ABC PLC

ABC Plc Financial Analysis

[Name of the institute]

ABC Plc Financial Analysis

Introduction

ABC plc is a large multinational company, currently operating in many international environments including the US, UK and Japan. It is currently opting to invest in a small developing country in which it just discovered an oil resource. However, due to the world wide economic recession and the economic downturn faced in almost all developed and developing country has caused the company to perform very poorly in the US, and perform just less than poor in Japan. Compared to its performance in the US and Japan, it has done quite well in UK. With the given data, we will be analyzing the company's performance in these three countries and than will recommend which option is better: to cease their activities in these states or to improve. Also will be provided are the recommendation and ways to improve the poor performance in these three countries. The company additionally wishes to start a new investment and project in a small developing country. We will be analysing the investment plan through various techniques to suggest the ABC Plc's Board of Directors on their capital investment decision.

The study of financial performance of ABC Plc also focuses on the analysis of four years investment programme, which will be analyzed through net present value, payback period and internal rate of return that are the factors which help ABC Plc in investing in the project.

Part I: PESTLE Analysis

PESTLE analysis is a valuable tool that helps in understanding the factors that affect an industry. We will be carrying out the PESTLE analysis to obtain a greater view of the weak conditions of the ABC Plc in USA, and to some extent Japan, as compared to their highly appreciable performance in the UK.

Political

Political decisions that a government takes will most definitely affect the oil and gas company. The oil and gas companies are the most important parts of an economy, as they provide the means and support for the transportation process of other various industries. The most effective one of such decisions are the decisions taken on to support the climate. The oil and gas companies pay little attention on the climate during their process of production. The government may pass on much legislation in order to minimise production or to allow a specific level of pollution allowed to each firm. This kind of a decision may effect the operations of ABC Plc. For example UK has very strict environmental management. This may effect the output of the company and thus reduce the total revenue being generates.

Economical

Economic factors have a very huge impact on the firm. Also, the activities of the oil and gas companies have a huge impact on the economy in terms of employment levels. The oil and gas companies alone provide for many jobs and the employment level boosts when these companies invest in new drilling and refining activities. Besides, the interest rates also have a huge impact on firms. Higher interest rates will discourage ...