International Financial Management - PDF
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Added on 2019-12-28
International Financial Management - PDF
Added on 2019-12-28
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International Finance
Table of ContentsINTRODUCTION ...............................................................................................................................3TASK 1 ................................................................................................................................................3Evaluating the financial position and performance of FTSE 100 through ratio analysis ...............3TASK 2.................................................................................................................................................5b)Different valuation methods.........................................................................................................8c)How valuation method help an entity...........................................................................................8d)Risk exposures..............................................................................................................................9e)Situations of acquisition...............................................................................................................9TASK 3...............................................................................................................................................10Giving recommendation to Barclays bank on the basis of the financial position of Admiral insurance group Plc .......................................................................................................................10CONCLUSION .................................................................................................................................10REFERENCES...................................................................................................................................12
INTRODUCTION International finance is concerned with the monetary transactions which take place betweentwo or more countries. It involves high risk in relation to the financial management, foreign directinvestment and exchange risk. In this, transaction and management of finance at international levelis highly difficult task. In this, IMF and IFC plays a vital role in monitoring the activities that takeplace at international level. The present report is based on the case of Barclays bank which isplanning to acquire the small sized firm such as Admirak insurance group. In this, report will shedlight on the financial health and performance of Admiral group with the aim to make suitabledecision regarding acquisition. In this, report will also present the aspects which business need tofollow for the improvement purpose. TASK 1 Evaluating the financial position and performance of FTSE 100 through ratio analysis Financial performance analysis of Barclays bank and Admiral insurance group for the year of 2015are: RatiosFormulaAdmiralinsurance groupPlc Profitability RatiosNet sales17201904Gross profit12558525Net profit 623300Operating profit4777380Gross profit ratio GP/ net sales * 10073.01%58.08%Net profit ratio Net profit / net sales * 1004.96%33.19%Operating profit ratioOperating profit / net sales*10027.77%42.04%Liquidity ratios
Current ratio current assets / current liabilities 1.240.46Quick ratioCurrent assets – (stock + prepaidexpenses) / current liabilities1.240.46Solvency ratio Debt-equity ratio Debt / equity0.36-Efficiency ratio Fixed asset turnover 7.3526.93Asset turnover ratio 0.020.22Profitability ratios:Gross profit ratio: In the period of 2015, GP margin of Barclays bank was 73.01%. On theother side, in the same period, GP ratio of the insurance company in the similar period was58.08%. Thus, it can be said due to the high direct expenditure approximately 42%insurance company failed to generate enough gross profit margin. Net profit ratio: This measure presents the company's performance in relation to managingthe indirect expenditure level. Moreover, NP ratio presents the amount of profit which isavailable to the equity shareholders. Hence, in the accounting year 2015, NP ratio ofAdmiral group was 33.19%. It entails that insurance company has managed its indirectexpenditure level more effectively and efficiently (Frieden, 2015). Thus, by consideringsuch aspect it can be said that strategic and policy framework employed by the firm issound. Liquidity ratios: It indicates the company's ability in relation to meeting the obligations fromcurrent assets. Hence, through the means of current and quick ratio one can assess the liquidityposition of the firm. Quick and current ratio: From the financial statement analysis it has been assessed that in2015 quick as well as current ratio of Admiral Group Plc was .46 (Financial reports of Admiralgroup, 2015). This measure reflects that company does not have enough amount of assets to meetthe liabilities. Moreover, according to the ideal ratio company must have 2 current assets for
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