Detailed Investment Proposal: Barclays PLC Share and Security Analysis

This project provides a comprehensive investment proposal for Barclays PLC, targeting potential investors. It begins with an executive summary outlining the importance of financial planning in modern business and the significance of investment for both companies and investors. The project then delves into a detailed quantitative analysis of Barclays PLC's financial statements, including the income statement, cash flow statement, and statement of financial position, comparing data from 2019 and 2020. The analysis assesses key financial metrics like interest income, operating expenses, net profit margin, and earnings per share, as well as cash flow from operating, investing, and financing activities. Furthermore, the project evaluates Barclays PLC's share price performance, market capitalization, and dividend yield, along with an examination of the company's current operations and risk factors. The analysis employs ratio analysis to assess liquidity, credit, and market risks, concluding with a justification for the investment and providing recommendations for investors.

Investment proposal in Barclays PLC

Executive summary
In respect to the modern competitive business organisation the concept of financial planning and
management has gained significant importance as it not only provides business organisation with
appropriate opportunity to ensure efficient and economical channelization of funds but it also
provides appropriate scope to investors to analyse financial performance of the organisation and
undertake favourable investment. Investors primarily undertake investment towards the shares
and security of a particular business organisation in order to ensure appropriate maximization of
profitability and creation of wealth in the short and the long run. Evaluation in the structured
operating procedure of modern business organisations and the investment procedure of investors
provide that there are a large number of individuals who make use of intraday trading which
implies engaging into specific transactions on the stock market on a daily basis in order to extract
daily profits. Business organisations are in need of investments in order to effectively ensure that
they are effectively supplied with appropriate amount of capital in order to meet their capital and
revenue expenditure required to undertake daily business operations. As finance is also
considered to be the lifeblood of organisational operations large scale business organisation
primarily depend on external Investments in the form of equity and debt for meeting their
financial needs along with providing appropriate opportunity for wealth maximization and value
creation to investors. Therefore, as the organisation is primarily dependent on external source a
financing in order to meet its daily business operations it is also very important for the
organisation to provide and appropriate share of profitability to these investors for the risk
undertaken by them.
Under this assignment a detailed evaluation in respect to the risk associated with making
investment towards the share in security of Barclays PLC is effectively discussed based on an
analysis into the share price of the organisation and the analysis into the financial statements
through the effective utilisation of financial management and planning tools. The primary target
audience of this assignment is the investor who is looking forward to make an investment of
approximately $100000 towards share and security of Barclay PLC. The objective of the
assignment is to provide appropriate knowledge and information to the potential investor in
respect to the risk and benefits associated with making specific investment towards the shares
and securities of Barclays PLC.

Table of Contents
Introduction......................................................................................................................................4
Quantitative analysis of financial statement to support decision making........................................4
Evaluation of consolidated income statement for 2020 in comparison with 2019......................4
Evaluation of cash flow statement...............................................................................................7
Evaluation into consolidated statement of financial position......................................................8
Evaluation of share price..............................................................................................................9
Evaluation into current organisational operations.....................................................................11
Historical simulation......................................................................................................................12
Evaluation into financial statement using ratio analysis................................................................13
Cost to income ratio...................................................................................................................14
Earnings per share......................................................................................................................14
Liquidity ratios...........................................................................................................................14
Credit risk......................................................................................................................................15
Market risk.....................................................................................................................................15
Liquidity risk.................................................................................................................................16
Justification....................................................................................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................19

Introduction
The organisation Barclays PLC is identified to be a business organisation that primarily
undertakes business operations into the banking and financial service industry founded in the
year 1690 which is approximately 330 years ago. The organisation is currently identified as a
large British multinational universal bank which is headquartered from London providing
employment to more than 83500 employees. The organisation Barclays PLC can be effectively
identified as one of the oldest and most efficient organisations within the banking and financial
service industry of United Kingdom as it is also undertaking efficient and profitable business
operations during the current period.
During the last financial year, the organisation effectively generated a revenue of approximately
2.80 billion euros along with a net income of 2.461 billion euros. The total Assets of the
organisation are also valued at approximately 1.4 trillion Euros in the year 2020 and long will the
total equity of 66.8 billion euros.
The organisation Barclays PLC is also identified to be the largest banking and financial services
company in the united kingdom's having a market share of more than 10.50% along with having
a total market capitalisation of 33754 million euros. The organisation is also identified to be one
of the largest commercial and Financial Service Bank in the United kingdom’s based on its
market share and market capitalisation. Therefore, as the organisation has significant power to
word transitional corporations it is able to effectively transitional corporations it is able to
effectively undertake corporate control and ensure favourable market competition and global
financial stability.
Quantitative analysis of financial statement to support decision making
Evaluation of consolidated income statement for 2020 in comparison with 2019
The consolidated income statement is a financial statement that helps business organisation to
effectively identify the total revenue generated from business operations undertaken during a
specific financial year. The income statement effectively identify is the profitability of the
organisation by establishing a negative relationship between revenue created during the financial
year and the cost incurred towards creating the same (Easton et al., 2018). Therefore, the
consolidated income statement will provide appropriate knowledge and understanding to both

the management and external investors in relation to the overall profitability of the organisation
and its revenue generating capacity in the long run.
Figure 1: profitability of Barclays PLC
(Source: Robinson, 2020)
The evaluation into the consolidated income statement of Barclays PLC effectively provides that
the total interest income of the organisation during the financial year 2020 has slightly reduced in
comparison to the financial year 2019. The total interest and similar incomes generated by the
organisation during the financial year 2020 is identified to be 11892 million euros whereas the
interest and similar incomes generated in the year 2019 was identified to be 15456 million euros
(Robinson, 2020).

Figure 2: financial performance of Barclays PLC
(Source: Monahan, 2018)
Further analysis into the consolidated income statement of the organisation for the financial year
2019 and 2020 effectively provides that there has been no significant change in the percentage of
operating expenses in relation to the net operating income of the organisation for specific
financial years. The percentage of operating expenses to net operating income during the
financial year 2020 was identified to be 80% whereas in the financial year 2019 it was identified
to be 79%. This also implies that the management of the organisation was able to effectively
control expenses during the financial year 2020 irrespective of decreased revenue generating
capacity. The net profit margin of the organisation during the financial year 2020 was identified
to be approximately 20% whereas in the year 2019 it was identified to be approximately 21.7%
(Monahan, 2018).
Additionally, the evaluation into the consolidated income statement of the organisation also
provides that the basic Earning per share of Barclays PLC has significantly reduced from 14.3 to
8.8 during the financial year 2020 as compared to 2019. This is primarily due to the reduced
revenue generating capacity of the organisation during the financial year 2020 as a result of the
negative impact of covid-19 pandemic towards efficient and economic business operation. The
organisation has appropriate capabilities of enhancing is revenue generating capacity during the

financial year 2021 and therefore investors must effectively and take decisions accordingly
looking at the growth potential at Barclays PLC.
Evaluation of cash flow statement
The evaluation 2017 statement of the organisation for the financial year 2020 in comparison to
the financial year 2019 effectively provides that the management of the organisation has
effectively managed cash inflows and outflows during the financial year along with creating a
positive cash flow from operating activities during the financial year. Besides having lower
profitability during the financial year 2020 in comparison to the financial year 2019 The
Organisation was able to effectively generate a positive cash flow from operating activities
which is 57505 million euros as compared to a negative of 502 million Euro during the financial
year 2019 (Benrqya and Jabbouri, 2021).
Furthermore, net cash flow from investing activities of the organisation had also significantly
reduced during the financial year 2020 as compared to the financial year 2019. The net cash flow
from investing activities of the organisation during the financial year 2019 was a negative 23965
million euros as compared to a negative of 18376 million euros in the year 2020. Therefore, it is
evident that the management Barclays PLC was effectively able to save approximately 5590
million euros during the financial year 2020 in respect to cash flows towards investing activities.
Figure 3: shareholders return
(Source: Jabbouri, 2021)

Lastly the valuation in to the financing activities of the organisation effectively provides that the
management of Barclays PLC was able to effectively in hands its cash inflows from financing
activities during the financial year 2020 as compared to the financial year 2019. The net cash
flow from financing activities of the organisation in 2020 was valued at 2732 million euros and
on the other hand in the year 2019 the cash flow from financing activities of the organisation
were only 6 90 million euros (Ahmed and Safdar, 2018).
Therefore, the total cash and cash equivalents of the organisation during the financial year 2020
was valued at approximately 210142 million euros as compared to only 166613 million euros in
the year 2019. The enhancement in in cash flows within the organisation during the financial
year 2020 effectively indicates favourable and positive utilisation of organisational funds along
with indicating efficient business management (Mbona and Yusheng, 2019).
Evaluation into consolidated statement of financial position
The evaluation in to the statement of financial position of the organisation effectively provides
that there has been a significant change into the financial position of the organisation during the
transitional period of 2019 to 2020. The total Assets of the organisation has increased from
1140229 million euros to 1349524 million euros.
Figure 4: Performance of Share price
(Source: TEXTS, 2018)

It is also worth mentioning that the total Assets of the organisation has witnessed a significant
increase of 209285 million euros during the continuous Period of the covid-19 pandemic where
other business organisations within the industry was suffering to generate positive result.
Furthermore, the analysis into the total liabilities of the organisation during the financial year
2020 in comparison with the financial year 2019 effectively provides that there has been a
significant increase in the value of total liabilities of the organisation just like the increase in the
total Assets of the organisation during the financial year 2020 (TEXTS, 2018). The total liability
of the organisation during the financial year 2019 was identified to be at 1074569 million euros
that significantly increased to 1282632 million euros in the year 2020.
Lastly the evaluation to the total equity of the organisation effectively provides that there were
no significant changes in the value of total shareholders liability or total equity of the
organisation during the transitional period of 2019 to 2020. The total equity of the organisation
in the year 2019 was identified to be 64429 million euros that steadily increased to 65797 million
euros in the financial year 2020 (Firdaus and Endri, 2020).
Therefore, from the analysis into the statement of financial position of the organisation it is
evident that Barclays PLC has a very strong foundation in relation to efficiently undertaking
business operations in the competitive business environment along with ensuring fire
maximization of shareholders wealth and satisfaction of stakeholders need (Çelikay and Çelikay,
2021).
Evaluation of share price
The evaluation into the share price of Barclays PLC effectively provides that the securities of
this organisation were effectively listed into the securities and exchange market on 1st July 1988
at a base price of 4.27 GBX and the current price of the shares of Barclays PLC is identified to
be 190 6.96 GBX as on 18th November 2021. The total market capitalisation of the organisation
is therefore identified to be 3.3 1 trillion and the dividend yield percentage is also identified to be
1.5 to percent which is considered to be one of the best dividends yields within the industry. The
share price of the organisation are highly volatile in nature it consistently changes based on the
client within the securities and exchange market and is also affected by the operations and
policies of comparative business organisation (Williams and Dobelman, 2017). All time high

share price of Barclays PLC was identified to be 71 0.69 GBP on 23rd of February 2007. Since
then, the share price of the organisation has not seen such a enhancement but the market
capitalisation and price earning ratio of the organisation has significantly increased which
indicates the internal capabilities and efficient business operations of the organisation into the
competitive business environment.
Figure 5: Current share price Evaluation
(Source: Dobelman, 2017)
It is also identified that currently the organisation is under utilising its assets and is not able to
undertake cable business operations even though it has appropriate funds at disposal and
completed resources to undertake aviation business operations (Haralayya, 2021). The evaluation
to the Future perspectives of the organisation also provides that the management of Barclays
PLC is looking forward to undertake specific advancements in the Banking and Finance sector in
order to effectively provide appropriate opportunity for Business Development and ensuring a
competitive advantage within the industry.

Figure 6: historical share price of Barclays PLC
(Source: Haralayya, 2021)
Evaluation into current organisational operations
In order to effectively frame a positive and favourable decision in respect to investment proposal
towards share and securities of Barclays PLC it is very important to effectively identify the
current level of operating efficiency within the organisation. the financial year 2020 was a very
contingent period for a large number of business organisations all across the world as economies
were significantly hampered from the negative impact of the covid-19 pandemic and the
lockdown being implemented by government organisations to control the spread of the virus
(Nießner et al., 2021).
Therefore, the evaluation into the current level of organisation operations undertaken by
Barclays PLC during its third quarter of operations effectively provide that the organisation has
already generated a revenue of 16.8 billion euros with a group profit before tax of 6.9 billion
euros. The Earning per share of the organisation has also significantly increased to 30.8 during
the financial year 2021 as compared to only 8.8 in the year 2020 (Fazzini, 2018).
Therefore, the evaluation provides appropriate examples in relation to the speedy recovery
undertaken by the management of Barclays PLC that effectively indicates the level of business
efficiency and effectiveness with which the organisation can operate. this speedy recovery also
indicates the capability of the top-level management of the organisation to effectively turnaround