Master program on international finance is for Master student in foreign universities. You are required to prepare/submit an individual report discussing the following:
Choose a Multinational Enterprise (MNE) listed on an internationally recognised Stock Exchange (including for example, London, Dublin, New York or Paris). You are required to:
a. Critically discuss two recent developments in the international financial environment which appear to have impacted on your chosen company’s recent performance and development. Analyse how these two developments are likely to impact on the company in the near future. (14 marks)
b. Discuss the following key elements of the MNE’s international financial and/or risk management strategy (and how they appear to have affected the financial performance of your chosen company): · Sources of finance · Dividend policy (14 marks)
c. With reference to your chosen Multinational Enterprise (and using the most recent annual report published), analyse the financial performance (in terms of profitability, liquidity, efficiency and investment) of the company in the two most recent consecutive financial periods (e.g. 2018/19 or 2019/20, ) using 8 different accounting ratios (prior year comparative figures will be available in the annual report). (32 marks).
Notes:
(i) You must advise your tutor of your chosen multinational enterprise to ensure suitability for use and avoid duplication
(ii) It is advisable to choose your multinational enterprise and download the most recent annual report. This will facilitate your preparation and allow you to effectively participate in weekly class activities;
Master program on International finance Guidelines 1)
The assignment may take the form of an individual written word-processed briefing report of not more than 2500 words, including title page, contents page, in-text references and citations, but excluding tables, reference list and appendices
Part of Solution to the Question
1 Introduction
Honda is a Japanese company that specialize in the manufacturing of automobiles, motorcycles and power equipment with headquarter in Tokyo, Japan (Honda, 2021a; Forbes, 2021). Honda made a net profit of ¥509,932 million and ¥695,444 million in 2020 and 2021 years respectively.
Honda is ranked 39 among the top 100 companies in the Fortune Global 500 list (Fortune 500, 2021). The financial performance and developments are analyzed, explained and outlined, including how it copes with the risks linked with its sources of finance and dividend policy.
2 Section A: Current developments
2.1 Development One—Covid-19 Pandemic
The covid-19 pandemic impacts the financial performance of Honda to the extent that its production activities were affected (Honda, 2021a).
2.2 Development Two—Chip Shortage
Honda was affected by the global microchip shortage. This caused Honda and other major brands to slowdown vehicle production and caused sales drop by 50%. This development made Honda to have low inventory and prompted their prices to rise (Hesketh, 2021). Over 100,000 vehicles were affected last years due to this chip shortage (Reuters, 2021).
Abstract: This study examined the impact of Audit Quality and Financial Performance of Quoted Firms in Nigeria. The study spanned from 2000-2017 which is 18 year period. The independent variable is audit quality which is proxy with auditor’s independence, audit size and audit committee while the dependent variable is Financial Performance and proxy with earnings per share and return on asset. Three firms were chosen for this study, which are: Unilever Nigeria Plc., Oando Plc. and C & I Leasing Company. Time series data were used and gotten from annual report and account of the firms under study. The study applied Ordinary Least Square (OLS) estimation technique through E-view 7.0 version. The result revealed that for model 1 Company is below 5% significant level. The study thereby concludes that audit quality does not have significant impact on returns on asset of quoted firms in Nigeria. The study recommended that management of quoted firms in Nigeria can improve the financial performance and audit independence of their firms by increasing the amount of audit fees paid to the audit firm. This might seem like a profit reducing decision in the short run, but the benefits it will bring to the firm far outweighs the cost. Also management of quoted firms should employ the services of one of the Big 4 audit firms because their character and integrity is beyond question.
This study investigated the relationship between carbon emission and economic growth in Nigeria for a period ranging from 1981-2018. The proxy for carbon emission is carbon dioxide CO2 and the proxy for economic growth is gross domestic product. The study used causal research design to mobilize data from the World Bank and Fact Fish publications while gross domestic product is sourced from the Central Bank of Nigeria Statistical Bulletin. The methods of descriptive statistics, Phillip-Perron, dynamic ordinary least Square and bivariate granger causality test are employed to analyze the data. The results show evidence of autoregressive effect of previous records of gross domestic product on its future value; there is an inverse relationship between carbon emission and gross domestic product. The bivariate granger causality confirms no existence of causality running between the variables. On the basis of the findings, the study concludes that there is an insignificant and negative relationship between carbon emission and Gross domestic product. It also concludes that CO2 and GDP are causally neutral to each other. It therefore recommends that earnest effort should be made by government to reduce greenhouse gas (GHG) in Nigeria by adhering to all relevant protocol and standards. Emissions not connected to the production of industrial and consumer goods should be taxed and avoided completely except the inevitable domestic emissions by practically applying the necessary laws both national and international. Precisely, focus should be shifted to going green in terms of energy generation, ensuring positive multiplier effect of constant power supply and the economics of clean air on the human health and productivity.
This a type of survey method that involves repeated interviews of a group of people over a specific period of time. It is used to track progress or evolution over time. In other words, when you study Net Profit Margin (NPM) of banks (Say 4 banks) over a period of time (2018 -2020)
You data will look like this:
Banks
Time
NPM
FCMB
2020
50%
FCMB
2019
55%
FCMB
2018
51%
First Bank
2020
60%
First Bank
2019
70%
First Bank
2018
55%
Fidelity Bank
2020
45%
Fidelity Bank
2019
50%
Fidelity Bank
2018
60%
Zenith Bank
2020
80%
Zenith Bank
2019
70%
Zenith Bank
2018
75%
Longitudinal Survey
It is another word used to describe panel survey. It refers to any study that examines the same group of people over a period of time.
Cross-sectional survey.
This is refers to data collected by observing many subjects such as individuals, firms, countries at the same point in time or without regard to differences in time. Here data is obtained at a particular point in time. The analysis of cross-sectional data usually consists of comparing the differences among the subjects. For example, if you are studying the net profit margin (NPM) of four banks in 2020 only. You will have a data that look like this:
Banks
Time
NPM
FCMB
2020
50%
First Bank
2020
60%
Fidelity Bank
2020
45%
Zenith Bank
2020
80%
This is what we called cross sectional data study since you are studying Banks at a particular point in time (2020).
