Financial Statement Analysis

1

School of Applied Business
Semester 2 2019

ACTY7292
Financial Statement Analysis
Group Assignment

Aim of the assessment
This is a research based group project and requires critical thinking and application of the financial analysis techniques studied in this course.

Learning outcomes covered in this assignment
L/O 2 Critically analyse the business strategies adopted by different businesses to create value for their shareholders.
L/O 3 Critically examine the financial performance of firms using financial ratios and cash flow analysis.
L/O 4 Apply models for forecasting financial performance and financial position of firms.
L/O 5 Critically apply selected approaches to the valuation of firms.

Task
The group should assume that it is a Business Analysis Team that has been assembled to conduct an analysis of a New Zealand listed company. Your team has been approached by a potential investor who is looking to invest in a New Zealand listed retail company. The investor’s request is to prepare a comprehensive business analysis report advising on which company he should invest in. Your analysis should be comprehensive covering all available financial and non-financial information in publicly available sources such as annual/ interim reports, financial commentaries, newspaper articles, websites, etc. (Please refer to the report structure for requirements for the business analysis report).

Instructions
• Each group is to consist of three/four students. Students can select their own team members.
Email the lecturer aperera@unitec.ac.nz the names of the group members by 11th March 2020.
• For the purposes of this assignment, you are to utilise publicly available information ONLY on the selected listed company. You are NOT to approach the company or any of their personnel directly.
• All group members are required to contribute to the report. If members within the group are unhappy about the contribution of an individual group member, a process for evaluation of individual contribution to workload will be conducted, which could result in that group member not sharing in the group’s marks. This should be signalled as soon as possible rather than leaving it to the assignment due date.
• It is important that you consult with the lecturer in advance to discuss any issues relating to your group project.
• Report structure: The report should include the following headings:

Prospective Analysis: Forecasting
Valuation

• The report will mark according to the schedule on page 3-4.
• Do not exceed the maximum word limit of 8000.

 
ACTY 7292
[Financial Statement Analysis] Group Assignment

Marking Schedule

Prospective Analysis: Forecasting
• Based on past three years’ financial information, identify the trends and forecast the profitability for next year. Make suitable assumptions when predicting information for next year. 10
Valuation
• Estimate the weighted average cost of capital of the company as at the most recent financial year end.
• Apply Gordon’s model to estimate the share price.
• Compare the estimates with the current share price on the NZX and provide reasons for the difference. State the date of the share price as the source of the data.
• Show all workings and assumptions (assumptions should be reasonable). 10

Financial Statement Analysis