Analysis of Annual Reports for Personal Investment

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Topic: Analysis of Annual reports for personal investment
1.Executive Summary

Assignment Background:

In this assignment, I take the role of an investor looking to invest an amount of USD 50,000 in the capital of a public limited company.

To wisely invest, one needs to do a thorough comparative study of the annual reports, stock market performance, news, strategies, vision of the companies, etc to reach a conclusion.

I have taken up two companies in the financial sector – namely, Amlak Finance PJSC and Tamweel PJSC for this study. Currently, I am working in Dubai in the IT sales sector and both these companies are my customers and they are heavily investing in IT security. This is the reason for my special interest in investigating these companies.

Both Amlak and Tamweel are leading financial organizations in the UAE, especially prominent in property finance. There is a lot of competition between these companies and also they are both listed in the stock market. Another reason for my interest in investing in these firms is that the Dubai real estate market is currently booming. People have started to invest heavily in the properties sector of Dubai and there is more demand than supply. “Property prices in Dubai look set to rise between 5% and 10% next year, according to a new report, as delays in housing projects means pent up demand remains unfulfilled. Prices will peak in the second half of 2008”

I have studied the annual reports of both Amlak Finance and Tamweel extensively for the past 2 years – (2007 & 2006). I understand both these companies are showing signs of positive growth. I have relied on ratio analysis to calculate and understand the numbers, at the same time I have looked at the vision and mission of these companies, the leadership and management initiatives for the future to come to a conclusion.

From my study, I have eventually found that both Amlak Finance and Tamweel are running in profit but have their own advantages and disadvantages, I have decided to split my investment of USD 50,000 amongst both these companies as I feel that this would reduce my risk at the same time, maximize my return on investment.

I see that as of 2007, Tamweel is more promising than Amlak. However, the market price of Amlak’s shares is cheaper. Consequently, I have decided to invest USD 20,100 in Amlak Finance and USD 29,100 in Tamweel.

I have justified my decision on the basis on the following:
1.Signs of future growth as obtained through ratio analysis. 2.Company performance and growth rate till date.
3.The profitability of the company year on year (Net profit or loss) 4.The creditor’s and the debtor’s position.
5.The ratio of current assets to that of the liabilities
6.The earnings per share
7.Weather the company is running on loans from banks or whether it is working on it’s own capital. 8.Vision and strategy of the management.
9.Current growth of the property market in Dubai.
10.Future growth plans for the property market in Dubai.
11.Company acquisitions and growth strategies… etc to name a few.

Table of Contents
1.Executive Summary1
2.Analysis of the financial posture and annual reports4
3.Ratio Analysis11
4.Analysis of tabulated results and other observations14
5.Summary / Conclusion15
6.References & Bibliography16

As an investor, I have obtained the annual reports of both Amlak Finance and Tamweel. They are publically available on the Internet. I would like to give a brief on the Annual reports of both these firms. 2.Analysis of the financial posture and annual reports

Amlak Finance

Amlak Finance started it’s operations in 2003 and it has had a consistent track record of growth and expansion. I still remember that when I came to Dubai in 2005, they were a small organization with about 70 employees and they had only one...
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