International Finance : A Sample Report By Experts

Sample Report 

On 

International Finance 

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Table of Contents 

INTRODUCTION ...........................................................................................................................3 

TASK 1 ............................................................................................................................................3 

TASK 2 ............................................................................................................................................5 

b) Calculation of different valuation methods .............................................................................7 

c)Instances that shows variations .................................................................................................8 

d) Risk exposures faces by FTSE 100 .........................................................................................8 

e) Circumstances that surrounds the acquisition ..........................................................................9 

TASK 3 ..........................................................................................................................................10 

Recommendations ......................................................................................................................10 

CONCLUSION ..............................................................................................................................10 

REFERENCES ..............................................................................................................................11 

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INTRODUCTION 

The role of finance has increases as the external complexities has enhances the scope of 

financial aspects on a global level. Barclay has been selected for this project report as this 

focuses on taking new investment by taking FTSE component. The financial performance of this 

entity will be ascertained by using comparative ratio analysis. 

TASK 1 

Barclay is a multinational brand which deals in wide variety of services all across the 

world in order to cater the needs and expectations of their desired customers. This global brand 

deals in the current business of this particular organization is the banking sector. The banking 

sector of an organization cater all the needs and expectations of their client by using technology 

as one of the important factor (Frieden, 2015). The innovation is applied by this sector in 

changing their traditional banking practices by adding the technological factor as one of the 

important element in their business operations. 

Ratios 

Formula 

2015(GBP 

million) 

Profitability Ratios 

Net sales 17201 

Gross profit 12558 

Net profit 623 

Operating profit 4777 

Gross profit ratio GP/ net sales * 100 73.01% 

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Net profit ratio Net profit / net sales * 100 4.96% 

Operating profit ratio Operating profit / net sales*100 27.77% 

Liquidity ratios 

Current assets 623291 

Current liabilities 502089 

Inventory 0 

Prepaid expenses 0 

Current ratio current assets / current liabilities 1.24 

Quick ratio 

Current assets – (stock + prepaid expenses) / 

current liabilities 1.24 

Interpretations 

Profitability ratios-The ratios calculated under this particular sector is beneficial for an entity as 

it helps in determining the profitability of the business. The profit of an entity can used to 

strengthen the overall entity (Bertoni and Lugo, 2013). This particular category has further 

bifurcated into three segments which are given as below: 

 

Gross profit- The raw amount of figure that creates additional value for an enterprise as 

it obtained by deducting cost of sales from the sales and the revenue earned by an 

enterprise. The higher percentage of gross profit shows that the burden of cost of sales is 

less which increases the overall gross profit. 

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Operating profit- The gross profit can be reduces by deducting all kinds of operating 

expenses from the main figure which forms one of the basis in order to calculate the 

operating profit. The decrease in the percentage of the operating profit ratio more than 

half of the gross profit ratio has revealed the deficiency of an enterprise. An entity needs 

to reduce their operating expenses to increase their overall operating profit. 

Net profit- In the corporate world the full fledged amount which is taken into 

consideration in ascertaining the profitability of the business (Baylis, Smith and Owen, 

2013). This particular factor has considered the taxation amount which reveals the true 

performance of an entity. The above decreased ratio has determined the actual value 

created by an entity in operating their existing business. The taxation factors has ruin the 

current performance of this entity. 

Liquidity ratios- The cash is regarded as one of the important factor this entity which is 

determined by ascertaining their liquidity position in order to bear short term obligations arises in 

near future. This is divided into two commonly used categories which are given as below: 

 

 

Current ratio- The proportion of current asset are evaluated in relation to the current 

liabilities held by an entity. The current asset should be higher than the current liabilities 

to meet their obligations by using their current assets. The higher ratio above the 1 will 

reveal the ability of an enterprise which needs to be maintain this efficiency over the 

time. 

TASK 2 

Quick ratio- The current assets are determined properly by excluding the figure of 

closing assets. The same ratio of current ratio will be shown in the quick ratio has 

ascertained their true performance. This show that an entity has no significance of closing 

stock in their enterprise. 

a) Net asset valuation 

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It is one of the methods of evaluating the business performance of Barclay by applying 

this model in order to evaluate the efficiency of the asset held by an entity for a particular time 

period. This method of evaluation states that it provides lower limits in order to value a 

company's worth in relation to their available asset held by them (Claessens and Forbes, 2013). 

The current option able to produce realistic and accurate results as the asserts are evaluated by 

excluding the intangible assets in order to provide the realistic results. It excludes the goodwill 

which is intangible asset and widely used asset in an enterprise. It is calculated by dividing 

tangible assets by the number of shares held by an entity. 

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Advantages 

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It helps in comparing the performance of an entity in the case of merger which is backed 

by purchasing of asset. 

The current focus of this method will enhance the value of the overall asset held by an 

entity. 

The valuation of the overall property held by an enterprise by applying different methods 

in the investment companies where assets are considered as precious stones. 

Disadvantages 

The singular assets value can be changed over the years which can created difficulty in 

determining the actual value of the assets in case of going concern concept adopted by an 

enterprise. 

The historical and replacement of cost approach used by an entity may created turbulence 

for an enterprise in as entertaining the t6rue value of all the assets. 

Price earning basis- This form of analysis the price of a particular shares of an enterprise on the 

basis of income of that particular years are analyzed through various prices of particular share in 

a given year (Gilpin, 2016). This method is used to determine the value of the overall business or 

taken as the large proportion of shares. This method will be beneficial for an entity as it attract 

the wide number of shareholders which created value for the overall shareholders' dividend and 

the retention policies. It is calculated after dividing market value by earning per share of the 

business entity. 

Advantages 

It helps in analyzing the specific degree of risk levels of the company 

The strength of an enterprise will be measured by determining the expected future 

earnings of this entity. 

Disadvantages 

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The values of the price earning ratio can be deflated due to unquoted value of shares of 

the business. 

The diversification of business can affect the current overall business performance 

The variety of components in the capital structure may create burden for an enterprise in 

ascertaining the true values of their prices. 





Dividend valuation basis- Another method used in evaluation the performance of an enterprise 

is the dividend valuation which assist an entity in order to determine their future dividend in the 

prospective years (Frieden, 2015). This is also regarded as the share valuation method which is 

based on the dividend's as it assumes constant dividends or their overall growth for specific 

bundle of years to be taken in the forecasting process. It followed one of the unique approaches 

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of the perpetuity which analyses the future performance of an entity by judging their current 

facts and figures. 

Advantages 

It is well defined method in evaluating the non-controlling interest of an enterprise 

The existing values of an entity will be helpful for determining the property worth 

Disadvantages 

The scope cannot be assumed to be constant as the future decisions can't be taken on a 

constant basis. 

The deficiency of this particular method is that it unable to taken into consideration the 

expectations of all the shareholders. 

b) Calculation of different valuation methods 

Valuation Formula 2015 

Net assets 81502 

Outstanding equity shares 2196 

Net assets value Net assets / outstanding equity shares 37.11 

Stock price 210.86 

Earning per share -1.9 

Price/Earnings ratio Stock price / Earning per share -110.98 

Next year dividend 3.5 

MPS 210.86 

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G 0.0094 

Dividend Value D1/P0+G 0.03 

Interpretations 

Net asset valuation method- The valuation of the above method shows the good values of the 

assets held by this entity that is around 37.11 (Gilpin, 2011). This ratio is shows the accurate 

values as it does not consider only tangible asset without considering the intangible assets like 

goodwill. This value can help an entity in order to take future business opportunities as this can 

attract wide number of investors who invest their valuables in an entity. 

Price earning ratio-The negative figures of this particular ratios shows the deficiency of an 

enterprise in determining the value of the stock of shares held by an entity. It gives particular 

direction to an entity in order to transform their organization as per the external market changes 

in an enterprise. 

Dividend valuation- The capability of an organization reflects the ability of this enterprise in 

order to pay their dividends. The current dividend valuation method shows the accurate results 

such as 0.03 as the capability of an organization to pay of their dividends in order to gain the 

trust and able to retain loyal customers in their organization. 

c)Instances that shows variations 

The performance of Barclay company can be analyses by applying different forms of the 

valuation methods which help an entity in order to enhance their current capabilities. These 

methods help in determining the value of the entity by adding the time factors as values are 

changes according to the changes takes place in their external environment. The variety of 

options such as dividend valuation method, price earning ratio and asset valuation method. The 

values of these methods will help an entity in order to comment upon the positive or negative 

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values of an entity (Chwieroth, 2015). The approaches will help in ascertaining the true 

performance regarding the business health which will evaluates the overall financial performance 

of an entity. This increasing efficiency can improve the existing skills and talents of an 

individual that transform the existing framework that guides an entity in order to make their 

business decisions. The assets are evaluated to provide future business opportunities to be earn 

by an enterprise in the present terms to think about their future. The investors and the 

shareholders will be attracted towards an entity with the increasing value of an enterprise. An 

entity will need to show their credibility by taking risk with a motive to reduce their risk level 

that can generates higher profitability of the business. The ability of an entity can be ascertained 

which will help an entity to recognize their current capabilities to pay off higher divided by 

curtailing their overall business expenses that indirectly reduces the return of all the 

shareholders. 

d) Risk exposures faces by FTSE 100 

The Barclay need to enlist their organization by taking one of the important component of the 

stock market which is FTSE 100 constituent. The corporation are required to make decision in 

order to combine their current business by adding external entity by assessing their efficiency on 

the basis of several challenges are risks faces by this entity which are given as below: 

Market changes- The external market changes can ruin the current business performance of an 

entity as the current performance can deteriorate the existing business efficiency. The stock 

market are constant changes every second there will be new change in the overall prices that 

directly created strong impact on the market share. 

Price level- The current price level can affect the business performance of overall entity which is 

affected as per the external market changes (Bodea, and Hicks, 2015). The prices of the banking 

company are analyses on the basis of the previous all other sectors in which this organization 

deals. The prices need to be taken on the average basis as this organization wants to take overall 

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industry average in order to compare their singular efficiency on the basis of all the figures. It is 

essential that price are compared on the basis of all the figures used by an entity. 

Financial exchanges- The basic problem arises in the stock market exchanges is of exchanging 

financially by using commodities or derivatives which needs to purchase securities in the 

business context. The exchanges are form part of this particular exchanges which needs to be 

protected by using proper evaluation and monitoring approach that protects the interest of all 

individuals. The time frame need to be designed properly in order to achieve all the goals amnd 

the objectives which will assist an entity in order to support the organization to take up this kind 

of opportunities. 





e) Circumstances that surrounds the acquisition 

There are various situations arises in a normal business that creates direct impact on an enterprise 

as these can affect the overall performance of the business. The different situations that arises in 

an enterprise such as trading difficulties, change in the management structure and disposal of 

assets (Gilpin, 2016). All these methods can enhance the overall performance of an entity as 

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acquisition is regarded as one the growth strategies than enhances the overall growth of an entity. 

This kind of decisions are analyses by an enterprise owner as this can influence their overall 

performance that determines the current worth of different components. The different entities 

will be involved here in analyzing the actual business performance that is enough to cater the 

needs and expectations of all the external parties. The business acquisition is the biggest decision 

taken by an enterprise owner that can increase their initial business by improving their 

capabilities. These capabilities can be improved which will assist an entity in order to evaluate 

their market share by applying various categories (Lewis, 2015). The acquisitions are big 

decision that can fluctuates the existing level of the business. The profitability is the largest 

factors which can help an entity in order to fight against all their rivals. 

TASK 3 

Recommendations 

It can be summarized from the above financial performance of the barclays which is assessed in 

order to help an entity to initiate their business proceedings in a systematic manner. The 

opportunities for an enterprise is to taken up a new chance of listing their organization in the 

stock exchange by taking one of the constituent of FTSE 100 indexes. This can help an 

enterprise which will provide adequate direction in order to make further business decisions. The 

ratio analysis has been used in ascertaining the true performance of an enterprise in which an 

entity needs to select a particular decision in order to take up new project or reject the proposal. 

The decision behind selecting a particular component of stock market as it is constantly changes 

as per the time factor (Johnson, McLaughlin and Haueter, 2015). The results obtained from the 

ratio shows the ability of an enterprise as the stable financial conditions can support an entity in 

order to take this kind of opportunities that can changed the life of the existing business. It can be 

said that an entity can make investment in the stock exchange by taking this particular 

component. 

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CONCLUSION 

It can be summarized from the above project report than an entity's performance will 

prove beneficial as good results obtained from the ratio analysis. The results obtained from this 

particular problems arises in the normal courses of action of an enterprise. This help an entity in 

order to select the particular project. 

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REFERENCES 

 

 

 

 

Alper C. E., Forni L. and Gerard M., 2013. Pricing of sovereign credit risk: Evidence 

from advanced economies during the financial crisis. International Finance. 16(2). 

pp.161-188. 

Baylis J., Smith S. and Owens P., 2013. The globalization of world politics: An 

introduction to international relations. Oxford University Press. 

Bayne N. and Woolcock S. eds., 2011. The new economic diplomacy: decision-making 

and negotiation in international economic relations. Ashgate Publishing, Ltd. 

Bertoni F. and Lugo S., 2013. Testing the strategic asset allocation of 

stabilization sovereign wealth funds. International Finance. 16(1). pp. 

95-119. 

 

 

 

 

Brealey R.A., Myers S.C., Allen F. and Mohanty P., 2012. Principles of corporate 

finance. Tata McGraw-Hill Education. 

Claessens S. and Forbes K. eds., 2013. International financial contagion. Springer 

Science & Business Media. 

Ferguson N. and Schularick M., 2011. The end of Chimerica. International Finance. 

14(1). pp. 1-26. 

Frieden J., 2015. Banking on the world: the politics of American international finance. 

Routledge. 

Gilpin R., 2011. Global political economy: Understanding the 

international economic order. Princeton University Press. 

 

Gilpin R., 2016. The political economy of international relations. Princeton University 

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Press. 

 

 

 

 

 

Gomes S., Jacquinot P., Mohr M. and Pisani M., 2013. Structural reforms and 

macroeconomic performance in the Euro Area countries: a model‐ based assessment. 

International Finance. 16(1), pp. 23-44. 

Helleiner E. and Kirshner J. eds., 2012. The future of the dollar. Cornell University Press. 

Hillier D., Grinblatt M. and Titman S., 2011. Financial markets and corporate strategy. 

McGraw Hill. 

Chwieroth J. M., 2015. Managing and transforming policy stigmas in international 

finance: Emerging markets and controlling capital inflows after the crisis. Review of 

International Political Economy. 22(1). pp.44-76. 

Bodea C. and Hicks R., 2015. International finance and central bank independence: 

Institutional diffusion and the flow and cost of capital. The Journal of Politics. 77(1). 

pp.268-284. 





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International Finance : A Sample Report By Experts

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