ANALYSIS

Analysis of the Annual Report Accounts

Table of Content

1: INTRODUCTION3

Learning Outcomes from the Reflective Journal3

What did I learn from producing the coursework?3

2. What problems did I encounter when completing the assignment (if any) ?4

3. What would I do differently next time and what would have enabled me to do a better job?4

4. When completing the assignment, which learning outcomes did I find easiest / perform best at?5

5. When completing the assignment, which learning outcomes did I find most difficult / perform worst at ? (you may give reasons for this)5

6. Do I honestly believe that I have performed to the best of my ability?5

1.1 Introduction to IMI plc company6

2: EVALUATION AND ANALYSIS OF LATEST ANNUAL REPORT6

2.1: Five Year Business Overview7

2.2: Review of latest income sheet7

?Breakdown of Return on Equity7

?Return on Capital Employed8

Earnings in perspective9

Profitability and efficiency10

2.3: Review of latest balance sheet13

2.4 Review of latest cash flow statement14

2.5: Ratio Analysis17

2.5.1: Liquidity measurement ratios18

2.5.2: Profitability measurement ratios19

2.5.3 Assets management and efficiency ratios20

2.5.4 Risk analysis21

3: Conclusion and Suggestions23

QUESTION 224

Part A: Cash Management24

PART B: INVESTMENT APPRAISAL25

Traditional Methods25

Payback:25

Payback with uneven cash flows:27

Arguments In Favor Of Payback29

Arguments Against Payback29

Payback summary29

Average Rate of Return30

Advantages of ARR31

Arguments against ARR31

Discounted Cash Flow Methods32

Net Present Value32

Using Present Value Tables33

NPV Illustration For Grocery retailer34

The Internal Rate of Return (IRR):35

Making the investment decision35

Illustration of NPV & IRR36

REFERENCES39

1: Introduction

Chemring Group (LSE: CHG) is a leading British-based producer of countermeasures for protecting air, sea and land-based platforms from threats. It is headquartered in Fareham and is the largest such business in the world It is a constituent of the FTSE 250 Index. The business was formed as The British, Foreign & Colonial Automatic Light Company Limited in 1905 to make timers for gas street lighting. In the 1950's the company diversified into silver coated filaments for lighting. It was subsequently established that such filaments had an alterntive use as chaff for radar decoy purposes. The company was first listed on the London Stock Exchange in 1974. The Group is organised into two divisions:

* Countermeasures - expendable decoys

* Energetics - pyrotechnics

Learning Outcomes from the Reflective Journal

What did I learn from producing the coursework?

I have learnt that Countermeasures produce expendable decoy countermeasures for protecting air, sea and land platforms against guided missile threats. Products include flares, chaff, special materials and naval decoys. The Group operates in the United Kingdom, the United States of America, Germany, Australia, Spain, Italy and Norway. During 2007, the Group acquired the entire share capital of Simmel Difesa S.p.A.

2. What problems did I encounter when completing the assignment (if any) ?

I had problems finding and overviewing the financial statements which are an important tool in determining the overall performance of a company. Projected financial statements have the balance sheet, income statement and cash flow statements to indicate the company performance. Preparing projected financial statements can be very time consuming and it requires a careful analysis of the company's past and present financial health. Projected financial statements project or forecast a company's performance in the near ...