Scylace Plc Company Report 2022

Running head: CASE STUDY ON SCYLACE PLC.
Case study on Scylace Plc.
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1CASE STUDY ON SCYLACE PLC.
Executive Summary
The report is designed to analyze the investment decisions taken by Scylace plc.,
which is a grocery company. One of the investment decision taken by the concerned
company was that at a new location, the company decides to open up two
superstores. Alternatively, the other investment decision includes that opening up a
superstore branch at either of the two places by means of taking a bid over Helibeb
plc, which is known to be another retail company. In order to implement the
appropriate investment decision, the company hired a management consultant. The
data has been gathered from 2017 and 2018 financial statement and reports.
Therefore, the outcome of the report suggests that the company should adopt the
investment decision, which includes that the company should open its new
superstore branch at location B by asking a bid over the Helibeb plc. Therefore,
being a management consultant of Scylace plc, I suggest buying the Helibeb plc and
building only a single superstore.

2CASE STUDY ON SCYLACE PLC.
Table of Contents
Introduction...................................................................................................................3
Discussion.....................................................................................................................3
Methodology..............................................................................................................3
Computation..............................................................................................................4
Conclusion....................................................................................................................7
Recommendation based on the Study.........................................................................8
References.................................................................................................................10

3CASE STUDY ON SCYLACE PLC.
Introduction
Scylace plc. Company is known to be a grocery retail chain. The report is
prepared to analyze the two schemes proposed by the management consultant,
hired by the concerned company. The first scheme of the investment decision
proposed was that whether the company should open two new superstores at two
different places or whether the company should open only one superstore at one of
the two locations. On the other hand, the second proposal states whether the
concerned Scylace plc. Company will take over the clothing retail, which is named as
Helibeb plc. by making a takeover bid for the company.
The concerned company's available resources are found not to be sufficient
for making investments. The second half of the report deals with the methodology
part. The methodology part will analyze the two proposals that are mentioned above
to give a clear view on the projects so that the company accepts the best proposal
between two of them with the help of the resources that are available. The evaluation
part of the report is done on the basis of the calculations, which were done in the
examinations. The data gathered from the financial statement as well as the records
of both the companies were considered in the calculation part. The financial reports
that were collected are for two financial years, which are 2017 and 2018.
Discussion
Methodology
The proposals that have been suggested by the concerned grocery retail
company are evaluated by me so as to perform the role of a management
consultant. The two proposals that are proposed are already mentioned above. The
cost acquired for building the superstore is evaluated and is found to be £30.0 million
(Easton, 2015). This mentioned cost is required to make the superstore at location A,
which is known to be the first location. On the other hand, to build the superstore at
location B, the cost required is found to be £15.0 million.
The other available data required for computation is that the cost of residual
value for option A is given as £10.0 million and for option B, it is £5.0 million. The
annual sales revenue for option A is given as £10.0 and £6.0 for option B. The yearly
cost of sales for option A and option B is specified as £8.1 and £4.8 respectively
(Caballero, Farhi & Gourinchas, 2017). The staff costs for both the location A and B