Applied Financial Skills – Assignment: A report of GlaxoSmithKline (gsk) plc

Weighting 60% of the module marks

The Task

This assignment is concerned with the financial performance and financial position of a company over a period of time. Key areas of interest are:

• Performance: how well has the company performed as seen through its performance ratios?
• Financing/Position: how does the company choose to finance its activities and investments and what are the implications of these choices for its financial position?

Your position is that of an analyst working in a financial advisory firm. Your role is to monitor and evaluate publicly available information about the company, reporting your findings to members of the executive team.

Your line manager, Peter Taylor, has emailed you the following message:

‘Hi. We have been approached by a group of high net worth private investors in Dubai who are looking to make long-term, strategic investments into pharmaceutical industries. Their representative, Louise, who is based in London, has expressed a particular interest in the pharmaceutical sector. I have asked Theo, the finance intern, to pull together some ratios for gsk plc in an excel spreadsheet and pass them on to you.

Can you prepare a report, no more than 1,200 words please, which clearly explains gsk plc’s investing and financing activities and profits performance? The most recent annual report that we have been able to obtain is for the year ended 31 December 2019, so you should certainly use that. Could your report also explain anything that they have been investing in and how the company is being financed? You’ll need to present the ratios in your report, but you won’t need to explain the meaning of the ratios themselves.

Could you conclude your report by stating whether or not, based on your analysis of the numbers along with other research, you think that gsk plc would make a good long term investment? You will find it helpful to use the information in the Strategic Report at the front of gsk plc’s annual report to help you interpret the ratios but could you also include some research from newspaper articles and/or from news websites to back up your conclusions?

Your report must set out who it is to, who it is from, be dated, give a heading and include a brief introduction and conclusion. The main body of your report must include a discussion of the ratios (first of all for investing and financing, and secondly for the profits performance), to include information from the sources that you have decided to use.

Clarity of written English is important. Charlotte’s clients are highly educated but English is not their first language. Also, we need to respect the value of their time, so the report must be clear and direct. It is important that they can understand its message without having to think too much about it.

Thank you.

You are required to

1. Review and evaluate the information provided
2. Source additional publicly available and relevant information e.g. management commentary type disclosure in annual reports, newspaper articles, websites etc.
3. Write a formal report addressed to your line manager, Peter Taylor that addresses the request in the message.

Word limit: 1,200 words

Sources

Company information: https://www.gsk.com/en-gb/about-us/

Annual report:  Please download from the assessment folder

Online links to The Guardian Business, The Financial Times and BBC news are provided via READING LISTS on moodle.

Learning outcomes relevant to this assignment

• Locate, evaluate and use information from multiple sources to critically appraise the financial performance and position of companies in the light of their strategic and operational objectives.
• Identify the main sources of company finance and the consequences of different capital structures.

Assessment criteria

Please see attached feedback sheet for details of assessment criteria. You are advised to take note of the allocation of marks to understand where the focus of your report needs to be.

Submission

Hand-in date: The deadline for this assignment is 1pm on the Thursday of week 12 i.e.29^th April 2021.  You may submit it prior to that. Work is to be submitted as one file only via Turnitin in Moodle in Word format. Additional technical information on how to submit will be provided in Moodle.

Guidelines for layout: Your assignment should be presented in size 11 Arial font and should use double line spacing with 2.54cm margins top, bottom, left and right. With these settings, one page contains approximately 350 words.  You are advised to check carefully as any work in excess of the 1200 words will not be marked.

Anonymous submission: To comply with the anonymous marking policy do not show your name anywhere on your work. Use only your student number.

Feedback

We aim to provide written feedback on your assignment. You can request a discussion of this feedback from the module leader, if you need help in understanding your grade or how you can improve this kind of work in the future. The coursework task and the final examination are independent of each other and you will not need feedback on your coursework in order to attempt the exam.

Authenticating your coursework

You must be able to demonstrate that the course work you submit for assessment is your own. You must therefore keep all working documents (electronic and paper) that you used or created while preparing the assignment, such as photocopies of sources and internet pages, your own notes on your reading and preparation, details of the process of analysis, field notes and so on. Most importantly, you should keep the early developing drafts of your coursework as evidence of the originality of your work by saving each revision to a file with a different name. This material should be kept until one month after the module results have been published.

Additional tips

The focus of this assignment is to use evidence to try to tell a story about the way the company raises funds and the implications of that financing strategy, how it uses those funds and therefore how well it is performing (i.e. the strengths and weaknesses of its financial performance and position). We are testing how well you can find and use information and draw conclusions. These are things we explore in the module and you should refer to what you have been learning in class sessions and homework activities.

There are no marks for explaining what a ratio is intended to show- you can assume the reader has a good understanding of financial analysis. There are also few marks for description. Your focus should be on what the actual results suggest.

The strategy of the company will be relevant but have only an underpinning role. This is not a Business Strategy assignment. You need to use your judgement and use strategic information to explain results.  For example if the company has made a major strategic shift which explains a big investment or a significant change in sales or expenses then it would be relevant to refer to this. If a company competes in a particular way e.g. is a high margin niche player but has very low margins then, again, this would be an appropriate area to explore.

Many business reports are short executive summary type reports. You have only 1,200 words so you need to make tough choices about what to include. (This assignment brief is over 1,400 words!) You should expect to discard some of the information and ideas that you have so that you highlight the key issues and evaluate them critically. No summary or abstract is required. Appendices are not appropriate so please do not include any.