International Financial Management
Coursework Assignment
General Instructions
You are the Finance Director of Next PLC, a UK based company with limited international operations. The company are primarily a fashion retailer operating a chain of stores across the UK which is supported by a mail order business called Next Directory. More information about the company can be found at www.next.co.uk and choosing “the company” from the bottom menu. Over recent years the company has undergone a successful revival, demonstrating strong sales growth and profitability, making good returns for shareholders. You are keen to build on this growth and are contemplating setting up some overseas retail operations. You will all be provided with a different scenario to consider, but the general guidelines will be the same
Required
You are required to write a report of no more than 3,000 words outlining the following
a) Whether or not the project should be undertaken
b) A strategy for the ongoing management of Forex risk which may arise as a result of such expansion should it go ahead
c) Advice on the organisational structure and financing arrangements which the company should adopt if it were to undertake such a project
Your report should be fully referenced, and your decisions should be backed up by appropriate calculations, and use real world data where appropriate
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Background and scope of the report
- Data collection and analysis method
- Background and conditions of undertaking the project
- Background of the country of investment - Australia
- View on the economic situation
- View on the relevant taxation
- Financial appraisal
- Net Present Value (NPV)
- Payback Period (PP) & Discounted Payback Period (DPP) & Break Even Analysis
- Accounting Rate of Return (ARR) & Internal Rate of Return (IRR)
- Feasibility study
- Financing
- How to finance: equity vs. debt
- Where to finance: UK vs. Australia vs. other countries
- Risk Management
- Risk identification
- Management of Forex risk
- Conclusive advice on the organisational and financial arrangements
- Organisational arrangements
- Financial arrangements
- Financing
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This report analyzes the feasibility of opening 150 new Next stores in Australia for the Next Plc. It assesses the financial aspects of the investment project, calculating key quantitative indicators and providing advice on organizational structure and financing arrangements. The report focuses on minimizing liability risks and maximizing profitability through debt financing. It also highlights the importance of managing Forex risk within the company's existing risk management framework.
- Financial assessment of the investment project
- Analysis of key quantitative indicators (NPV, Payback Period, IRR, etc.)
- Comparison of equity vs. debt financing
- Management of Forex risk
- Recommendations for organizational structure and financial arrangements
Zusammenfassung der Kapitel (Chapter Summaries)
The report begins by outlining the background and scope of the project, including data collection methods and the rationale for expanding into the Australian market. It then delves into the economic and tax conditions in Australia, highlighting both opportunities and threats presented by the current global instability. The financial appraisal section focuses on calculating key indicators like NPV, Payback Period, and IRR to assess the project's financial viability. The feasibility study explores financing options, including equity vs. debt, and evaluates potential sources of funding. It also addresses risk management strategies, particularly emphasizing Forex risk mitigation. The report concludes with recommendations for organizational structure, advocating for the subsidiary model to minimize liability and enhance managerial flexibility, and financial arrangements emphasizing debt financing to maximize profitability.
Schlüsselwörter (Keywords)
The key themes of this report revolve around strategic international financial management, specifically focusing on the financial analysis of an investment project in the retail sector. Key terms include: NPV, Payback Period, IRR, equity vs. debt financing, Forex risk management, organizational structure, subsidiary model, and maximizing profitability.
- Citar trabajo
- BA (Hons) Artur Gleyberman (Autor), 2009, Financial Report - Next Plc, Múnich, GRIN Verlag, https://www.grin.com/document/143373
