Comprehensive Analysis of Financial Ratios and Investment Appraisal

This assignment solution covers key aspects of business finance, including ratio analysis and investment appraisal. It begins with a segregation of financial ratios into profitability, activity, debt position, market comparability, and liquidity categories. The analysis compares a company's ratios against industry benchmarks, highlighting strengths and weaknesses in areas like inventory management, debt levels, and profitability. The assignment further delves into investment appraisal techniques, comparing 'renovate' versus 'replace' options using payback period, net present value (NPV), internal rate of return (IRR), and profitability index methods. The impact of weighted average cost of capital (WACC) on project feasibility is also examined. Finally, the solution includes a capital budgeting problem, calculating NPV and IRR to determine project viability. The document is available on Desklib, a platform offering a range of study tools and solved assignments for students.