Analysis and interpretation of company’s financial statements

Interpretation of a company’s financial statements
Assignment questions
You represent a group of investors and you have been provided with the most
recent published annual financial statements for Thomas Cook Group plc
and a set of financial ratios calculated using a spread sheet.
You are required to write a report to the investors advising them whether they
should invest in Thomas Cook Group plc.
The structure of your report should be as follows (approximate word counts
are in brackets):
1. A brief background to the group and its main markets and sources of
revenue (100 words).
2. An assessment of the group’s recent financial performance and
position based purely on the financial statements and calculated ratios
in the spread sheet provided (800 words).
This assessment should cover the following areas:
a. Profitability;
b. Liquidity;
c. Efficiency;
d. Gearing;
e. Investment potential.
3. A reappraisal of the group’s recent financial performance and position
based on contextual information in the following sections of the Annual
Report (800 words):
a. The Chairman’s Statement (pp11-13);
b. The CEO’s Review (pp16-18);
c. The Market Overview (pp25-27);
d. The Strategy Report (pp28-33);
e. The Financial Review (pp36-53);
4. A review and recommendation for investors of the investment potential
of the group (300 words).
5. An explanation of the limitations of your analysis including the
technique of ratio analysis (250 words).



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