Page 1 of 8 ASSESSMENT BRIEF Subject Code and Title FINA6000 Managing Finance Assessment Case Analysis Individual Individual/Group Individual Length 2 000 Words (+-10%) Learning Outcomes b) Analyse financial information and evaluate financial performance of a business. c) Apply time value of money to the valuation of a variety of cash flows, securities and projects leading to sound investment and financing decisions. d) Analyse risk and return associated with investments. e) Apply various capital budgeting techniques to investment decision making. f) Analyse the cost of capital and explore its link to the capital structure of an organisation. g) Analyse working capital and payout policies and their impact on the liquidity position of a business. Submission End of Week 10 (11.55pm Sunday) Weighting 30% Total Marks 100 marks Context: The Case Analysis assesses students understanding of the concepts of risk and return, capital structure and cost of capital through analysing two Australian listed companies in the two different sectors and being part of the ASX200 market index. Page 2 of 8 Instructions: (a) From the list of ASX200 companies below choose any 2 companies NOT from the same sector. Evaluate the capital structures of the two companies over the most recent 5 years and discuss how similar or different they are from their industry average capital structures. Critically comment on what factors could have influenced the capital structures of both firms over the period. What theory of capital structure do you think closely describes the capital structure of each of the companies? (15 marks) (b) Having examined the capital structures, determine the weighted average cost of capital (WACC) of the companies. (10 marks) (c) To what extent has taxes influenced the WACC? (5 marks) (d) You have inherited $5 million from your late grandfather and are considering investing in shares of one of the two companies. Perform a valuation of the two stocks using two approaches, a discounted cash flow approach and the other a relative valuation approach. (15 marks) (e) Using the results of the valuation above, together with an analysis of how the two companies have fared with regards to risk and return over the most recent 5 years, decide which one to invest in. You should use more than one metric of risk and return in your analysis. (5 marks) (f) Would your decision change if you consider other factors (qualitative or otherwise) that pertain to these companies? (5 marks) (g) Critically evaluate the use of standard deviation as a measure of risk of investing in shares. From your research suggest better methods than standard of measuring risk. (5 marks) In addition to the above you will also be assessed on the following: (see marking Rubric at the end for more description of expectation). (h) Content, Audience and Purpose (5%) (i) Critical reasoning, presentation and defence of an argument and/or position (10%) (j) Analysis and Application with synthesis of new knowledge (15%) (k) Use of academic conventions and sources of evidence (5%) (l) Effective communication (5%) Submission Instructions: This assignment must adhere to the following: 1. This assignment must be prepared and submitted individually. 2. You must prepare a Business Report in a Word Document with Excel workings embedded into the Word document. The instructions to embed the Excel workings are as follows: Page 3 of 8 INSTRUCTIONS TO EMBED AN EXCEL FILE INTO A WORD DOCUMENT A. Open your Assignment in Word and Click the Insert tab. B. Click the Object button on the Text section of the ribbon. Click Object from the small dropdown menu. C. When the Object window opens, click the Create from File tab. Browse to the Excel file containing your analysis in the directory where it is located and double-click it to embed it into the Word document. Ensure that you have ticked the box that allows you to embed the Excel file as an icon. 3. The Word document must be properly referenced using the APA referencing style. Wikipedia and Investopedia not acceptable academic sources. Note that the Reference list, appendices and calculations are not included in word count. Page 4 of 8 S&P/ASX 200 Index (1 July 2018) Code Company Sector ABP Abacus Property Group Units/ Stapled Securities Real Estate ABC Adelaide Brighton Materials APT Afterpay Touch Information Technology AGL AGL Energy Limited Utilities ALQ Als Limited Industrials ALU Altium Limited Information Technology AWC Alumina Limited Materials AMC Amcor Limited Materials AMP AMP Limited Financials ANN Ansell Limited Health Care ANZ ANZ Banking Group Limited Financials APA APA Group Units FP Stapled Securities Utilities APO Apn Outdoor Group Consumer Discretionary APX Appen Limited Information Technology ARB ARB Corporation Consumer Discretionary AAD Ardent Leisure Group Ordinary/Units FP Stapled Securities Consumer Discretionary ALL Aristocrat Leisure Consumer Discretionary ASX ASX Limited Financials ALX Atlas Arteria Ordinary Stapled Securities Industrials AZJ Aurizon Holdings Limited Industrials ASL Ausdrill Limited Materials AST Ausnet Services Limited Utilities API Australian Pharm Health Care AHG Automotive Holdings Consumer Discretionary AOG Aveo Group Ordinary/Units FP Stapled Securities Real Estate BOQ Bank of Queensland Financials BAP Bapcor Limited Consumer Discretionary BPT Beach Energy Limited Energy BGA Bega Cheese Limited Consumer Staples BAL Bellamys Australia Consumer Staples BEN Bendigo and Adelaide Financials BHP BHP Billiton Limited Materials BKL Blackmores Limited Consumer Staples BSL Bluescope Steel Limited Materials BLD Boral Limited Materials BXB Brambles Limited Industrials BRG Breville Group Limited Consumer Discretionary BKW Brickworks Limited Materials BWP BWP Trust Ordinary Units FP Real Estate CTX Caltex Australia Energy CAR Carsales.com Limited Information Technology CGF Challenger Limited Financials CHC Charter Hall Group Stapled Securities US Prohibited Real Estate CQR Charter Hall Retail Units FP Real Estate CNU Chorus Limited Foreign Exempt NZX Telecommunication Services Page 5 of 8 CLW CHTR H LWR Stapled Securities Real Estate CIM Cimic Group Limited Industrials CWY Cleanaway Waste Limited Industrials CCL Coca-Cola Amatil Consumer Staples COH Cochlear Limited Health Care CBA Commonwealth Bank Financials CPU Computershare Limited Information Technology CTD Corp Travel Limited Consumer Discretionary CGC Costa Group Holdings Consumer Staples CCP Credit Corp Group Financials CMW Cromwell Prop Ordinary/Units FP Stapled Securities Real Estate CWN Crown Resorts Limited Consumer Discretionary CSL CSL Limited Health Care CSR CSR Limited Materials CYB CYBG Plc Cdi 1:1 Foreign Exempt Lse Financials DXS Dexus Units FP Stapled Real Estate DHG Domain Holdings Aus Information Technology DMP Domino PIZZA Enterpr Consumer Discretionary DOW Downer Edi Limited Industrials DLX Duluxgroup Limited Materials ECX Eclipx Group Limited Financials EHE Estia Health Limited Health Care EVN Evolution Mining Limited Materials FXJ Fairfax Media Limited Consumer Discretionary FPH Fisher & Paykel H Foreign Exempt NZX Health Care FBU Fletcher Building Foreign Exempt NZX Materials FLT Flight Centre Travel Consumer Discretionary FMG Fortescue Metals Group Materials GUD G.U.D. Holdings Consumer Discretionary GEM G8 Education Limited Consumer Discretionary GXY Galaxy Resources Materials GTY Gateway Lifestyle Stapled Securities Real Estate GMA Genworth Mortgage Financials GMG Goodman Group Stapled Securities FP Real Estate GPT GPT Group Stapled Securities FP Real Estate GNC Graincorp Limited Class A Consumer Staples GXL Greencross Limited Consumer Discretionary GOZ Growthpoint Property Unit/ Stapled Securities Real Estate GWA GWA Group Limited Industrials HVN Harvey Norman Consumer Discretionary HSO Healthscope Limited Health Care IEL Idp Education Limited Consumer Discretionary ILU Iluka Resources Materials IPL Incitec Pivot Materials IGO Independence Group Materials Page 6 of 8 IFN Infigen Energy Stapled Securities FP Utilities ING Inghams Group Consumer Staples IAG Insurance Australia Financials IOF Investa Office Fund Stapled Securities Real Estate IVC Invocare Limited Consumer Discretionary IFL IOOF Holdings Limited Financials IPH IPH Limited Industrials IRE Iress Limited Information Technology JHG Janus Henderson Chess Depositary Interests Financials JBH JB Hi-Fi Limited Consumer Discretionary A2M The a2 Milk Company Consumer Staples JHX James Hardie Indust Chess Depositary Interests 1:1 Materials LLC Lendlease Group Unit/ Stapled Securities Real Estate LNK Link Admin HLDG Information Technology LYC Lynas Corporation Materials MFG Magellan Fin Group Limited Financials MGR Mirvac Group Stapled Securities Real Estate MIN Mineral Resources Materials MMS Mcmillan Shakespeare Industrials MND Monadelphous Group Industrials MPL Medibank Private Limited Financials MQG Macquarie Group Limited Financials MTS Metcash Limited Consumer Staples MYO Myob Group Limited Information Technology MYX Mayne Pharma Limited Health Care NAB National Aust. Bank Financials NAN Nanosonics Limited Health Care NCM Newcrest Mining Materials NEC Nine Entertainment Consumer Discretionary NHF Nib Holdings Limited Financials NSR National Storage Stapled Security FP Real Estate NST Northern Star Materials NUF Nufarm Limited Materials NVT Navitas Limited Consumer Discretionary NWS News Corp Class B Voting Common Stock-Cdi Consumer Discretionary NXT NEXTDC Limited Information Technology OML Ooh!Media Limited Consumer Discretionary ORA Orora Limited Materials ORE Orocobre Limited Materials ORG Origin Energy Energy ORI Orica Limited Materials OSH Oil Search Limited 10 Toea Energy OZL OZ Minerals Materials PDL Pendal Group Limited Financials PGH Pact Group Holdings Limited Materials Page 7 of 8 PLS Pilbara Min Limited Materials PMV Premier Investments Consumer Discretionary PPT Perpetual Limited Financials PRY Primary Health Care Health Care PTM Platinum Asset Financials QAN Qantas Airways Industrials QBE QBE Insurance Group Financials QUB QUBE Holdings Limited Industrials REA REA Group Information Technology RHC Ramsay Health Care Health Care RIO RIO Tinto Limited Materials RMD Resmed Inc Cdi 10:1 Foreign Exempt NYSE Health Care RRL Regis Resources Materials RSG Resolute Mining Materials RWC Reliance Worldwide Industrials S32 SOUTH32 Limited Materials SAR Saracen Mineral Materials SBM ST Barbara Limited Materials SCG Scentre Group Stapled Securities Real Estate SCP Sca Property Group Units FP Stapled Securities Real Estate SDA Speedcast Int Limited Telecommunication Services SDF Steadfast Group Limited Financials SEK Seek Limited Industrials SFR Sandfire Resources Materials SGM Sims Metal MGMT Limited Materials SGP Stockland Units/ Stapled Securities Real Estate SGR The Star Ent Group Consumer Discretionary SHL Sonic Healthcare Health Care SIG Sigma Health Limited Health Care SIQ Smartgrp Corporation Industrials SKC Skycity Ent Group Limited Foreign Exempt NZX Consumer Discretionary SKI Spark Infrastructure Stapled $0.65 Loan Note and Unit US Prohib Utilities SOL Soul Pattinson (W.H) Energy SPK Spark New Zealand Foreign Exempt NZX Telecommunication Services SRX Sirtex Medical Health Care STO Santos Limited Energy SUL Super Ret Rep Limited Consumer Discretionary SUN Suncorp Group Limited Financials SVW Seven Group Holdings Industrials SWM Seven West Media Limited Consumer Discretionary SXL STHN Cross Media Consumer Discretionary SYD SYD Airport FP Stapled Securities US Prohibited Industrials SYR Syrah Resources Materials Page 8 of 8 TAH Tabcorp Holdings Limited Consumer Discretionary TCL Transurban Group Ordinary Shares/Units FP Triple Stapled Industrials TGR Tassal Group Limited Consumer Staples TLS Telstra Corporation Telecommunication Services TME Trade Me Group Foreign Exempt NZX Consumer Discretionary TNE Technology One Information Technology TPM TPG Telecom Limited Telecommunication Services TWE Treasury Wine Estate Consumer Staples URW Unibailrodawestfield Chess Depositary Interests 20:1 Real Estate VCX Vicinity Centres Ordinary/Units FP Stapled Securities Real Estate VOC Vocus Group Limited Telecommunication Services VVR Viva Energy REIT Stapled Securities Real Estate WBC Westpac Banking Corp Financials WEB Webjet Limited Consumer Discretionary WES Wesfarmers Limited Consumer Staples WHC Whitehaven Coal Energy WOR Worleyparsons Limited Energy WOW Woolworths Group Limited Consumer Staples WPL Woodside Petroleum Energy WSA Western Areas Limited Materials WTC Wisetech Global Limited Information Technology XRO Xero Limited Information Technology Page 9 of 8 ECON6001 Assessment 1 Brief Page 2 of 2 Learning Rubrics Assessment Attributes Fail (Unacceptable) Pass (Functional) Credit (Proficient) Distinction (Advanced) High Distinction (Exceptional) Grade Description (Grading Scheme) Students expected to produce a well structured report showing knowledge, critical reasoning and professionalism expected of postgraduate students Evidence of unsatisfactory achievement of one or more of the learning objectives of the course, insufficient understanding of the course content and/or unsatisfactory level of skill development. Evidence of satisfactory achievement of course learning objectives, the development of relevant skills to a competent level, and adequate interpretation and critical analysis skills. Evidence of a good level of understanding, knowledge and skill development in relation to the content of the course or work of a superior quality on the majority of the learning objectives of the course. Demonstration of a high level of interpretation and critical analysis skills. Evidence of a high level of achievement of the learning objectives of the course demonstrated in such areas as interpretation and critical analysis, logical argument, use of methodology and communication skills. Evidence of an exceptional level of achievement of learning objectives across the entire content of the course demonstrated in such areas as interpretation and critical analysis, logical argument, creativity, originality, use of methodology and communication skills. Content, Audience and Purpose (Students should show an understanding of the essence of the assignment, the central idea(s) to be addressed and pitch the report accordingly) 5 Does not meet minimum standard Demonstrates no awareness of context and/or purpose of the assignment. 0-2.4 Meets minimum standard Demonstrates limited awareness of context and/or purpose of the assignment 2.5-3.24 Moves beyond minimum standard Demonstrates consistent awareness of context and/or purpose of the assignment. 3.25-3.74 Exceeds minimum standard Demonstrates an advanced and integrated understanding of context and/or purpose of the assignment. 3.75-4.24 Exceeds minimum standard and exhibits high levels of independence Consistently demonstrates a systematic and critical understanding of context and purpose of the assignment. 4.25-5 Page 10 of 8 Knowledge and understanding (Students should display an understanding of risk and return, capital structure and cost of capital). 60 Limited understanding of required concepts and knowledge Key components of the assignment are not addressed. 0-29.9 Knowledge or understanding of the field or discipline. Resembles a recall or summary of key ideas. Often conflates/confuses assertion of personal opinion with information substantiated by evidence from the research/course materials. 30-38.9 Thorough knowledge or understanding of the field or discipline/s. Supports personal opinion and information substantiated by evidence from the research/course materials. Demonstrates a capacity to explain and apply relevant concepts. 39-44.9 Highly developed understanding of the field or discipline/s. Discriminates between assertion of personal opinion and information substantiated by robust evidence from the research/course materials and extended reading. Well demonstrated capacity to explain and apply relevant concepts. 45-50.9 A sophisticated understanding of the field or discipline/s. Systematically and critically discriminates between assertion of personal opinion and information substantiated by robust evidence from the research/course materials and extended reading. Mastery of concepts and application to new situations/further learning. 51-60 Critical reasoning, presentation and defence of an argument and/or position It is important to be able to justify position Specific position (perspective or argument) fails to take into account the complexities of the issue(s) or scope of the assignment. Makes assertions that are not justified. Specific position (perspective or argument) begins to take into account the issue(s) or scope of the assignment. Specific position (perspective or argument) takes into account the complexities of the issue(s) or scope of the assignment. Others Specific position (perspective or argument) is expertly presented and accurately takes into account the complexities of the issue(s) and Specific position (perspective or argument) is presented expertly, authoritatively and imaginatively, accurately taking into account the Page 11 of 8 taken. Backing up with academic literature and other authentic references is important. It is not about expressing personal opinions. 10 0-4.9 Justifies any conclusions reached with arguments not merely assertion. 5.0-6.4 points of view are acknowledged. Justifies any conclusions reached with well formed arguments not merely assertion. 6.5-7.4 scope of the assignment. Justifies any conclusions reached with well developed arguments. 7.5-8.4 complexities of the issue(s) and scope of the assignment. Limits of position are acknowledged. Justifies any conclusions reached with sophisticated arguments. 8.5-10 Analysis and application with synthesis of new knowledge (Examining whether the student has applied finance knowledge of risk and return, capital structure and cost of capital to real companies used in the assignment and used the knowledge to make an investment decision. 15 Limited synthesis and analysis. Limited application/recommendations based upon analysis. 0-7.4 Demonstrated analysis and synthesis of new knowledge with application. Shows the ability to interpret relevant information and literature. 7.5-9.7 Well-developed analysis and synthesis with application of recommendations linked to analysis/synthesis. 9.75-11.2 Thoroughly developed and creative analysis and synthesis with application of pretested models and / or independently developed models and justified recommendations linked to analysis/synthesis 11.25-12.7 Highly sophisticated and creative analysis, synthesis of new with existing knowledge. Strong application by way of pretested models and / or independently developed models. Recommendations are clearly justified based on the analysis/synthesis. Applying knowledge to new situations/other cases. 12.75-15 Page 12 of 8 Use of academic and discipline conventions and sources of evidence Proper academic writing expected 5 Poorly written with errors in spelling, grammar. Demonstrates inconsistent use of good quality, credible and relevant research sources to support and develop ideas. There are mistakes in using the APA style. 0-2.4 Is written according to academic genre (e.g. with introduction, conclusion or summary) and has accurate spelling, grammar, sentence and paragraph construction. Demonstrates consistent use of credible and relevant research sources to support and develop ideas, but these are not always explicit or well developed. There are no mistakes in using the APA style. 2.5-3.24 Is well-written and adheres to the academic genre (e.g. with introduction, conclusion or summary). Demonstrates consistent use of high quality, credible and relevant research sources to support and develop ideas. There are no mistakes in using the APA style. 3.25-3.74 Is very well-written and adheres to the academic genre. Consistently demonstrates expert use of good quality, credible and relevant research sources to support and develop appropriate arguments and statements. Shows evidence of reading beyond the key reading There are no mistakes in using the APA style. 3.75-4.24 Expertly written and adheres to the academic genre. Demonstrates expert use of high-quality, credible and relevant research sources to support and develop arguments and position statements. Shows extensive evidence of reading beyond the key reading There are no mistakes in using the APA Style. 4.25-5 Effective communication The aim is to communicate well to be understood in arguments presented Difficult to understand for audience, no logical/clear structure, poor flow of ideas, argument lacks supporting evidence. No effort is made to keep audience engaged, audience cannot follow the line of reasoning. Information, arguments and evidence are presented in a way that is not always clear and logical. Information, arguments and evidence are well presented, mostly clear flow of ideas and arguments. Information, arguments and evidence are very well presented, the presentation is logical, clear and Expertly presented; the presentation is logical, persuasive, and well supported by evidence, demonstrating a clear Page 13 of 8 and to address all the questions in the assessment. 5 Little use of presentation aids, or the presentation aids and material used are irrelevant. 0-2.4 Attempts are made to keep the audience engaged, but not always successful. Line of reasoning is often difficult to follow. Presentation aids are used more for effect than relevance. 2.5 The audience is mostly engaged, line of reasoning is easy to follow. Effective use of presentation aids. 3.25-3.74 well supported by evidence. Engages the audience, demonstrates cultural sensitivity. Carefully and well prepared presentations aids are used. 3.75-4.24 flow of ideas and arguments. Engages and sustains audiences interest in the topic, demonstrates high levels of cultural sensitivity Effective use of diverse presentation aids, including graphics and multi-media. 4.25-5
Analyse financial information and
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