Report on Financial Management Project

Running Head: Financial Management
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Project Report: Financial Management

Financial Management
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Contents
Introduction.......................................................................................................................3
National Takaful...............................................................................................................3
Marshall Motor holdings plc............................................................................................3
Capital budgeting..............................................................................................................3
Financial analysis and forecasting....................................................................................3
Stocks and bonds decision................................................................................................4
Capital structure................................................................................................................4
Cost of capital...................................................................................................................5
Corporate governance and agency problem decision.......................................................6
Conclusion........................................................................................................................6
References.........................................................................................................................7
Appendix...........................................................................................................................8

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Introduction:
This report has been prepared to analyze the financial management of the UAE
market. For analyzing the financial performance of the UAE market, an international
company as well as a UAE company has been analyzed and the performance of the UAE
market has been analyzed through comparing both the companies. This report would focus
over various financial analyses such as capital budgeting, capital structure, stock and bond
decision and cost of capital.
National Takaful:
National Takaful is an UAE company which is operating its business into ABU
DHABI. This company is operating its business through 6 branches in ABU DHABI market;
the main business of this company is to offer the health insurance to its clients. This company
came into existence in 2011 and currently it is only providing its services into domestic
market (Home, 2017).
Marshall Motor holdings plc:
Marshall Motor Holdings plc is an England company which is operating its business
into international market. This company has registered its stock into London stock exchange;
the main business of this company is to offer new automobile products and services. This
company came into existence in 20th century and currently it has diversified its market into
25 countries to enhance the market share of the company (London Stock exchange, 2017).
Capital budgeting:
Capital budgeting is a process which is used by the companies to analyze various
investment opportunities on the basis of the company’s requirement. Capital budgeting
techniques of both the companies would be affected through various variables which are
NPV rate, inflows and size of the investment opportunity (Gurufocus, 2017). NPV rate of
both the companies could not be similar; the size of investment would be higher in case of
Marshall.
Financial analysis and forecasting:
Further, financial analysis and forecasting over both the companies have been done to
identify the financial strength and position. For this study, ratio analysis has been done over

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both the companies to evaluate the liquidity position, profitability position, financial structure
position and efficiency position. Through the 5 year analysis over both the companies, it has
been found that the profitability position of Marshall is much stronger than the NATIONAL
TAKAFUFL PLC (Morningstar, 2017). Through the further analysis, it has been found that
the NATIONAL TAKAFUL is required to manage the liquid position in the industry as well
as in the market. The liquid position of the company depict that company is not even able to
pay half of the current debts.
More, it has been investigated that the efficiency position of the company is nil which
depict that the company do not use the receivable and payable policies to manage the cash.
But it is required for every organization to manage the level so that the sales of the company
could be enhanced (Morningstar, 2017). More, the debt structure of the comapny depict that
the debt equity and debt asset structure of NATIONAL TAKAFUL is quite competitive.
Company has managed the debt and equity in such a manner that return and risk both the
factors of the company could be controlled.
Stocks and bonds decision:
More, the study has been done over the bond and stock decision of the company.
Through this analysis, it has been found that both the companies had not issued any bonds to
raise the funds. Still, the risk free rate off both the companies is quite different to each other.
The risk free rate of London stock exchange is 2.77% whereas the risk free arte of ABU
DHABI is 3%. This depict that the risk free rate of Abu Dhabi market is much better than
international market. More, it has also been found that the stock position of Marshall is better
than NATIONAL TAKAFUL due to various strategies and better position in the international
market (Guru focus, 2017).
Capital structure:
Capitals structure of a company depict about the sources through which the comapny
has raised long term funds. Capital structure analysis depicts about the level of the risk and
return in an organization. Through this analysis, it has been found that capital structure of
NATIONAL TAKAFUL is as follows:
Price Cost
Debt 243766000 0.035
Equity 79175000 0.05038