BM414 Financial Decision Making CW1 | Central Asia Metals (CAML) Plc

Assignment Task

Company Background – Central Asia Metals (CAML) plc.

Central Asia Metals (CAML) plc. is a base metals producer listed on the AIM market of the London Stock Exchange with copper operations in Kazakhstan and a zinc and lead mine in North Macedonia. The company is incorporated in the United Kingdom (based in London) and raised approximately £48 million at IPO in September 2010. This capital was used to build the Kounrad recovery plant in central Kazakhstan. In November 2017, the company completed the acquisition of the Sasa zinc and lead mine in North Macedonia for a total consideration of approximately £315 million.

Assume that the company is now planning to expand further and build another extraction plant in Uzbekistan within the next five (5) years. The company estimates that they would need to raise approximately £120 million for this project.

Task 1

Suppose you are part of the Accounting and Finance team at Central Asia Metals (CAML) plc. You are required to write a report to the senior management team of CAML plc., discussing the importance of accounting and finance functions, roles, and duties within CAML plc concerning both reporting and decision-making aspects. Your discussion should include some examples within the company where appropriate.

Task 2

Using the financial statements of Central Asia Metals (CAML) plc. presented below, complete the following tasks:

1. Provide a brief explanation of the financial statements and their main elements supported by the figures and trends from the statements below.
2. Using the figures presented in these financial statements, calculate the following ratios for each year:

• Return on capital employed
• Net profit margin
• Current ratio
• Average Receivable days/ Debtors collection period
• Average Payable days/ Creditors collection period

Using the results from your calculations, comment on the company’s performance based on the results from and position between the two (2) years from (a), mentioning possible causes, reasons, and effects for the changes in the ratios. In this section, please incorporate the discussion on the company’s performance from an investor perspective, assuming that the company is planning to build another extraction plant in Uzbekistan within the next five (5) years and would need to raise approximately £120 million for this project.