Specify ownership-governance structure of qantas airlines

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Reference no: EM131822815 , Length: word count:1000

QUESTIONS -

You are 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. They wish to expand their portfolio and are considering one of two companies' shares to add to their portfolio. (They have an extra $1 million that they wish to invest into company shares.)

Companies are Singapore and Qantas Airlines for financial report on 2016 and 2017.

You are required to do the following:

1. Prepare a brief description of the companies, outlining the core activities, the markets they operate within and any factors in the companies' history which you consider help present a "picture" of your company.

2. Specify ownership-governance structure of the company:

Name the main substantial shareholders:

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

Name the main people involved in the firm governance:

A Chairman

Board members

CEO.

Whether any of these people has 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.
Whether any of shareholders with more than 5% share capital is involved in firm governance. (Please do this question for Singapore and Qantas Airlines)

3. Calculate the following key ratios for BOTH of your selected companies for the past 4 years. Annual reports are accessible via company websites (show all working out):

i) Return on Assets (EBIT) = (NPAT / Total Assets)

Return on Owners Equity = (Net Profit After Tax / Owners Equity)

Gearing Ratio = Total Liabilities / Total Assets

Be sure that you have "proven" the above equation.

ii) Explain what phenomenon is being "captured" by the variable TA/OE, and how it is impacting on the relationship between Return on Assets and Return on Owners Equity.

Be sure to explain why the ROE (EBIT) is significantly greater than or less than the ROA (EBIT).

4. Research via the internet or financial/business publications

i) From research via the internet (using credible sources) or financial/business publications, note any significant announcements which may have influenced the share price of your company. These factors could include merger activities, divestitures, changes in management's earnings forecasts, changes in analysts' forecasts, unusual write-offs or abnormal items, macroeconomic factors, industry wide factors, significant management changes, changes in the focus of the company, impact of competitors or law suits etc. (Restrict the number of announcements to 5).

5. Go to reuters (website) finance stocks and type in the code for your company into the Search Stocks field and click on the magnifying glass button.

i) What is their calculated beta for your company?

ii) If the risk free rate is 4% and the market Risk Premium is 6%, use the Capital Asset Pricing Model to calculate the required rate of return for the companies' shares.

iii) Is the company you and your partner have chosen a "conservative" investment? Explain your answer. (please complete this part of the question only from the Singapore and Qantas airlines)

6. Consider the gearing ratios for your company over the past two years:

i) Does it appear to be working towards the maintenance of a preferred optimal capital structure? (i.e., does it appear to be "stable"?) Explain your answer.

ii) What have they done to adjust / amend their gearing ratio? Increase or repay borrowings? Issue or buy back shares? Has the Director's Report given any information as to why they have made any adjustments?

7. Dividend policy

i) Discuss what the dividend policy of the management of the company appears to be. Explain fully.

8. Based on your analysis above, write a letter of recommendation to your client, providing an explanation as why you would like to include this company in their investment portfolio. Please refer to the ratio results calculated earlier and any other trends or factors that you believe to be important.

9. Formal structure and referencing APA Style.

Need to complete the questions 2, 4 and 5.

Attachment:- Assignment File.rar

Reference no: EM131822815

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Reviews

len1822815

1/19/2018 6:19:07 AM

Need 1000 words. Message from the student: Hey, so I need to complete the no.2, 4 and 5. My companies are Singapore and Qantas Airlines for financial report on 2016 amd 2017. So question no.2 for both companies. Question no. 4 only for Singapore airlines (500 words). Question 5. Only part (iii) for both Airlines. The companies, which you will compare and examine, are those selected in your groups and must be reported to your lecturer in Class #3. Written Report and analysis of the firms performance (including referencing). By the end of week 10 you should provide: A hard (and soft) copy of your report to your lecturer and A hard (or soft) copy to the other group members. You have one week to study the other group's report (company) in order to debate with them during the following week's (week 11) oral presentation.

len1822815

1/19/2018 6:19:00 AM

Students are required to study, undertake a research, analyse and conduct academic work to the given instructions in the areas of business finance covered in learning materials from week 1 to week 10 inclusive. The assignment should identify the main issues, including underlying theories, and explain financial performance measures used in your task. You are strongly advised to reference professional websites, journal articles and text books in this assignment (case study).

len1822815

1/19/2018 6:18:50 AM

Key tasks to be completed - Names of each member of the group and a “business name” under which you will be providing your financial advisory services. The name(s) of listed company (ies) that you will investigate/analyse for the purposes of possible recommendation to your client You MUST: Provide a historical description of the company. Identify the type ofcompany. Provide a brief description of the companies’ operations and, Provide a copy of the last TWOrecent (2017 and 2016) Income Statements and Balance Sheets (which can be downloaded from their web sites).

len1822815

1/19/2018 6:18:44 AM

Calculation of Performance Ratios. Identify any significant factor which may have influenced the share price of your company. Your companies’ beta values and expected Rates of Return using the Capital Asset Pricing Model. Using the gearing ratios for your company over the past two (2017 and 2016) years, emphasise any improvement towards the maintenance of a preferred optimal capital structure. Final Submission of Complete Assignment.

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