The assignment aims to increase your understanding of the different techniques used in the evaluation of business sustainability and corporate bankruptcy. You are required to apply theoretical knowledge to actual company data.
The purpose of the assignment is to analyse the bankruptcy for a company to assess the likelihood of it going bankrupt. Some company data (note: all data taken from the FAME database) is provided for you on the following pages and in a separate Excel document, but you should also research any additional information as you feel necessary.
The submission should be in the format of a memorandum to an analyst considering investment in the company who has asked you to assess the bankruptcy risk of the company.
Your memorandum should include the following:
An assessment of bankruptcy risk for the company, referring to known bankuptcy models to support your assessment.
A critical discussion of the likelihood of the company going into bankruptcy.
Your task for the assessment is to analyse the case of Cineworld as of the 31st of December 2019 to evaluate the likelihood of bankruptcy as at that point. In your conclusion you should reflect on how events since that date have impacted the situation.
Some key financial data for the company is included in the Excel document attached (see Blackboard). You should be able to calculate what is needed using this information.
Assessment and Marking Scheme
Please be aware of the academic regulations regarding plagiarism.
See module handbook for undergraduate mark descriptors, which will be used to mark your report in conjunction with the mark scheme given below:
Good marks are available for students who not only bring the evidence together convincingly and logically to arrive at a conclusion, but also discuss the credibility of the conclusion they arrive at and how events since 31st December 2019 would impact the conclusion. Higher marks will be available for a critical discussion of the theory and evidence presented.
The memorandum should include:-
· Critical analysis using Beaver’s approach (20 marks)
· Critical analysis using Altman’s approach (20 marks)
· Critical analysis using Argenti’s approach (20 marks)
· Critical discussion and conclusion (20 marks)
Calculations should be in the appendix and the main figures referred to in the memorandum where needed.
The Argenti (A score) analysis should be in the appendix with the main points summarised in the memorandum.
Full marks are available for students correctly applying the Harvard referencing system, and displaying appropriate reading around the subject area (please DO NOT ask staff members how many different sources are required for full marks – there is no right answer, and some sources are more appropriate than others).
Structure, style and overall professionalism
Full marks are available for students who produce a professional memorandum, which is well-structured and of an appropriate tone.