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Question: Analyze the Financial Management of the UAE. Answer: Introduction: This report has been prepared to analyze the financial management of the UAE market. For analyzing the financial performance of the UAE market, an international company as well as a UAE company has been analyzed and the performance of the UAE market has been analyzed through comparing both the companies. This report would focus over various financial analyses such as capital budgeting, capital structure, stock and bond decision and cost of capital. National Takaful: National Takaful is an UAE company which is operating its business into ABU DHABI. This company is operating its business through 6 branches in ABU DHABI market; the main business of this company is to offer the health insurance to its clients. This company came into existence in 2011 and currently it is only providing its services into domestic market (Home, 2017). Marshall Motor holdings plc: Marshall Motor Holdings plc is an England company which is operating its business into international market. This company has registered its stock into London stock exchange; the main business of this company is to offer new automobile products and services. This company came into existence in 20th century and currently it has diversified its market into 25 countries to enhance the market share of the company (London Stock exchange, 2017). Capital budgeting: Capital budgeting is a process which is used by the companies to analyze various investment opportunities on the basis of the companys requirement. Capital budgeting techniques of both the companies would be affected through various variables which are NPV rate, inflows and size of the investment opportunity (Gurufocus, 2017). NPV rate of both the companies could not be similar; the size of investment would be higher in case of Marshall. Financial analysis and forecasting: Further, financial analysis and forecasting over both the companies have been done to identify the financial strength and position. For this study, ratio analysis has been done over both the companies to evaluate the liquidity position, profitability position, financial structure position and efficiency position. Through the 5 year analysis over both the companies, it has been found that the profitability position of Marshall is much stronger than the NATIONAL TAKAFUFL PLC (Morningstar, 2017). Through the further analysis, it has been found that the NATIONAL TAKAFUL is required to manage the liquid position in the industry as well as in the market. The liquid position of the company depict that company is not even able to pay half of the current debts. More, it has been investigated that the efficiency position of the company is nil which depict that the company do not use the receivable and payable policies to manage the cash. But it is required for every organization to manage the level so that the sales of the company could be enhanced (Morningstar, 2017). More, the debt structure of the comapny depict that the debt equity and debt asset structure of NATIONAL TAKAFUL is quite competitive. Company has managed the debt and equity in such a manner that return and risk both the factors of the company could be controlled. Stocks and bonds decision: More, the study has been done over the bond and stock decision of the company. Through this analysis, it has been found that both the companies had not issued any bonds to raise the funds. Still, the risk free rate off both the companies is quite different to each other. The risk free rate of London stock exchange is 2.77% whereas the risk free arte of ABU DHABI is 3%. This depict that the risk free rate of Abu Dhabi market is much better than international market. More, it has also been found that the stock position of Marshall is better than NATIONAL TAKAFUL due to various strategies and better position in the international market (Guru focus, 2017). Capital structure: Capitals structure of a company depict about the sources through which the comapny has raised long term funds. Capital structure analysis depicts about the level of the risk and return in an organization. Through this analysis, it has been found that capital structure of NATIONAL TAKAFUL is as follows: Price Cost Debt 243766000 0.035 Equity 79175000 0.05038 322941000 This capital structure depict that the debt of the company is much higher than the equity of the company (Gulf Base, 2017). Company is required to enhance the level of the equity to manage the risk and return, both the factors of the company. Following are the capital structure position of the MAARSHALL MOTOR HOLDINGS PLC: Price Cost Debt 8912000 0.053 Equity 145638000 0.05017 154550000 This capital structure depict that the equity of a company must always be higher than the debt of the company to save the company from any kind of sudden risk (Morningstar, 2017). Cost of capital: More, the cost of capital of the company has been analyzed to identify the level of the total cost of both the companies. Following are the statement of cost of capita of the company: Calculation of WACC of National Takaful Price Cost Weight WACC Debt 243766000 0.035 0.75483 0.02642 Equity 79175000 0.05038 0.24517 0.01235 322941000 Kd 0.03877 Calculation of WACC of MARSHALL Price Cost Weight WACC Debt 8912000 0.053 0.05766 0.00303 Equity 145638000 0.05017 0.94234 0.04728 154550000 Kd 0.0503 Through the above tables, it has been analyzed that the cost of capital of National Takaful is lower than the MARSHALL. This has taken place due to the fact that the debt level of National Takaful is quite higher than the equity and the cost of debt o the company is quite lower (ADX, 2017). Though through the analysis, it has been found that company is required to manage the level of the debt and equity so that the risk factors of the company could also be controlled. Corporate governance and agency problem decision: Through the study over corporate governance, it has been analyzed that Marshall of following various rules and regulations to save itself from any legislations and further, the corporate governance polices of the Marshall is much better. Marshall has to perform its business into the international market and thus it is required for the company to manage the level of the corporate governance. The corporate governance level of the NATIONAL TAKAFUL is not that much bigger and various agency issues could be faced by the company due to its policies (Home, 2017). Conclusion: Through the evaluation over Abu Dhabi market and the international market, it has been analyzed that the financial position of the Abu Dhabi is quite lower than the international market. This market is required to work over various factors and policies to enhance the level of the financial strength and position. Abu Dhabi market is required to manage the liquidity position according to the standards to save itself from short term debt obligation. Further, the market must enhance the turnover so that the profit position of the company could be better. More, through the analysis, it has also been analyzed that the company of Abu Dhabi market, National Takaful is not at all performing good in concern of the managing the funds and making a good financial position of the company. More, it has also been found that the Abu Dhabi companies must make the policies and strategies according to the international companies so that their financial position could also be strong. References: ADX. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://www.adx.ae/English/Pages/default.aspx available as on 20th Nov 2017. Bloomberg. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://www.bloomberg.com/quote/TKFL:UH available as on 20th Nov 2017. Gulf Base. (2017). Market Indices. Retrieved from https://www.gulfbase.com/research-report-6173 available as on 20th Nov 2017. Gurufocus. (2017). London stock exchange. Retrieved from https://www.gurufocus.com/term/wacc/LDNXF/Weighted+Average+Cost+Of+Capital+%2528WACC%2529/London+Stock+Exchange+Group+PLC available as on 20th Nov 2017. Home. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://takaful.ae/en/about-us/overview/ available as on 20th Nov 2017. Index (2017). Insurance industry. Retrieved from https://www.takaful.ae/english/index.aspx available as on 20th Nov 2017. London stock exchange. (2017). Marshall Motor holdings plc. Retrieved from https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB00BVYB2Q58GBGBXASQ1.html available as on 20th Nov 2017 Morningstar. (2017). Marshall Motor holdings plc. Retrieved from https://financials.morningstar.com/ratios/r.html?t=MSLH available as on 20th Nov 2017 Morningstar. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://financials.morningstar.com/income-statement/is.html?t=WATANIAregion=are available as on 20th Nov 2017.