Fundamentals of Modern Financial Management Paper

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You have  recently graduated from Newcastle Business School and secured a job in the treasury department of Moon-rock Foundation, London – a charity organization with business interests in sales and distribution of goods and services across the world. Through the business interests it funds philanthropic activities in both the developed and developing worlds. Therefore liquidity, profitability, and minimization of financial risks are part of the strategic objectives of the organization.
Note: The organization is considering possible acquisition of foreign supermarket chains as well as evaluates the financial management practices of such companies for possible lessons.
As your first project; with the aid of financial data browsing/downloading tools such as Bloomberg Trading Room system, Morningstar, FAME, Reuters investigate and write an action driven report based on ONE of the following supermarket chain in comparison with at least two real world companies in the same industry:
Morrison Supermarket Plc.
Sheng Siong Ltd.
1. Research the financial and non-financial performance of either of the companies for the financial period 2010 – 2014 and :
a) Evaluate the  working capital management strategy and effectiveness of the company in 2014.
b) Assess the credit worthiness and investment potential of the company as at 2014. (30 marks)

2. Explain the functions of credit control systems in the working capital management of supermarket chains like Morrison Supermarket Plc or Sheng Siong Ltd and present research informed recommendations for improved credit control in the company you are reporting on. (15 marks)

3. Evaluate the strengths and weaknesses of two prominent sources of finance open to the company and advise on the financing options for a proposal to open two new supermarkets. This includes the construction of the warehouse and retail building, and funding of inventory, 18 photocopiers, and 5 distribution trailers (vehicles). (15 marks)
Total = 60%

4. Dividend Policy
Critically appraise how companies set their dividend policies, and explain the factors that a company will consider in setting its dividend policy and in determining the level of dividends to be paid.
You should support your arguments by reference to Morrison Supermarket Plc. (Or Sheng Siong Ltd ) and at least two other real world companies for comparison purpose.
Your comments should incorporate both theoretical/academic arguments and real world practices. You should also provide a brief introduction on the key issues and a conclusion consistent to your discussion. (25 marks)

5. Cost of Capital
Giving numerical examples explain Capital Assets Pricing (CAPM) and Dividend Discounting (DDM) models of calculating cost of equity. Your discussions should highlight the theories behind the models and you should comment on how the models can be useful to investors of Morrison Supermarket Plc. or Sheng Siong Ltd. (15 marks)
Total = 100%

Pages: 13, double spaced

Citation: APA

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