An Analysis into the Extent of Financial Leverage within the UK Food and Drink Industry – Identifying Potential Communication Problems between Senior Management and Investors
Financial Leverage MBA Dissertation – The purpose of this MBA dissertation was to understand the relationship between the share price and borrowing levels and how these variables interact. The MBA dissertation also focuses on how the senior management attempts to communicate sensitive financial performance to key shareholders of prominent food and beverage organisations within the UK.
To achieve the dissertation objectives, a theoretical framework was formulated and discussed along with a critical analysis of existing literature. In the literature review, concepts and views of related stakeholders including bondholders, shareholders and the senior management were taken into account. The contrasting types of debt were also discussed in the literature review along with the mediums used by the senior management and the shareholders for the purpose of conducting effective communication. The key findings unearthed suggested that regardless of which source of debt is taken, the shareholders negatively responded to it. It was also established that an inverse relationship between the share price and borrowings exists.
The share prices decreased when borrowing levels increased and the share prices increased when the borrowing levels decreased. This MBA dissertation recommends that proper focus on the development of effective communication channels between the company management and its shareholders is key to achieving better financial performance and transparency.
- 15,000 words – 56 pages in length
- Good use of literature
- Good analysis of subject area
- Well written throughout
- Excellent MBA Project
- Ideal for MBA and business students
Justification for Research Aim
Rationale for Choosing Companies
Research Aim and Objectives
2. Literature Review
Theoretical Approaches to the Relationship between Financial Leverage and Share Price
Potential Conflict of interest between shareholders, bondholders and senior management
Types of debt
Convertible versus straight debt
Secured versus unsecured debt
The effectiveness of investor communications
The UK Food and Drink Sector – What do we know about leverage and share price?
Gap in research
Justification for Research Approach
Data Collection Strategy
Validity and Reliability
4. The Analysis and Findings
Tate & Lyle
Associated British Foods
5. Conclusion and Recommendations