Evaluate different types of funding to aid decision making

Assignment Help Financial Management

Reference no: EM133853759

Assessment Task - Case Study Report

Learning Outcome 1: Critically evaluate the role and content of the four principal financial statements to inform decision making in contemporary business environments.

Learning Outcome 2: Investigate and evaluate the different types of funding to aid decision making.

Learning Outcome 3: Evaluate how decisions related to capital structure and payout policy affect firm value.

Assessment Task
Drawing on your understanding of financial accounting concepts and financial statements analysis, write a 1,500-word case study report analysing, evaluating and comparing the financial performance and position of two comparative businesses using the annual reports provided in the Assessments area of the subject site. This assessment task will provide you with the opportunity to apply the knowledge and skills acquired in the subject. It is a practical task, involving the use of real-world accounting information. This is intended to consolidate your knowledge and skills relating to how investment opportunities are assessed.

Context
Financial statements analysis is the process of reviewing and analysing a company's financial statements, which include the balance sheet, income statement, cash flow statement and statement of changes in equity. This process helps individuals and organisations make informed decisions about investing, lending and managing their resources. Some of the most common uses of financial statements analysis include: evaluating a company's financial health, assessing profitability, identifying financial trends, assessing credit worthiness and making informed investment decisions.

This assessment task provides you with an opportunity to evaluate the knowledge you have acquired and apply the skills you have developed to undertake the analysis of financial statements published by companies in their annual reports. This employs techniques that a financial analyst uses to evaluate investment decisions for companies that are listed on a stock exchange.

Instructions
In this assessment task, you will assume the role of a financial market analyst and analyse the financial statements of two Australian Securities Exchange (ASX) listed companies in the same industry, offering recommendations to an investor on which company's shares to invest in. To be successful in this assessment task, you are required to follow the steps below.

Read and understand the topics covered in Modules 3 and 4.

Retrieve, read and analyse the following additional information provided in the Assessments area of the subject site:
Annual Reports - Your case study report will be based on the reports of these two nominated companies.
Assessment 2 Financial Analysis Template (MS Excel file) - This file contains in-built formulae to compute a variety of financial ratios required for completing the assessment task.

Based on the information contained in the financial statements (and the Notes to the Financial Statements) of the annual reports, conduct financial analyses of the two companies using the following tools:

Ratio analysis - The analysis should consider financial ratios within each of the following categories: liquidity, profitability, efficiency, capital structure and market performance (also known as investment ratios). Your financial analysis should highlight and discuss key movements in all categories of ratio analysis over the latest two financial years. You should note that in calculating some of the ratios, such as return on equity (ROE) and return on assets (ROA), you may need to get some information from a third annual report. For instance, if the two years of analysis are 2024 and 2023, calculating the ROE and ROA for 2023 may require some information from the balance sheet of 2022. It is your responsibility to download (from the company's website or Google) the 2022 annual report to extract the required information.

Comparative analysis - This analysis requires you to compare your evaluation of each company over the given two-year period with a view to determining whether you would advise investment in one or both of these companies, or neither of them.

You are required to use the Assessment 2 Case Study Report Template (MS Word file) provided in the Assessments area of the subject site to:
summarise and present your analyses
recommend to the client what position to take in relation to the two companies.

Case Study Report Structure and Format
Your 1500-word case study report should follow industry standards and be structured as shown in detail below:

Executive Summary - In this brief section (200-250 words), you are required to summarise your entire report. As a minimum, you will need to discuss the purpose of your report, the methodology you have used and the key findings of your report. The executive summary is not included in the word count. Book assignment help service now!

Table of Contents - This section is not included in the word count.

Introduction (around 150 words) - Provide a description of the task, the tools and methods that will be applied, and how the report is organised.

Analyses of Companies (around 200 words) - Using the headline financial information about the companies in their annual reports, present an overview of their overall financial performance in the period of analysis. This should include:
financial highlights
industry outlook
macroeconomic outlook.

Tables and figures are not included in the word count.

Ratio Analyses (around 550 words) - Calculate and tabulate various financial ratios from the financial statements in the annual reports to derive insights on the financial performance and positions of the companies. You are required to calculate, analyse and evaluate the ratios falling under the following categories:
Liquidity
Profitability
Efficiency
Capital structure
Market performance

Tables and figures are not included in the word count.

In this section, include a Comparative analysis (around 300 words) that discusses and compares the investment prospects in each company using your analysis and the qualitative information available in the annual reports or in the news media.

Conclusions, Recommendations and Overall Assessment (around 300 words) - Comment on the business performance of the companies, as revealed by the analysis you have undertaken. Recommend what position the client should take after reviewing these investment opportunities.

References - A minimum of six (6) academic and related references (e.g. journal articles, book chapters, conference papers) and at least two (2) non-academic and related references (e.g. company websites and annual reports, newspaper articles, government websites, consultant reports, etc.) are required to support the discussions in your case study report. Please make sure your references are current. All references should be in the current APA style. Using Wikipedia, Investopedia and similar sources should be avoided. This section is not included in the word count.

Read the assessment rubric, which is an evaluation guide with criteria for grading your assessment. This will indicate what features a successful Case Study Report should exhibit.

A case study template is also provided in the Assessment area on MyLearn for your reference.

Referencing
It is essential that you use current APA style for citing and referencing the sources that you use.

Reference no: EM133853759

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