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INTERNATIONAL FINANCIAL REPORTING
AND ANALYSIS

INDIVIDUAL assignment

To be submitted by Tuesday April 20th

1.  Prepare a report on the financial performance and equity value of easyJet at the end of 2009.  You should provide an analysis of easyJet’s recent financial performance for the period 2007-2009 using the 2008 and the 2009 annual report and accounts and then use this information, together with any further information you consider relevant, to forecast easyJet’s financial performance over the next five years. Your valuation analysis should make use of the abnormal operating profit valuation model and the free cash flow valuation本Assignment由代写Assignment网www.51lunwen.org提供  model to estimate easyJet’s share price at the end of 2009 and should include sensitivity analysis showing how your valuation is affected by variation in forecast assumptions.  Your report should include a full discussion of issues raised by your analysis of easyJet’s past financial performance and your estimation of its share price, together with a ‘buy-sell’ recommendation for the share.
(60 marks)

2. In his article ‘On the balance sheet-based approach to financial reporting’(CEASA 2007), Ilia Dichev argues that the current focus of accounting standard-setters on a balance sheet approach to the development of financial reporting is not consistent with the information needs of equity investors.  Explain and evaluate his critique of the balance sheet perspective on financial reporting and his view that an income statement-based approach would be preferable. Your analysis should include a discussion of the extent to which the valuation models covered on the module and the research literature on the relevance of accounting information for equity valuation support or challenge his view on the superiority of an income statement-based approach to financial reporting.
   (40 marks)

Word limit 3,500 words

Please note that this assignment is subject to final agreement with the external examiner.  This confirmation should be received very shortly.