Find a local business who will provide you with important financial Information in regards to that business (balance sheets, income statements, cash flow statements, etc.), subject to strict confidentiality agreements it.

Approach the business and explain your intention and how important it is to your final Business Management grade (25% of two year's work!).

Ask them to help you with coming up with the research question.

You need a nice, tightly focused and uncomplicated research question.

For example,

Should Company X finance the construction of the new mall through a bank loan or through increasing share capital?

Research the business and prepare a list of questions that can be emailed to your contact people that will enable you to receive an excellent overview of what the business is, who the business is, what it does, how it does it and how well it does it.

Email this list of questions, wait for a reply and follow up with a very brief list of questions to qualify any further clarifications you feel are important (keep records of all of this - they will be included in your final report).

Book an interview time with the central players in that business.

Conduct an interview where you will gain an outstanding overview of what the business is and what it does with the owners / partners / senior managers.

Perform a SWOT and a competitor's analysis with them (keep records of this - they will be included in your final report).

Ensure that the SWOT points to the research question - this will enable you to provide the rationale for the research project.

Begin Activity 2 - your research proposal.

Research question example: 

Should Company X finance the construction of the new mall through a bank loan or through increasing share capital.

Checklist:

1. should
2. or
3. financial analysis

Company X is commencing planning for the production of a new mall and are unsure how best to finance the investment. Carrying out this report will enable Mrs X, owner/partner/director/manager, to examine the effect the two options will have on the financial performance and position of the company and see how each may impact future planning and decisions, enabling her to make a more informed decision.

Key Areas of Syllabus

• 3.1 Sources of Finance

• 3.4 Forecasting

• 3.6 Ratio Analysis

• 1.6 Organisation Planning Tools

Checklist:

1. What the decision is
2. Why is it important 
   ie. why is the company considering the decision

Both quantitative and qualitative techniques will be used in order to provide a sound recommendation, however, the topic in question being a financial matter, emphasis on financial techniques will be apparent. Non-financial techniques examined will include a:

	A: SWOT
	B: Average rate of return analysis
	C: Lewin's Force Field analysis (nb., an excellent tool for turning qualitative data into quantitative)
	D: Ratio analysis (e.g., earnings per share, gearing ratio)
	E: Cash Flow analysis

- SWOT in order to get a feel for the business and to examine both internal and external factors that may influence the decision and

- Force Field Analyses to identify the driving and restraining forces associated with each option.

Financial techniques utilised will include:

- Ratio analysis to evaluate the expected impact each option will have on the financial performance and position of the firm.

Forecasting will be used to examine the predicted financial situation each option will instigate.

Checklist:

1. Emphasis on financial analysis
2. Use of financial analysis is justified
3. SWOT and FFA as qualitative techniques
4. Quantitative techniques justified

Primary Research:

Amended Guidance 2020

HL students may now use a combination of secondary sources e.g. financial statements and some primary sources e.g. interviews. Primary data must still be significant. Only collecting primary data from customers or other stakeholders, without contacting the organisation itself, is inappropriate. Selected and collected data must continue to contribute to the analysis and evaluation, conclusion, recommendations and reflection as required for this task.

Example 1: Interview owner/partner/director/manager of Company X in order to obtain information regarding the business, the impending decision and the current and predicted financial position of the business.

Example 2: Interview owner/partner/director/manager in order to obtain a second perspective on the matter, opinions as to the ideal capital structure and financing options, and to attain second quantitative and qualitative forecasts to see whether they correlate with those of the first interviewee.

Checklist:

Interviews fulfil the requirement of primary research

Ensure that some parts of each interview are targeted at different areas

Make sure they are justified

Secondary Research:

Example 1: Review Company X’s Annual Reports to examine, using ratio analysis, their current financial position, any apparent trends over time, and enable investigation as to how the financial situation of the firm will be affected by each option.

Example 2: Interview a ANZ Banker to obtain a prediction regarding future interest rates on loans; enabling analysis of options in light of interest rate changes.

Example 3: Review a range of textbooks and credible websites related to sources of finance, especially regarding the advantages and disadvantages of each source of finance to be examined to this business.

Checklist:

Source of financial information identified

What you will do with the financial information

Establish what you want from your other secondary research

Justified

Checklist:

1. Common problems and solutions
2. There may be specific problems associated with your business and research

Checklist:

1. The date is on the timeline
2. Your plan includes all tasks and dates you need complete
3. Modifications are best left to date changes but sometimes modifications need to be shown.

You will need to prepare a proposed timeline for getting the research and report prepared. 

Here is an example of how this may look:

TIMELINE