ASSESSMENT 1

Assessment 1: Fundamentals of Finance

Assessment 1: Fundamentals of Finance

I. Company Summary

ITV plc

ITV plc (ITV or "the company") is the largest commercial television network in the UK. The company operates a family of channels, delivers content across multiple platforms and produces and sells programmes and formats in the UK and worldwide. ITV is headquartered in London, the UK and employed 3,958 people as of December 31, 2011. The company recorded revenues of £2,140 million ($3,432.3 million) during the financial year ended December 2011 (FY2011), an increase of 3.7% over FY2010. The operating profit of the company was £404 million ($648 million) in FY2011, an increase of 11% over FY2010. Its net profit was £247 million ($396.2 million) in FY2011, a decrease of 8.2% compared to FY2010 (“ITV annual report”, www.itvplc.com).

Business Description

ITV plc (ITV or "the company") is engaged in broadcasting, TV programming production, advertising and online businesses. The company has presence in the UK, the US, Germany, Australia, France and Sweden. The company operates through two business divisions: broadcasting and online and ITV studios. ITV's broadcasting and online business operates family of channels including ITV1, ITV2, ITV3, ITV4 and CITV, and their HD and +1 equivalents, which are broadcasted free-to-air on Freeview, digital satellite (Sky/Freesat) and cable, and are funded by advertising and sponsorship. ITV's broadcast assets also include the multiplex operator SDN which operates one of the six digital terrestrial multiplex licenses in the UK. This division includes commissioning and scheduling programmes on the ITV channels, marketing and programme publicity and online rights exploitation. Apart from advertising revenues and sponsorship revenues the company's channels are funded by interactive revenues such as viewer competitions and voting. The company's online business includes the itv.com website and video on demand services on 'closed' platforms (“ITV annual report”, www.itvplc.com). The website provides ITV clips and programming to internet users via ITV Player, funded by online advertising and sponsorship.

WPP Plc

WPP plc (WPP or "the group") is a communications services organization, which manages a portfolio of companies in various disciplines including advertising and media investment management; consumer insight; public relations (PR) and public affairs; and branding, and identity, healthcare and specialist communications. The group primarily operates in the UK. It is headquartered in Dublin, Ireland and employed approximately 162,000 people, including associates. The group recorded revenues of £10,021.8 million (approximately $16,085 million) during the fiscal year ended December 2011 (FY2011), an increase of 7.4% over FY2010. The operating profit of the group was £1,192.2 million (approximately $1,913.5 million) during FY2011, an increase of 22.5% over FY2010. The net profit was £840.1 million (approximately $1,348.4 million) in FY2011, an increase of 43.4% over FY2010 (“WPP annual report”, http://www.wpp.com/annualreports/2011/index.html).

Business Description

WPP is a global communication services conglomerate. The group performs its business operations through many subsidiaries and affiliates, offering a range of media and marketing services. The group has 2,500 offices in 107 countries across North America, South America, Europe, Middle East, Africa and Asia Pacific. It conducts its operations through more than 150 ...