Assignment

HI5002: Finance for Business 

Group Assignment

(Case Study)

Trimester 2018

Unit Code: HI5002

Unit Name: Finance for Business

Due Date:

Friday 17:00, Week 10 

Value: 30 %

Venue: HOLMES Institute 

1 group: Max 4 students

Length: Max 3000 words 

Description

Students are required to form a group consisting of 4 students (max). The group is required to study, undertake research, analyze and conduct academic work within the areas  of  business  finance  covered  in  learning  materials  1  to  10  inclusive.  The assignment should examine the main issues, including underlying theories, implement performance measures used and explain the firm financial performance. Your group is strongly advised to reference professional websites, journal articles and text books in this

assignment (case study).

Required:

This assessment task is a written report and analysis of the financial performance of a selected company in order to provide financial advice to a wealthy investor. It will be based on financial reports of a listed company on the ASX . This assignment requires your group to undertake a comprehensive examination of a firm’s financial performance and must be submitted by Week 11  

STAGES TO BE COMPLETED

Create your group’s “business name” under which your group will be providing the financial advisory services.

Choose a 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

Please note: Each group can only choose 1 company and once the company has been chosen, the other group can not choose the same company (in other words, the latter group has to choose another company that hasn’t been chosen by other groups). First come first served rule applies here, it means let your lecturer knows asap which companies your group want to discuss, your lecturer can check whether your chosen companies are still available or not and finally register your chosen company with your Lecturer

Your group MUST: 

^Ø Obtain a copy of the last Financial Statements including Income Statements, Balance Sheets, Statement of Changes in Equity, Cash Flows Statements and Notes. Your group can downloaded these documents from the suggested web site using the firm’s code 

(example, BHP- for BHP Billiton Company, etc).

(Part 1 to 10)

1           A description of the company  (Part 1)

2           Identify your company (in terms of the ownership-governance structure)  (Part 2 i & ii)

3           Calculation of Performance Ratios (Part 3 i, ii and iii)

4          Two graphs from www.asx.com.au with the description of results (Part 4 i & ii)

5           Identify any significant factors which may have influenced the share price of your company. (Part 5)

6           Calculation of ’ beta values and expected Rates of Return using the CAPM (Part 6 i, ii & iii)

7       Weighted Average Cost of Capital (WACC) (Part 7 i & ii)

Using the debt ratios for your company over the past two years, emphasise any improvement

₈           towards the maintenance of a preferred optimal capital structure. (Part 8 i & ii)

9           Dividend Policy (Part 9)

10         Letter Recommendation (Part 10)

11         Formal structure   (Part 1 to 11)

Final Submission of Complete Assignment on Blackboard

QUESTIONS

Your group is an investment adviser, working to build a foundation of wealth for your clients. One of your wealthiest clients already has a diversified portfolio, which includes managed funds, property; cash/fixed interest and a few direct share investments in Australia and around the world.

The assignment is a written comprehensive report and analysis of the firms’ financial performance (including referencing). 100 marks

Your group is required to do the following tasks:

1.     Prepare a brief description of the company, outlining the core activities, the market(s) in which it operates within and any factors in the companies’ history which you consider help present a “picture” of your company. 4 marks

2.     Specify ownership-governance structure of the company:

i)   Name the main substantial shareholders:

^Ø With higher than 20.00% of shareholdings. Based on this argument you should classify a firm as a family or non-family company, and ^Ø With higher than 5.00% of shareholdings. 3 marks

ii)   Name the main people involved in the firm governance:

^Ø The Chairman ^Ø

Board members ^Ø

CEO.

o Whether any of these people have the same surname as any of substantial shareholders (>20% share capital). If yes- you could use this as an argument for the presence of an owner or family member(s) in the firm’s governance. o Whether any of shareholders with more than 5% share capital are involved in firm governance. 3 marks

3.     Calculate the following Fundamental Ratios for your selected company for the past 2 years. Annual reports are accessible via company websites:

-          Short term solvency (Liquidity ratios)

-          Long term solvency (Financial Leverage ratios)

-          Asset utilization (efficiency or turnover ratios)

-          Profitability ratios

-          Market value ratios 20 marks