MBA403_T2_2020_Assessment_03 Page 1 Kaplan Business School Assessment Outline Assessment 3 Information Subject Code: MBA403 Subject Name: Financial & Economic Interpretation and Communication...

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MBA403_T2_2020_Assessment_03 Page 1 Kaplan Business School Assessment Outline Assessment 3 Information Subject Code: MBA403 Subject Name: Financial & Economic Interpretation and Communication Assessment Title: Financial Analysis Report Assessment Type: Report Weighting: 30 % Total Marks: 30 Submission: Due in Turnitin on Monday by 23:55 (11:55pm) AEST Due Date: Week 13 Your Task Select a company that is currently listed on the ASX. Write a Financial Analysis Report using an essay structure to interpret a company’s most recent annual report. Assessment Description Students will write a Financial Analysis Report for a stakeholder (external investor or internal manager) that interprets the annual report of an Australian company. The Report will clearly state recommendations about the company’s suitability for share investment or internal management. The company should be listed on the ASX. Students will be assessed on the thoroughness of the financial analysis. Thoroughness requires a logical justification of why financial and non-financial performance indicators are included in the analysis. The analysis will be formally written to meet the expectations of a stakeholder. The report is limited to 1000 words, plus or minus 10%, excluding title page and bibliography. Assessment Instructions Select a company that is currently listed on the ASX. Write a Financial Analysis Report that interprets the company’s most recent annual report. This report will need to be written for a stakeholder (external investor or internal manager). Research additional information beyond the annual report about the company’s performance. Use the group financial results if the annual report presents financial results for the group and parent company. Justify the selection of financial and non-financial performance indicators that are relevant for evaluating the company’s financial performance. Use a formal language and structure of your report. Refer to Resource A below. Include relevant non-financial analyses. Refer to Resource B below. Page 2 Kaplan Business School Assessment Outline Resource A – Financial Analysis Report content Executive summary The executive summary should be approximately 10% of total word count. It provides a background of the company chosen, the main business activities and the purpose of the Financial Analysis Report. Analysis Analysis will present and discuss the financial results and performance indicators extracted from the company’s annual report. A concise commentary should explain the significant changes in the financial results. Interpretation The interpretation should be approximately 70% of total word count. Interpret the causes of the changes in the company’s financial performance. Justify the inclusion of financial and non-financial performance indicators in the Financial Analysis Report. Research additional non-financial performance indicators from a wider range of sources beyond the company’s own publications. Discuss the company’s business activities and the financial implications of the activities. Apply financial and non-financial performance indicators to explain trends and issues in the company’s financial results. Conclusion The conclusion should be approximately 20% of total word count. State a clear recommendation that addresses the decision-making needs of a stakeholder. For example, recommend a decision to invest or not invest in the company if the Report is written for a potential shareholder. Or, recommend a decision to improve the financial performance of the company if the Report is written for an internal manager. Justify recommendations by explaining how it will meet the needs of the stakeholder. Bibliography and In-text Citations The Academic Integrity and Conduct Policy requires the appropriate use of intext citations and bibliography. You must cite all references (information sources) and comply with the expectations for academic writing. The bibliography and citations are excluded from total word count. Page 3 Kaplan Business School Assessment Outline Resource B Consider the following questions if they are relevant to the company’s financial performance. • What are the core business area(s) and geographic locations in which the company operates? • How have specific financial results improved or changed? • Is there evidence from other sources that can verify the trends for the industry? • What are the company’s current business strategy or strategies and key points of difference in the target market? Is there a specific skillset required of employees? • What is the current and future market potential for the company? What influences have recent global events apparently had on the company? In which specific areas? • Identify strengths of the company’s management team and how these may benefit the organisation in future financial years. • What are the remuneration trends from last year to this year for the highest earners? • Is there a difference in the wages that could be earned in a competitor’s business? • What is the current management structure and ownership structure? • Identify strengths of the company’s management team and how these may benefit the organisation in future financial years. • What are the remuneration trends from last year to this year for the highest earners? • Are there other non-wage-related benefits? Page 4 Kaplan Business School Assessment Outline Important Study Information Academic Integrity Policy KBS values academic integrity. All students must understand the meaning and consequences of cheating, plagiarism and other academic offences under the Academic Integrity and Conduct Policy. What is academic integrity and misconduct? What are the penalties for academic misconduct? What are the late penalties? How can I appeal my grade? Click here for answers to these questions: http://www.kbs.edu.au/current-students/student-policies/. Word Limits for Written Assessments Submissions that exceed the word limit by more than 10% will cease to be marked from the point at which that limit is exceeded. Study Assistance Students may seek study assistance from their local Academic Learning Advisor or refer to the resources on the MyKBS Academic Success Centre page. Click here for this information. http://www.kbs.edu.au/current-students/student-policies/ https://elearning.kbs.edu.au/course/view.php?id=1481 Page 5 Kaplan Business School Assessment Outline Assessment Marking Guide The following criteria will be applied to marking your assignment. Presentation /5 The Financial Analysis Report adheres to the total word count of 1,000 words The Financial Analysis Report is clearly written, logically structured, and draws a logical conclusion(s) Financial information is evaluated and presented to meet the expectations of a stakeholder (external investor or internal manager). Technical Skills /20 Financial and non-financial data is interpreted, analysed and justified for relevance to the company’s performance Financial theory and principles are applied in the evaluation and discussion Relevant and specific advice is provided to the stakeholder that addresses their needs Stakeholder Engagement /5 The selection of data sources is relevant to the interests of the stakeholder. The language and tone (grammar and syntax) of the Financial Analysis Report are formal and professional TOTAL /30 Assessment 3 Information Your Task Assessment Description Assessment Instructions Resource A – Financial Analysis Report content Executive summary Analysis Interpretation Conclusion Bibliography and In-text Citations Resource B Important Study Information Academic Integrity Policy Word Limits for Written Assessments Study Assistance Assessment Marking Guide Financial Analysis Report A sample ‘Table of Contents’ EXECUTIVE SUMMARY INTRODUCTION Mention the stakeholder, the company, (very brief) company operations and reasons for the report RATIO ANALYSIS · Financial Ratios: Profitability, Liquidity, Efficiency, Investment etc · Non-Financial Key Performance Indicators (KPIs) TREND ANALYSIS · Income Statement, Balance Sheet & Cash Flow Statement reviews SUSTAINABILITY/CORPORATE SOCIAL RESPONSIBILITY (CSR) · Goals, Programs, Performance (Relevant Key Highlights) INDUSTRY/COMPETITOR ANALYSIS · Market Position, Competitive Advantage (Relevant Key Facts) HORIZONTAL ANALYSIS · Financial condition and performance from Statements (% increase/decrease) across at least 2 years VERTICAL ANALYSIS · Relationships in Statements expressed as a % of a base figure (e.g. % net sales in Income Statement, % of total assets in Balance Sheet) CONCLUSIONS & RECOMMENDATIONS Make sure you address the needs of the Stakeholder you selected REFERENCE LIST Bibliography Chosen Company – AGL Utilities Download your company’s most recent annual report  Scroll down to see “Announcements”  Download and review the 'results presentation' - this is a high-level presentation on results and outlook and gives a good overview of what the company does and what aspects the management are focusing on. It usually also includes horizontal trend analysis of performance  (This can also be found on your chosen company's own website - easiest to search for "company name" and "investor relations").  Google  Search media releases, articles, and analysts’ reports Example of an Executive Summary structure for an Accounting & Finance type report An executive summary provides an overview of a larger document or research and is usually the first thing your reader will see. Oftentimes, executive summaries are the only place decision makers will go to determine if action is warranted on a particular action or idea Essentially, an executive summary is the back cover of your book, convincing readers that it's worth their time to read the whole thing. State what the report is about This report provides an analysis and evaluation of the current and prospective profitability, liquidity and financial stability of Outdoor Equipment Ltd for a potential Investor Briefly say what analysis was undertaken Methods of analysis include trend, horizontal and vertical analyses as well as ratios such as Debt, Current and Quick ratios. Other calculations include rates of return on Shareholder Equity and Total Assets and earnings per share to name a few. Details of all calculations can be found in the appendices Highlight the findings from your analysis Results of data analysed show that all ratios are below industry averages. In particular, comparative performance is poor in the areas of profit margins, liquidity, credit control, and inventory management. Present your key conclusions and recommendations The report finds the prospects of the company in its current position are not positive. The major areas of weakness require further investigation and remedial action by management. Recommendations for (name the Stakeholder) discussed include: -improving the average collection period for accounts receivable· -improving/increasing inventory turnover· -reducing prepayments and perhaps increasing inventory levels (Optional) Mention any limitations or constraints of the report The report also investigates the fact that the analysis conducted has limitations. Some of the limitations include: -forecasting figures are not provided -current economic conditions not factored in -data limitations as not enough information is provided or enough detail i.e. monthly details not known -results are based on past performances not present