The Financial & Organization Performance With Budgeting Techniques & Ratio Analysis - Alphabet Holdings Case Study - Finance Assignment Help

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Assignment Task -                 
 

Learning outcomes and pass attainment level:

  • Evaluate the financial performance of an organization using financial and narrative information prepared under International GAAP

  • Apply appropriate costing and budgeting techniques to a specific scenario.

  • Evaluate alternate investment projects using appropriate techniques.

  • Evaluate alternative methods of corporate financing on financial performance.

  • Demonstrate a level of competence in the preparation and analysis of financial information

 

Question 1

The scenario

Alphabet Holdings Plc wants to diversify its portfolio of investments in subsidiary companies. It already owns a haulage company with a fleet of 150 heavy goods vehicles (HGV), a chain of fast-food restaurants, and 6 hotels, one of which is making a loss. They have identified 2 possible acquisition targets and want you to complete the ratio analysis, evaluate the findings, and advise them on which one they should acquire and why.

They have identified 2 young companies that are both 2 years old and growing rapidly. They are very different in what they do: ABC Ltd is based in 2 leased converted hotels and provides care services for young people unable to be cared for in the foster system. Alphabet Holdings Plc are looking into the possibility of converting their failing hotel into a provider of care services and ABC is looking for another property; XYZ Ltd has a large yard and caters for the storage and repair of up to 50 commercial vehicles at one time, and has the potential for more space as it is based in a large empty industrial area. XYZ is looking for a contract with a fleet operator to stabilize their income and growth. 

 

Both target companies are 2 years old and here are extracts from their financial statements:

 

The ratio analysis below is in 4 categories (Profitability, Liquidity, Management Efficiency, and Gearing), but is incomplete:

 

Requirements

  •  Prepare a business report, maximum 2 pages long (+/- 10%), to the board of directors of Alphabet Holdings Plc using ratio analysis. Your 400-word report must evaluate the financial statements and ratio analysis and make a convincing argument for investment in one of the two target companies. Your analysis, conclusions, and recommendations should be supported with academic references.
  •  Critically evaluate the working capital management (WCM) of both companies and draw conclusions on which is stronger.
  •  What sources of finance should Alphabet Holdings Plc consider to finance the investment in either ABC Ltd or XYZ Ltd? Critically evaluate the options you have identified and make a well-reasoned, and well-referenced, conclusion and recommendation. 

 

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