Reference no: EM134003637

Finance for Business

Part A Statistical analysis on return, risk and correlation
(ASX). Your role involves evaluating key financial metrics, including returns, risk measures, and correlations, to generate meaningful insights that support investment decision-making. No AI shortcuts — Get genuine assignment help from experienced, real tutors.

The dataset containing the ASX-listed companies assigned to your group has been provided below. Using this dataset, you are required to apply appropriate statistical techniques to assess the performance and risk characteristics of each company. Please ensure that you carefully follow the detailed instructions outlined below when conducting your analysis. Your work should demonstrate clear methodology, accurate calculations, and well-reasoned interpretations of the results for the companies allocated to your group.

Allocation of companies

Use your Blackboard group number to determine whether you are in an odd or even group.

Note:
Group enrolment is specific to each campus, and you are not allowed to create groups that span across different campuses.
HM5002 students are not permitted to form a group with students enrolled in HI5002.
You are required to strictly adhere to the company selection guidelines. Failure to comply will result in no grades being awarded for the group assignment.

Requirements:
Write an overview of your allocated companies, ensuring the following details are included:
its principal business activities (main products or services),
total market capitalisation (as of December 2024),
major company events in 2022-2024 which may have impacted its stock prices.
Statistical analysis on return, risk and correlation.
Using the historical price data provided in the Calculation Instructions document, perform the following:
Calculate the monthly returns and complete the table below. If there are no return values, indicate them as N.A.

Derive suitable graphs to show the volatility of monthly returns, comment on significant observations and critically review possible reasons behind return volatility.
Please insert the graphs in your report.

Calculate the arithmetic mean (i.e. average monthly return), and standard deviation of monthly return and comment on the risk and return behaviour of stocks.

Calculate the geometric mean of monthly return for each stock and explain what these values indicate about companies' returns.

Estimate the annual return for each company using the calculated average monthly return.

Calculate the holding period return for each stock.

Based on monthly returns, estimate and comment on these stocks' correlations.

Part B Financial Ratio Analysis

In addition to conducting the statistical analysis on return, risk and correlation for the allocated companies using the historical prices in part A, you are also required to perform a detailed financial ratio analysis. This analysis should complement the findings from part A by offering deeper insights into each company's financial performance, and overall market positioning.

Requirements:
Obtain and review the Balance Sheet and Income Statement for each of your assigned companies for three financial years (FY2022, FY2023 and FY2024). Attach these financial statements in the appendix of your report. Based on this information:
Evaluate each company's liquidity position by calculating and analysing key liquidity ratios,
such as the Current Ratio, Quick Ratio etc. for each of the three financial year.

Comment on whether the company appears to have sufficient short-term resources to meet its obligations.

Identify and explain two key leverage ratios that would be important to creditors and/or potential investors (e.g. Debt-to-Equity Ratio, Interest Coverage Ratio, etc). Calculate and interpret these ratios for each company for each of the three financial year.

Identify and explain two key financial ratios that would be important to shareholders and/or potential investors (e.g. Return on Equity, Earnings Per Share, etc). Calculate and interpret these ratios for each company for each of the three financial year.

Part C Preparation of an Investment Proposal
(7 marks) Finally, you are required to develop a well-structured investment strategy proposal. In this proposal, you must select and recommend two out of the four allocated companies, ensuring that one company is chosen from each industry represented in your dataset.

Your recommendations should be clearly justified and grounded in the findings from your earlier analyses, including both the statistical evaluation (returns, risk, and correlation) and the financial ratio assessment. You are expected to integrate these insights to explain why the selected companies offer stronger investment potential, considering factors such as performance consistency, risk profile, growth prospects, and competitive positioning within their respective industries. No AI shortcuts — Get genuine assignment help from experienced, real tutors.

Assignment Structure:
The assignment should include the following components:
The assignment cover page which clearly states your group members' names and student numbers, and all other required details.
Abstract (one paragraph)
Table of contents
A brief introduction or overview of what the assignment is about
Body of the assignment with appropriate section headings
Conclusion
List of References (follow the Holmes Adapted Harvard Referencing guidelines)