Contents

• This report is based on the following requirement -
• You are a financial consultant and your company has been asked to help with the following queries from a client who is considering investing in MDM plc, a medium sized quoted company.
• a) Which ratios should the client use if he wanted to assess the profitability of the company? (Guide approx. 500 words) (20%)
• b) Which ratios should the client use if he wanted to assess the riskiness of the company? (Guide approx. 500 words) (20%)
• 
• c) Your client knows that MDM are considering a project which will cost €200 million. Advise the client on the different possible ways of financing this project, clearly explaining the benefits or otherwise of each method. (Guide approx. 1000 words) (40%)
• The balance of the grade will come from the presentation and the use of proper referencing both in the text and bibliography.

Description

Before making an investment in any business, there is need to ascertain a number of aspects of the business in order to ensure that proper investment decisions are made. The key areas are mainly the performance of the businesses as well as the levels of risks involved in investing in the businesses. There are a number of ratios that can help an investor to know the performance of firms before investing in them. Besides, there are a number of ratios that investors use in order to ascertain the levels of risks involved in investing in the businesses. This paper explores some of the major ratios that are applied in order to assess companies’ profitability as well as the ratios that can be used in assessing the risk levels. At the same time, financing a project or a business is always a very difficult task as huge amounts of capital is needed. Getting capital is very difficult. This paper comes in to offer some of the various sources of finance for new businesses as well as new projects. The paper also offers some of the advantages as well as the disadvantages of each source of funds in order to ensure that the most suitable and less risky source is used in getting the funds.