports and financial statements for two
different companies.
Laura Ashley Holdings plc; and
Hugo Boss AG
Copies of these reports can be found on the module Moodle page.
Based on the content of the financial statements and other relevant
information in the latest annual reports of both companies, you are required
to;
a) Use a range of relevant techniques to critically evaluate and compare
the financial performance of the two companies. Your analysis should;
1. Provide a brief background for each company
2. Make use of vertical and horizontal analysis to analyse the
performance of the company
3. Use a range of financial ratios to critically evaluate each
company’s
i. Profitability
ii. Liquidity position
iii. Efficiency
iv. Gearing
v. Investment situation (whether it is attractive to investors)
(Include all calculations, workings and formulae used in an
appendix to your report)
4. Using all the information at your disposal, critically evaluate the
financial performance of each company
b) Based on your analysis, recommend and explain which company is
more attractive to invest in from a financial perspective
c) Outline any limitations of your analysis