Introduction
In the second half of this Financial Decision Making module, you have studied many aspects of how organisations manage their financial decision making. You have looked at risk, capital structures, sources of finance and decisions relating to strategic investment. You have also studied interpretation of financial statements and accounting information systems. The aim of this End of Module Assignment is to synthesise these topics together with the opportunity for you to evaluate your organisation or one you are familiar with or have an interest in. If your own organisation does not appear to be suitable, there is a wide range of organisations that have information in the public domain, you could take a look at the listed companies in the FTSE 100 or FTSE 250 or a similar market in your own country. Your should seek approval from your tutor for your choice of a suitable organisation and you should avoid banks and other financial institutions, as these have very different capital structure to a service, retail or manufacturing organisation.
Please select an organisation of your choice in order to answer all parts of the assignment below:
Part a
Critically evaluate the capital structure of your chosen organisation and discuss whether this capital structure is aligned to the organisation’s strategic goals. For example, does your organisation have a greater degree of debt or equity (or its equivalent in the case of not for profit or
public sector organisations) and how does this impact upon the gearing of the organisation? You should also consider how the organisation views risk and return (or its equivalent in the case of not for profit or public sector organisations).
Part b
Critically assess the organisation’s financial performance and its overall approach to managing stakeholders expectations. This should include some interpretation of the financial statements and any other information you consider relevant.
Part c
Discuss how the issues you have explained in part a) and b) above might be addressed in terms of improvements or recommendations. How might your recommendations result in more effective financial decision making for your organisation?