by means of criticism, logical argument, and interpretation of data…

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HC2091: Finance for Business
Trimester 3 2018
Group Assignment
Assessment Value: 30%
Due Date: Sunday 23:59 pm, Week 10
Group: 2 – 5 students
Length: 3000 words ± 10%
INSTRUCTIONS
Students are required to form a group to study, undertake research, analyse and conduct academic work within the areas of business finance covered in learning materials Topics 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).
Tasks
This assessment task is a written report and analysis of the financial performance of a 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 chosen companies.
Group Arrangement
This assignment must be completed IN Group. Each group can be from 2 to maximum 5 student members. Each group will choose 1 company and once the company has been chosen, the other group cannot choose the same company. First come first served rule applies here, it means you need to form your group, choose on company from the list of ASX and register them with your lecturer as soon as possible. Once your lecturer registers your chosen company, it cannot be chosen by any other group. Your lecturer then will put your group on Black Board to enable you to interact and discuss on the issues of your group assignment using Black Board environment. However, face to face meeting, discussion and other methods of communication are needed to ensure quality of group work. Each group needs to have your own arrangement so that all the group members will contribute equally in the group work. If not, a Contribution Statement, which clearly indicated individual contribution (in terms of percentage) of each member, should be submitted as a separate item in your assignment. Your individual contribution then will be assessed based on contribution statement to avoid any free riders.
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Submission
Please make sure that your group member’s name and surname, student ID, subject name, and code and lecture’s name are written on the cover sheet of the submitted assignment.
When you submit your assignment electronically, please save the file as ‘Group Assignment- your group name .doc’. You are required to submit the assignment at Group Assignment Final Submission, which is under Group Assignment and Due Dates on Black Board.
Submitted work should be your original work showing your creativity. Please ensure the self-check for plagiarism to be done before final submission (plagiarism check is not over 30% of similarity, except the cases where the similarity is reflected by using the same format of Holmes’ assignment, the same references or sources of data) in accordance with SafeAssign Student Guide in Black Board. Please note that it takes 48 hours for the self-check report to be available for your viewing.
Always keep an electronic copy until you have received the final grade for the Unit. Please make sure that you submit the correct file. Any appeal relating to submitting wrong files after the deadline will not be considered.
Deadlines
Registration of groups and chosen companies: 5 pm Friday, Week 4
Final Submission of Group Assignment: Midnight (23:59 pm.) Sunday, Week 10
Late submission incurs penalties of 5 (five) % of the assessment value per calendar day unless an extension and/or special consideration has been granted by the lecturer prior to the assessment deadline.
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 a listed company in Australia (in the industry you think will have the most promising future for investment) then evaluate it and give your client financial advice on whether or not she/he should include the share of that company in her/his investment portfolio.
Required:
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.
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Obtain a copy of the last two financial years (2016-2017 and 2017-2018) Financial Statements of the chosen company (annual reports are accessible via company websites). Your group can downloaded these documents from the suggested web site using the firm’s code (example, BHP- for BHP Billiton Company, etc.).
1.Description of the companies
Prepare a brief description of the selected company, outlining the core activities, competitive advantages, and the market in which it operates within and any factors in the company’s history which you consider help present a “picture” of your chosen company.
5 marks
2.Calculation and analysis of financial ratios
Using financial data obtained from current financial statements of your selected company for the given 2 years to calculate the following ratios and present them in relevant charts or tables. Provide analysis on the company performance and justify your opinions using the data:
– Liquidity ratios
– Profitability ratios
– Market value ratios
5 marks
3.Graphs and comparison of share price movements
Using the information from the ASX website: www.asx.com.au to prepare one or more graph displaying movements in the monthly share prices over the last two years for the chosen company that you are investigating.
Providing an analysis to compare the movements in the companies’ share prices to the All Ordinaries Index. For instance, whether your selected company price trend is more or less volatile compared to the index? How closely it is correlated with the All Ordinaries Index, above or below the index?
Do a research to identify the factors that affected the share price movements of the company within 2 years.
5 marks
4. Calculation cost of equity
1. Go online to http://www.reuters.com/finance/stocks/ and type in the code for your company into the Search Stocks field and click on the magnifying glass button.
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What is the calculated beta (ß) for your company?
If the risk free rate is 6 % and the market risk premium is 7 %, use the Capital Asset Pricing Model (CAPM) (SML approach) to calculate the required rate of return for the company’s shares.
5 marks
5. Identify the capital structure
2. Identify and discuss the capital structure of the company by calculation capital structure ratios and weights of debts and equity capital. Comment on any change in the company’s capital structure through years. Support your comments and analysis by further research.
5 marks 6. Consulting Report
After completion of your analysis, you need to present a well-structured report to your client using appropriate style and language. Structure of the Report: will include: 1. Title 2. Introduction 3. Table of Content 4. Body (in text citation: paraphrased or quotation to support your arguments) 5. Conclusion 6. Recommendation 7. Reference lists (Harvard Style)
5 marks Academic Writing, Referencing and Plagiarism Presentation of written work The report must have an academic written structure including an introduction, body and conclusion. ? Use numbers to structure body of the report (e.g., “2.5. Research via the internet”). ? Provide an explanation on each of these issues (points) and explain how they confirm the underlying financial management theory. ? You are required to use Times New Roman font, size 12 with 1.5 line spacing. ? Please insert page numbers into your assignment and use 3 cm margins. A high standard of work is always expected, so poorly presented work may be returned unmarked with a request to re-submit.
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Referencing When writing your assignments, a reference must be included every time you use someone else’s ideas or information. In-text referencing of ALL sources, whether academic books, journal articles, newspaper articles, material from the Internet etc., must be cited in the main text of the assignment itself. Harvard Style referencing is required for this assignment. A reference must be included when you: • Paraphrase (express someone else’s idea in your own words). • Quote (express someone else’s idea in their exact words). • Copy (financial statement, reproduce a diagram, graph or table from someone else’s work). Example: Titman, S., Martin, T., Keown, A.J., Martin, J.D, Financial Management: principles and applications, 7th Edition, Pearson Education, Melbourne, 2016, Australia. Halili, E, Saleh, A and Zeitun, R (2015), ‘Governance and Long-Term Operating Performance of Family and Non-Family Firms in Australia’, Studies in Economics and Finance, vol.32, no.4, pp.398-421. History of ASX, viewed Nov 07 2017, https://www.marketindex.com.au/history Plagiarism, collusion and cheating Holmes Institute regards most seriously any act of dishonesty in assessments such as plagiarism, collusion, cheating, re-submission of previously marked work in different units, examination misconduct and theft of other students’ work. In short: ‘Plagiarism’ means to take and use another person’s ideas and pass these off as your own by failing to give appropriate acknowledgement, that is, not indicating by referencing that the ideas expressed are not your own. ‘Collusion’ (or un-authorized collaboration) means joint effort in preparing material submitted for assessment, between students or others, except where this has not been approved by the lecturer in charge of the unit. ‘Cheating’ means to obtain an unfair advantage in an examination or in other written or practical work required to be submitted or completed by a student for assessment. If the passing off was done intentionally, you have cheated; if it was unintentional, the offence you have committed is the academic misdemeanor of failing to reference a source correctly. Acts of dishonesty in assessment could result in penalties including failure in the Unit and possible exclusion from Holmes Institute. If you are unsure about this, please speak to your lecturer.
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CRITERIA FOR GROUP ASSIGNMENT ASSESSMENT Content Unsatisfactory (0-49% marks given) Limited Demonstration (50-60% marks given) Proficient (61-79% marks given) Exemplary (80%-full marks given) 1 No specific data and information provided to answer the questions; No research basis for analysis; Merely relying on secondary data from internet; No reference. Limited data and information provided to answer the questions; Limited research conducted; Limited references; Adequate data and information provided to answer the questions; Reasonable research conducted; Issues are discussed based on sufficient research and in relation to each other; Adequate references in proper referencing style; Outstanding data and information provided to answer the questions; Independent and deep analysis, based on wide research; Issues and factors are presented and analyzed in a logical interconnectedness; Broad and credible sources of references in proper referencing style. 2, 4 and 5 Calculations are not demonstrated for the required financial fundamental ratios, beta and expected return, Proving no explanation of implications of the ratios and calculations; Single year analysis. Calculations are limitedly demonstrated; Financial ratios, beta and expected return are provided but not sufficiently; Providing limited analysis of the ratios; Inconsistent time period of analysis. Adequate demonstration of calculations; Ratios, beta, expected returns are derived with relevant implications and explanation; Justification and assumptions are clear; Consistent 2 year analysis. Calculation and presentation are demonstrated clearly; Ratios, beta, expected returns are derived and justified with exemplary analysis that based on current issues and key factors; Implications and explanation are
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provided convincingly Consistent 2 year analysis and properly justified for inclusions or exclusions. 3 Providing no graphs of share price of the chosen company No adequate analysis and comparison of price trend No relevant research and referencing Providing graphs of share price but not in relevant time frame; Limited analysis and comparison of the share price trend with All Ordinaries Index; Limited research conducted, inadequate referencing Providing adequate graphs of share price of the chosen company Indicating clearly the movements of share price Relevant analysis comparison with All Ordinaries Index with justification based on reliable data within proper time frame; Adequate research conducted with relevant referencing Providing well established graphs of the chosen company’s share price, which shows obvious price trends in the given time frame Analyzing and comparing the chosen share price with All Ordinaries Index with exceptional good justification and data based analysis Outstanding research is conducted with wide based sources and proper referencing 6 Providing no recommendations or inadequate recommendations for investment decisions; Addressing limited recommendations; Demonstrating limited justification and Presenting adequate recommendations that properly supported by justification and analysis; Presenting a wide ranges of adequate recommendations that exemplarily supported by justification and analysis;
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No relevant justification using data and information derived from the analysis of financial statements; Failing to meet the requirements of academic writing in terms of structure, presentation, wordings and referencing analysis of the given recommendations; Demonstrating limited skills of academic writing in terms of structure, presentation, wordings and referencing Data and information derived from financial analysis completed are properly used to support the recommendations Demonstrating the ability to present the ideas in proper analytical and contextual level Using data and information derived from financial analysis completed in an efficient, analytical and logical manner; Demonstrated a high level of understanding and skills of academic writing by means of criticism, logical argument, and interpretation of data and information.

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