Reference no: EM132321893

Business Finance Assignment -

Purpose - 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).

Assignment Specifications -

ASSIGNMENT TASK - 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 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.

REQUIREMENTS - 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 Australian Securities Exchange web site.

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.).

STAGES TO BE COMPLETED -

1. Description of operation and comparative advantages of the selected company.

2. Identify and conduct a trend analyse with the two groups of financial ratios, including profitability and operating efficiency of the selected company.

3. Analyse monthly share prices movements of the selected company within 2 years, compare the movement with the All-Ord-Index.

4. Calculate cost of equity for the selected company.

5. Identify capital structure and calculate WACC of the selected company.

6. Recommendation Letter

7. Final Submission of Complete Assignment.

ASSIGNMENT STRUCTURE - Assignment Structure should be as the following:

Abstract (no more than 150 words).

I. INTRODUCTION

Briefly introduction of you work: the purpose of assignment, the selected company, your findings and structure of your assignment (not more than 200 words).

II. FINANCIAL ANALYSIS OF SELECTED COMPANY

2.1. Description of the company

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.

2.2. 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. As your client is especially interested in the profitability and operating efficiency of the company, provide analysis on the company performance and justify your opinions using the data:

• Profitability ratios
• Operating efficiency ratios

2. 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. Data of share price movement of the company should be plotted against All Ordinaries Index.

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.

2.4. Calculation cost of equity

Based on the data of just paid dividend, current share price and assumption that the company will maintain a constant dividend growth rate of 4% from now on, calculate the cost of equity of your selected company, using constant dividend growth model.

2.5. Identify the capital structure

1. Identify and discuss the capital structure of the company by calculating the weights of debts and equity capital (ordinary shares and preferred shares if any). Assume that the current required rate of returns for the industry debts (kD) is 5%, the required rate of returns for preference shares (kP) is 10%, using your result of calculated capital structure and cost of equity (kE), calculate the weighted average cost of capital (WACC) for the company. Comment on any change in the company's capital structure through years. Support your comments and analysis by further research.

2.6. 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)

III. CONCLUSION

Summarize the outcomes of your works (not more than 300 words).

Attachment:- ASX Listed Company.rar