Reviewing Financial Statements to Make Investment Decisions

Demonstrate how to review the financial statements of companies listed on the London stock market.

You have recently joined Penco, a small pension fund that aims to invest strategically in low-risk companies with a historically satisfactory return on investment. As a junior analyst, your first task is to review the market and select two companies listed on the London stock market and access their financial statements. You should analyze their financial position using the information from their financial statements and apply appropriate financial ratios. You should make recommendations to Penco to invest. Calculations and financial ratios supporting the recommendation should be appended to the memo for the board’s attention.