Introduction
The purpose of the assignment is for you to act in an advisory capacity to your client, an institutional investor who is planning to invest £500,000 in a listed company’s shares. You are to produce a report for your client to assist them in their decision whether to invest in the chosen company. This requires you to research the company, discuss its performance and position and whether you consider it a good investment opportunity for your client. You are also required to consider the current environment for the relevant industry, the company’s strategic growth prospects, challenges and risks. In your report, you must advise the client as to whether they should invest in the company giving explicit reasons for your recommendation.
Requirement
The report should include:
- (a) a detailed analysis of and commentary on the company’s performance and position highlighting the areas pertinent to your client
- (b) a review of the company’s objectives, strategies and principal risks and how they may impact on the investment decision.
- (c) an in-depth analysis of the company’s performance prospects based on your review of both the financial and narrative reporting in the annual report and the current economic and industry environment.
- (d) A commentary on the extent to which environmental, social and governance (ESG) matters are embedded in the company’s reporting in a transparent manner. Highlight areas which may be important to your client’s decision to invest.
- (e) An overall recommendation to your client as to whether they should invest in the company, giving reasons for your advice.
Report content
- he report is in the form of a detailed analysis of the financial performance and position of the company that incorporates the following:
(a) Clear identification and use of the important ratios for an institutional investor.
(b) Understanding and discussion of the company’s current strategies, plans and risks and how they may affect the decision to invest.
- An analysis of the company’s performance prospects based on your review of the narrative reporting in the annual report and the current economic and industry environment.
(a) Displays knowledge of the business and industry environment vis a vis the company
(b) Provides forward looking financials (e.g., forecast/projections) based on available information.
(c) Knowledge of ESG requirements relevant in reporting jurisdiction as well as current developments in the industry. Critical awareness of importance of ESG reporting and their impact on investment decisions.
- Clarity and persuasiveness of overall recommendations to the client.
- Report presentation and referencing