International Finance Assignment - Barclay

INTERNATIONAL FINANCE

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................5
b) Calculation of different valuation methods.............................................................................7
c)Instances that shows variations.................................................................................................8
d) Risk exposures faces by FTSE 100.........................................................................................8
e) Circumstances that surrounds the acquisition..........................................................................9
TASK 3..........................................................................................................................................10
Recommendations......................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
The role of finance has increases as the external complexities has enhances the scope of
financial aspects on a global level. Barclay has been selected for this project report as this
focuses on taking new investment by taking FTSE component. The financial performance of this
entity will be ascertained by using comparative ratio analysis.
TASK 1
Barclay is a multinational brand which deals in wide variety of services all across the
world in order to cater the needs and expectations of their desired customers. This global brand
deals in the current business of this particular organization is the banking sector. The banking
sector of an organization cater all the needs and expectations of their client by using technology
as one of the important factor (Frieden, 2015). The innovation is applied by this sector in
changing their traditional banking practices by adding the technological factor as one of the
important element in their business operations.
Ratios Formula
2015(GBP
million)
Profitability Ratios
Net sales 17201
Gross profit 12558
Net profit 623
Operating profit 4777
Gross profit ratio GP/ net sales * 100 73.01%
Net profit ratio Net profit / net sales * 100 4.96%
Operating profit ratio Operating profit / net sales*100 27.77%
Liquidity ratios
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Current assets 623291
Current liabilities 502089
Inventory 0
Prepaid expenses 0
Current ratio current assets / current liabilities 1.24
Quick ratio
Current assets – (stock + prepaid expenses) /
current liabilities 1.24
Interpretations
Profitability ratios-The ratios calculated under this particular sector is beneficial for an entity as
it helps in determining the profitability of the business. The profit of an entity can used to
strengthen the overall entity (Bertoni and Lugo, 2013). This particular category has further
bifurcated into three segments which are given as below:
 Gross profit- The raw amount of figure that creates additional value for an enterprise as
it obtained by deducting cost of sales from the sales and the revenue earned by an
enterprise. The higher percentage of gross profit shows that the burden of cost of sales is
less which increases the overall gross profit.
 Operating profit- The gross profit can be reduces by deducting all kinds of operating
expenses from the main figure which forms one of the basis in order to calculate the
operating profit. The decrease in the percentage of the operating profit ratio more than
half of the gross profit ratio has revealed the deficiency of an enterprise. An entity needs
to reduce their operating expenses to increase their overall operating profit.
 Net profit- In the corporate world the full fledged amount which is taken into
consideration in ascertaining the profitability of the business (Baylis, Smith and Owen,
2013). This particular factor has considered the taxation amount which reveals the true
performance of an entity. The above decreased ratio has determined the actual value
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