This report delves into the core concepts of finance portfolio management, beginning with an exploration of dividend policies and their relevance to company valuation. It examines the factors influencing dividend decisions, contrasting scenarios where dividends are crucial versus when reinvestment is prioritized. The report then presents a comparative financial analysis of Melrose Industries PLC and Balfour Beatty, evaluating their performance through working capital, profitability, gearing, and investor ratios. The analysis includes calculations and interpretations of key financial metrics, such as operating profit ratio, debt-equity ratio, and price-earnings ratio, providing insights into the financial health and investment potential of each company. Finally, the report discusses the importance of working capital management, emphasizing the balance between liquidity and profitability, and the role of debtors in optimizing cash flow. The report highlights the objectives of working capital management and its impact on the financial health of the company.
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