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Financial statement analysis is a method of analyzing a companys real performance with a comparison within an organization over a period of time. This report was centered on analyzing a companys financial activities, performance and investment decision under London stock exchange, calculating relevant ratios and comparison based on the past five years performance of the company, which helps to identify the investor¿½s decision that will determine the performances, strengths and weakness of the company.
1.2 BACKGROUND OF THE PROBLEM
Investors problem in investment decision
A critical knowledge of strategy and analysis of a company are to determine the investor's decision.
1.3 OBJECTIVE OF THE COMPANY
Abcam Company¿½s primary objective is to make an analysis of various investment decision and aim to compare the returns given by various investment decisions. Therefore the scope of the company acquires understanding about becoming a successful profitable company that would maximize a valuable contribution to bio-science researchers with good plans in business. Abcam an antibodies, which are an essential tool for the scientists seeking to recover the secrets of the human cell, which help the scientists to detect proteins and to understand the cellular activity involved in human health and bacteria that cause disease and accommodate future growth and would like to sell and distribute antibodies online with updating data, helpful of individual customer service support and safely delivery.
1.4 LITERATURE REVIEW
In an organization company, some managers have diverse investment decision with the primary objective to achieve goals and performance, also mean a higher rate of return in their investments. Many securities in an organization have current market prices, and are different from their belonging (intrinsic) values. Therefore buying and selling of overvalued securities can achieve good performance for fundamental investors.
Most investors in an organization face necessary importance decision by evaluating and analyzing the risk of the company profile, allocating assets, breaking down of equities and bonds and implementing plans which determine the investment performance of a company, and also maximize their long-term return on investment.
Investment by nature and a potential investor analyze company¿½s financial statements to guide in investment decision, whereas an existing investor will decide whether or not to invest further in the company.
Risk Analysis on Investment Decision
Maximizing the shareholder¿½s wealth is a major objective of a company through investments in real and financial assets. Most companies looks at both various internal and external strategies that include mergers and acquisitions (external strategies) and increasing production from within (internal strategies) and making decision on the type of assets to invest in and strategy which should be used in decision making and applying various valuation techniques in order to see which is most valuable to the company.
1.5 RESEARCH METHODLOGY
The purpose of carrying out this research is to analyze Abcam's financial performance for the past five years, therefore carrying out the research by secondary data which can be collected from different source of information related to the company's website, such as consolidated income statement, and consolidated balance sheet and the director¿½s report. Financial analysis statement is the use of analyzing financial tools and techniques, such data obtained are valuable and useful in financial decision
1.6 LIMITATION OF THE STUDY
¿½ This research report is constrained to Abcam's financial investment decision and ratio analysis for the past five years performance and analyzing the report. Therefore data are collected through secondary sources which compared and analyzed on the basis of performance.
¿½ Time constraints of 5 weeks for this research work
¿½ The limitations of ratio analysis and SWOT analysis apply to the limitation of the study as well
¿½ The analyses performed in this report are meant for Abcam Plc., the results of the report can not be generalized.
¿½ All the data and events collected and used in the report are up to 17th June 2010.
2.0 HISTORY OF THE COMPANY
Abcam plc was found in February 1998 by Jonathan Milner, David Cleevely and Tony Kouzarides known as Chairman of Cambridge of Temperature Concepts Ltd. Abcam plc are producer and distribution of bio-technology company which is generally engaged in researching, developing, antibodies products, marketing and other specific products worldwide. The products are used to identify proteins for sciences of humanity and veterinary sciences, it (Abcam) primarily offers primary and secondary antibodies, proteins, isotype control, peptides, tools and reagents. Also focus its products on the areas of human cancer, cell biology, human nuclear system, stem cells, immunology, developmental biology and microbiology.
Abcam plc is listed in the London Stock Exchange, also among one of the top antibodies biotechnology in Europe, and is recognized as one of the best in antibodies producing company. The company has grown rapidly to over more than 237 employees in the three different countries United kingdom, United state and Japan, now has customers and distribute up to seventy-six countries worldwide.
This analysis involves comparing the present ratios with the past and future ratios of a company which enable investors to determine whether or not there will be any improvement in the financial condition and performance overtime.
3.2 Qualitative Analysis
3.2.1 SWOT Analysis
This is a strategic evaluation method used to evaluate the strength, weakness, opportunities and threats involved in a company (Mullins 2005). This report provides a strategic insight of a company's SWOT analysis, which highlights its strength, weakness, opportunities and threats the company is facing.
The strength of the company's strategy is to focus on sourcing high quality, low cost structure, in house technical expertise and relevant products, aims to operate on a global basis to access new markets and through targeted marketing. The weakness of the company's sterling has contributed to rise through an increase in sterling translated average unit selling prices and have no contracts. The company provides the board with a regular program of tranning opportunities in order to ensure the directors is informed of the role and responsibilities.
In certain economic, Abcam plc sells the best high valued quality antibodies over the internet worldwide with up to date data, safely delivery and helpful of customer service. Abcam will continue to invest more profitability as earnings growth increases and expand more in dividend and shares.
Abcam plc shows that they have strength and ability to present good performance, In some financial year the company faces an decrease of profit and prove that they will have the ability to rise up again and fix the problem using the financial ratio analysis in term to determine their financial performance, therefore investing in Abcam plc is a right decision for investors and it can be measured that Abcam plc had stable and good performance.
Through 5 years financial reporting's analysis, the researcher can make assumption that Abcam plc's overall performance seems the running cost is high, since the company are developing and investing more in the profitability income in 2008 to 2009 have the property to have the loss in the previous years, corporation may raise the fund at the same time through going on the market. Financial statements and financial performance provide useful information for investment decision, there are still much information the company omitted. Factors such technology improvements, changes in price, union activities and government regulations.