Choose any three companies working in the same industry/sector and listed in the
ID: 3305851 • Letter: C
Question
Choose any three companies working in the same industry/sector and listed in the UAE stock market. Download the financial statements of the three selected companies for the years 2014 -2015 and complete the following tasks for both the companies over the period specified:
1. Prepare a common-size and common-base year income statement and balance sheet and comment on them. The common –size should be for the year 2015.
2. Using ratio analysis, compare and evaluate the financial performance of both the companies.
3. Analyze and compare the capital structure of both the companies and give your observations on the impact of the capital structure on the profitability and liquidity (return and risk) of the three companies.
Notes:
a. This is a group project work (each group should be of 3 students). You need to seek my approval before you start.
b. Submit the list on names of your group with all group members’ signatures a long with the names of companies you want to study before you start.
c. The companies chosen by any group should not be used by any other group.
d. For ease of comparison, present all your analysis in tables.
e. Write notes on how you made your calculations.
f. Your report should have an introduction, tables of analysis, comments, and a conclusion.
g. Attach the financial statements of the chosen companies.
h. Prepar e a power point presentation of your work (6-12 slides).
i. Assessment scope LO 3 and LO 4.
please help me to find first of all three companies working in the same sector like any three producing companies like cement companies in the UAE find
statements for three ompaniesn and download the balance sheet and income statement for two years 2014 and 2015 and please help me to find answer for my group project thank u
the professor wants three companies for cement companies in the UAE plz
plz help me to make the calculations thanks a lot
Explanation / Answer
Hi
You can take three companies working in the insurance sector for your project. I will take Oman Insurance company (OIC),Orient Insurance PJSC (ORIENT) and Islamic Arab Insurance Company (SALAMA).
Next for downloading the financial statements you can go to their respective company sites and look under investor relations sections. A simple google search with company name with financial statements would also work. Only problem is that the information is present in image form and hence you cant directly copy paste the information. You will have to type it in.
For preparing common size for year 2015, you need to divide each line item in the p&l with the net sales number in 2015. Similarly, for balance sheet you need to divide by total assets in 2015.
As an example I am pasting below the common sized balance sheet for OIC. The interesting point to be noted here is that the company had no borrowings in 2014, but had to borrow in 2015, though the PPE went down in 2015. One can further investigate where the new borrowings were used up. Further, Intangibles went up substantially.
Common size of P&L for OIC:
Ratio analysis for for OIC: One can carry out similar ratio analysis for other two companies and compare amongst them to figure out which has improving or best ratios. Thanks!
Actuals Common Sized Growth 2014 2015 2014 2015 PPE 38.823 32.72 0.63% 0.53% -15.72% Intangibles 39.913 73.023 0.65% 1.18% 82.96% Investment prop 474.315 513.725 7.72% 8.34% 8.31% Goodwill 26.588 18.15 0.43% 0.29% -31.74% DTA 16.364 16.769 0.27% 0.27% 2.47% FI 1795.689 1738.188 29.23% 28.20% -3.20% Statutary Deposit 23.538 23.538 0.38% 0.38% 0.00% Reinsurance contract assets 1781.498 1791.699 29.00% 29.07% 0.57% Deferred acquisition costs 125.196 117.887 2.04% 1.91% -5.84% Insurance receivables 1194.962 1328.605 19.45% 21.56% 11.18% Prepayments and other receivables 109.284 116.972 1.78% 1.90% 7.03% Bank balances and cash 517.243 392.038 8.42% 6.36% -24.21% Total Assets 6143.413 6163.314 100.00% 100.00% 0.32% Equity and Liab. Equity Share capital 461.872 461.872 7.52% 7.49% 0.00% Reserves 1433.692 1456.956 23.34% 23.64% 1.62% Cumulative changes in fair value of securities -299.922 -387.941 -4.88% -6.29% 29.35% Foreign currency translation reserve -3.904 -24.158 -0.06% -0.39% 518.80% Retained earnings 376.127 376.362 6.12% 6.11% 0.06% Equity attributable to owners 1967.865 1883.091 32.03% 30.55% -4.31% NCI 35.752 31.777 0.58% 0.52% -11.12% Total Equity 2003.617 1914.868 32.61% 31.07% -4.43% Liabilities Insurance contract and lia 3449.288 3385.753 56.15% 54.93% -1.84% End of service benefits 31.545 30.192 0.51% 0.49% -4.29% Bank borrowings 0 33.489 0.00% 0.54% NA Deferred Commission income 96.407 93.532 1.57% 1.52% -2.98% Re-insurance deposits retained 79.052 74.885 1.29% 1.22% -5.27% Insurance payables 396.544 549.083 6.45% 8.91% 38.47% Other payables 86.96 81.512 1.42% 1.32% -6.26% Total Liab 4139.796 4248.446 67.39% 68.93% 2.62% Total Liab and equity 6143.413 6163.314 100.00% 100.00% 0.32%