The Business and Financial Analysis of Maldives Industrial Fisheries Company Limited

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OXFORD BROOKES UNIVERSITY

RESEARCH AND ANALYSIS PROJECT

The Business and Financial Analysis of Maldives Industrial Fisheries Company Limited

From 1st January 2006 to 31st December 2008

Prepared by:

Word count: 6486 words

TABLE OF CONTENTS

EXECUTIVE SUMMARY5

PART 1

PROJECT OBJECTIVES AND6

OVERALL RESEARCH APPROACH6

1.1Intoduction6

1.2 Selecting the Topic6

1.3 Reason for Choosing “Mifco”6

1.4 Principal Activities (Mifco)7

1.5 Project Aims and Objectives7

1.6 Research Questions8

1.7 Overall Research Approach8

1.8 Conclusion9

PART 2

INFORMATION GATHERING AND10

ACCOUNTING/BUSINESS TECHNIQUES10

2.1 Introduction10

2.2 Sample Design and Data Collection10

2.2.1 Primary Data10

2.2.2 Secondary Data10

2.3 Difficulties Encountered11

2.4 Accounting Techniques and Business Models11

2.4.1 Accounting Ratio Analysis12

Limitations of Ratio Analysis12

SWOT Analysis13

Limitation of SWOT Analysis13

PEST Analysis14

PEST Analysis15

Limitations of PEST analysis15

2.5 Conclusion15

PART 3(a)

RESULTS AND ANALYSIS16

3(a).1 Financial View16

3(a).1.1 Profitability16

3(a).1.2 Capital Structure21

3(a).4 Liquidity and cash flow23

3(a).5 Asset Utilization25

3(a).2 Business View26

3(a).2.1 Bargaining Power of Suppliers26

3(a).2.2 Bargaining Power of Customers27

3(a).2.3 Threat of New Entrants28

3(a).2.4 Substitute Products28

3(a).2.5 Competitive Rivalry29

3(a).3 Industry Analysis using PEST29

3(a).3.1 Socio-Cultural29

3(a).3.2 Pole and Line Fishing (Technological Aspects)29

3(a).3.3 Protecting Environment (Political and Socio-Economic)30

3(a).3.4 Investing Human Capital (Political and Economic)30

3(a).3.5 Privatization Policy (Political)30

PART 3(b)

CONCLUSION AND RECOMMENDATIONS32

3(b).1 Conclusion32

3(b).2 Recommendations33

REFERENCES34

APPENDICES35

EXECUTIVE SUMMARY

The report will be based on study carried on business and financial performances of Maldives Industrial Fisheries Company Limited (Mifco) to assess the impact of opening the industry to private sector after very long period of time as a state owned monopoly. The analysis is based on Porter’s five forces model. It is mainly focused on threats the company faces and barriers placed to sustain as the market leader. As a conclusion of the study there are not many threats from competitors and there are some factors which influenced the company’s performance.

Among those factors the main factor which affected the company’s profitability was the declining of the amount of fish landed (low fishing). And the other factors include the increasing of fuel price and the increasing the price of production materials. Company imports most of the material which is used for production. So the implementation of a cost cutting strategy due to low fishing and high fuel cost became necessary. This cost cutting strategy proved to be successful.

PART 1

PROJECT OBJECTIVES AND

OVERALL RESEARCH APPROACH

1 Intoduction

This research project is prepared and to be submitted to the Oxford Brookes University in order to obtain Bsc (Hons) in Applied Accounting degree. The project is based on analyzing a company’s three year performance using financial ratios and business models. As this is the first part of the project, it would cover the reasons and rational behind selecting the particular area and topic. It would also state why the particular company is selected, the objectives of the research and the overall approach that would be employed in collecting, summarizing and analyzing the data.

1.2 Selecting the Topic

Among the different topic areas, topic 8 'The business and financial performance of an organization over a three year period' is chosen since it is one of the areas where I have...
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