Assignment Task:
Assignment Tasks:
This assignment task is a written report and analysis of the financial performance of one selected listed company on the ASX in order to provide financial and investment advice to a wealthy investor. This assignment requires your group to undertake a comprehensive examination of a firm’s financial performance based on update financial statements of the selected company.
Background:
You’re a group of investment analysts who work for a large investment consulting firm based in Australia. There’s one big institutional investor from overseas that is interested in investing in the Australian market. You’ve been asked to choose one listed company the industry you think will have the most promising future for investment in Australia, then evaluate the performance of that company. Finally, make a recommendation through your Report to the investor whether and why they should or should not invest in the company.
Create your group’s “business name” under which your group will be providing the financial advisory services. Choose one listed company that your group will investigate/analyse for the purposes of possible recommendation to your client. The group should obtain all information about the selected company from this web site: www.asx.com.au.
Requirements:
Obtain copies of Annual Reports including Income Statements, Balance Sheets, and Statement of Changes in Equity, Cash Flows Statements and Notes for three (3) financial year 2016-2017, 20172018 and 2018-2019. Your group can download these documents from the suggested web site using the firm’s code (example, BHP- for BHP Billiton Company, etc.). The assignment should cover the contents described in Part 1 to 7 bellows.
STAGES TO BE COMPLETED:
1. Description of one key product or service offered by the selected company.
2. Identify and conduct trend analysis with two groups of financial ratios, including liquidity and capital structure of the selected company.
3. Perform a non-current asset analysis
4. Perform a scenario analysis with the data provided.
5. Identify and discuss any latest share or bond issuance by the selected company.
6. Calculate and discuss the PE ratios and share price movement of the selected company through 3 years
7. Recommendation Letter
I. Introduction
Briefly, the introduction of your work: the purpose of the assignment, the selected company, your findings and structure of your assignment (not more than 300 words)
II. Financial Analysis of the selected company
2.1. Description of one key product or service provided by the company
Prepare a brief description of one key product or area of service offered by the selected company. Describe and comment on the importance of the product or service in maintaining the comparative advantages of the company.
2.2. Calculation and analysis of selected performance ratios
Using financial data obtained from current financial statements of your selected companies for the past 3 years. Annual reports are accessible via company websites or ASX website. Your client requests a comprehensive analysis of two groups of financial ratios, including liquidity and capital structure of the company. Choose the relevant financial ratios for your analysis to meet your client’s requirement. Do research to explain the trend of financial ratios of the selected company through 3 years to your client. You need to provide charts and/or tables for analysis and justification.
2.3. Perform a non-current asset analysis:
Analyse the non-current assets of the company through 3 years. Identify the depreciation method applied by the company and discuss how depreciation is treated to identify operating cash flow of a project involving buying a long term asset. Tips: try to do a little research about depreciation and CAPEX to enrich your comments and analysis.
2.4. Perform a scenario analysis with data provided
Assume that your selected company is considering a potential project with a new product that is expected to sell for an average price of $25 per unit and the company expects it can sell 450 000 unit per year at this price for a period of 4 years. Launching this project will require the purchase of a $2 500 000 equipment that has residual value in four years of $500 000 and adding $ 800 000 in working capital which is expected to be fully retrieved at the end of the project.
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