Finance Assignment

You are advising the management of JD Sports Fashion plc (JD Sport), the UK based
retailer of sports and fashion ware, who are considering purchasing J Barbour & Son
Ltd (Barbour), the British clothing manufacturer based in South Shields England.
Required
You are to produce a 3000 word report (excluding final reference list and relevant
appendices) and prepare a short presentation 10 main slides ( 12 slides including
title and references) (10 minutes in Pecha Kucha format) of your analysis and
recommendations, suitable for presentation to the management of JD Sport. The
report and presentation should address the five areas set out below:
1. Introduction and financial analysis of both companies (30%)
Analyse the latest published financial statements of both companies with a view to
comparing and contrasting the operations of the two companies and, in the case of
JD Sport, appropriate competitors. (few ratios with competitors) (more and more
ratios should be for jd sports)
You can find the 2017 financial statements of JD Sport on the investor relations
pages of their website: http://www.jdplc.com/investor-relations/reports.aspx
The financial statements of J Barbour and Sons, Limited (Company registration
number 00124201) are available from Companies House (https://
beta.companieshouse.gov.uk/) and basic analysis can be found on FAME (via LRC).
Note: you must include a full set of your own calculations for your ratios in the
appendices.
2. Cost of Capital (15%)
For investment appraisal purposes, JD Sport uses a discount rate of between 12%
and 15% (if you choose another rate, detail everything as why you chose that rate)
(give some reference to capital structure of jd sports and have discussion around it )
Suggest an appropriate rate for use in the proposed acquisition of Barbour. You
should comment on the rate(s) you have used.
Comment on the proportions of the equity and debt within JD Sport’s capital structure
and make clear reference to the sources of information you have used for each
component. Comment on the usefulness, relevance and any weaknesses of using
the cost of capital figures you have chosen as a basis for the discount rate to be
used in capital investment decisions for JD Sport – you should also consider risk.
State any assumptions you make in the Appendices. Any calculations, assumptions
and references to the relevant pages of the financial statements you have used
should be in the Appendices with only the final figures and conclusions being brought
forward into the report itself.
3. Calculate a price per share payable by JD Sport for the purchase of J
Barbour and sons, Limited (25%)
(Present in table)
You should suggest a total price payable for the company and then an individual per
share price. Assume the purchase will be in cash and suggest possible ways in
which JD Sport could finance the acquisition. State any other assumptions you
make, calculations should be presented in the appendices.
4. Calculate the likely impact on the financial statements of JD Sport following
the purchase of Barbour (10%) (goodwill)
You should refer to your analysis in section 1 above.
5. Share price movements of JD Sport (10%) (cannot do without share price
graph)
Discuss the extent to which the market share price movement reflects the underlying
value of JD Sport. Your answer may include comments on corporate governance,
market efficiency, investor expectations of the retail sector in the UK, the impact of
any potential economic downturn and growth expectations, the risk/return
relationship, health issues, credit rating status, ‘market hype’ and Brexit. State any
assumptions you make for any calculations which should be in the Appendices.
Presentation of Report
Your assignment should be word processed and presented in the form of a business
report complete with appendices and a full set of references to academic sources
that you have used, set out in the Harvard style. Any and all references to materials
and data used must be acknowledged preferably by using footnotes to source facts.
The writing style should be incisive, factually based and focused on the subject
company. You must take into account the knowledge of your reader and avoid
tutorial type explanations or general unfocused commentary.
Your report should contain the following:
• The Appendix should contain all calculations. The way that figures are
displayed in the Appendix must be such that there is an adequate “audit trail”
back to the financial statements.
• A references list is required. It should contain specific newspaper and journal
articles and internet sources. We do not expect to see more than one text
book in addition to your module manual.
• A conclusion and an executive summary. ( Summary should detail interesting
things about report) it is not an introduction.
There is no need to include the Company’s Annual Report and Accounts in your
submitted work, but you should make clear references to the pages that you have
used. Please note the report and appendices should be submitted as one file.
Your PowerPoint presentation should be in Pecha Kucha format and should include
relevant supporting notes you can submit as a separate file or (preferably) as an
appendix to the report.
Performance criteria for written assessment and supporting presentation
The following information should help you to understand the marking criteria, which will
be applied when marking the reports.
Report should be:
• The layout of the report is completely clear and concise.
• The presentation of the information shows originality in approach.
• There is an excellent understanding of all aspects of the report.
• The answers are complete and very convincingly argued.
• All major sources are clearly referenced and well summarized.
• Limitations to the analysis are considered.
THE PRESENTATION:
Should:
• Be concise and clear and suitable for a board level presentation.
• Be no more than 10 slides in length.
• Clearly state the terms of reference.
• Address the key questions raised in a clear manner without too much detail.
• It should state the conclusion and make clear recommendations.
• Demonstrate creativity in approach to presentation.

 
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