ITE is an organiser of exhibitions and conferences specialising in emerging and developing markets. ITE organises high-quality events of an international standard throughout the 15 countries in which it operates. The business is managed in five main geographic sectors: Russia, Central Asia & Caucasus, Eastern & Southern Europe, UK & Western Europe and Rest of World. As an exhibition organiser, ITE hires venues at which it stages its events and markets the events to both exhibitors and visitors. Exhibitions and conferences provide an opportunity for participants from national and international companies to meet, network and transact business. The exhibition media is the best media for suppliers to display and demonstrate their products to potential buyers. This is particularly powerful in emerging and developing markets where culturally face to face meetings are the norm and where alternative media, B2B publishing and on-line marketing opportunities are less developed.
More information about the ITE group on Blackboard (ITE Annual Report 2014).
You have been asked to advise a group of investors about investing in shares of ITE. You may use information from financial statements of other events companies so as to make comparisons and support your arguments. You should research extensively about ITE and the airline industry overall. The report should follow academic standards and should be well referenced.
you will prepare a 1,400-1,800- word report that deals with the following issues:
a) Write a brief introduction to the assignment and include discussion about the role of accounting information. 10 marks
b) Calculate the gross profit margin and operating profit margin for 2013 and 2014 (4 marks) and discuss the factors that may influence the operating profit margin in events companies and in the particular case of ITE (11 marks). 15 marks
c) Define the concept of trade payables (3 marks). Calculate the trade payables (in days) for 2013 and 2014 (2 marks) –consider that credit purchases is the same as the cost of sales-. Discuss the convenience of increasing the number of days (5 marks). Total 10 marks
d) Calculate the current ratio for 2013 and 2014 (2 marks, 1 for each year) and discuss any reasons for differences in liquidity (8 marks). 10 marks
e) Compare and contrast the usefulness of these two investment ratios for appraising investments: Dividend Yield and Price Earnings Ratio (5 marks). Calculate the P/E ratio and dividend yield for 2013 and 2014 (4 marks) –using the share price at the end of the financial year- and discuss any differences (6 marks). Total 15 marks
f) Define the item “Foreign Exchange gain/loss on operating activities” (4 marks) (4 marks) and discuss any differences between the two years (6 marks) Total 10 marks
g) Prepare at least seven (7) sets of minutes for meetings of the group. Detail attendees, date and time of meeting, outcomes (how work was distributed and contribution of every member). If students do not attend and contribute to the assignment that has to be reflected in the minutes of the meeting and their mark will also reflect that. That means that if there are no contributions and this is recorded, that may cause the student to fail the assignment. Students should attend at least five (5) meetings. Total 10 marks. NOTE: If you have not done the assignment as part of a group you have to write a 400-500 word essay reflecting on the learning and challenges of this module.
h) Based on the evaluation of financial figures that you calculated before, the current business environment where ITE operates, and other items from the financial statements, conclude on the financial return of ITE and conclude whether it is right to sell, hold or buy shares in this organisation. This will be a conclusion to the report. (15 marks)