This is a group assignment and all group members must contribute evenly to each part of the assignment. The complete written assignment will be marked - individual section marks will not be awarded to individual members.
Where applicable, show details of your workings (calculations). Collusion, copying or plagiarism will result in disciplinary action. We advise that you keep a copy of your assignment asbackup.
The assignment has two parts: Planning and Written Report
Analysis and Interpretation of Financial Statements
Andrew Simms, one of your good friends, has inherited amodestsum of money from his grandfather, who passed away late last year. Currently half of the money is in a term investment and is returning around 2% ininterest.
Andrew is interested in the share market and would like to investhis remaining money from his grandfather in company shares. He has been reading through information on the sorted.org website, including some appropriate hints on investment strategy https:// www.sorted.org.nz/a-z-guides/investing
He thinks that investing in New Zealand companies listed in the New Zealand Stock Exchange maybe a good idea given he only earns 2% interest currently which he regards as being too low a return.
Andrew knows very little about analysis and interpretation offinancial statements and is unsure how to start his investigation. He knows that he should seek professional advice from an authorized financial advisor but he would like to become more knowledgeable himself before approaching the advisor. Knowing that you are currentlydoing a course that deals with the analysis and interpretation offinancial
statements, he seeks your assistance in reviewing a selectionof companies.
Andrew has asked you to review the financial information and other available reports of your selectedcompany. He has asked you for an objective opinion on the performance of the company and would like you to come back to him with an ‘invest' or ‘do not invest' recommendation.
Your group is required to select a listed company from the NZ stock Exchange and email your lecturer to get confirmation of the selected company. The lecturer needs to confirm your selected company before you proceed. Your task will be to complete :
analysis calculations
planning evidence
a final writtenreport
Part 1
Planning
Required:
Your group must plan the writing of your Performance Evaluation Report. The group must use a collaborative document to share the writing of the report.
Members of the group must each contribute to the shared document.
Part 2 client has chosen the company warehouse.
Required:
WrittenReport 48 marks
For your allocated company you are to prepare a Performance EvaluationReport for the past 3 years (2013-2015, 2014-2016 as applicable), in which you:
1. Conduct a three-year trend analysis of key figures (eg sales revenue,
expenses, profit). Use graphs where appropriate. This can be extended tofive years if the figures are available for yourcompany.
2. Using the worksheet provided complete the analysis calculations fromthe
financial statements, 2014 and 2015 (or 2015 and 2016), for yourcompany.
3. Evaluate the performance of the company by using the analysis completed
in (2) above and commenting on the following under separate headings in your report:
(i) the company'sprofitability
(ii) the company's assete?ciency
(iii) the company'sliquidity
(iv) the company's long term financialstructure
(v) the company's market investmentmeasures
4. Based on the analysis done, prepare a conclusion for your report, highlighting the main findings and making an assessment as to whether investments made by shareholders are likely to have long term benefit forthe shareholder. Recommend to either ‘invest' or ‘not invest' in this company. Justify your statements.
5. Correct APA referencing must be used for all sources of information inthe written report andpresentation
6. Your written report must be submitted on or before 1.00pm,Wednesday 19 October 2016, through the assignment folder on Moodle. Instructions will be given in class on how to use the assignment hand in folder on Moodle. If you are unsure about this process please ask for assistance. Only one submissionis required pergroup.
Useful Resources andSuggestions
1. Please refer to https://library.unitec.ac.nz/ for full information on APA referencing andcitations.
2. Annual reports from prior years and other relevant financial information is available through the Unitec Library website https://library.unitec.ac.nz/ . Look for Databases A - Z and then NZX Data.
3. Internet addresses that could proveuseful:
NZ Business Herald https://www.nzherald.co.nz/ NZ Exchange https://www.nzx.com/
FinData https://www.findata.co.nz/
Companies O?ce https://www.business.govt.nz/companies/Sorted https://www.sorted.org.nz
4. You are encouraged to use the library to find texts that cover analysis and interpretation of company financial statements. Refer to the free iBook called Accounting Boundless which is available through the ACTY5200 Moodlesite.
5. Whenever you use share price data, you should state the date of theshare price you are using as well as the source of thedata.
6. Suggestions:
• Keep in mind who the analysis isfor.
• Think where trend lines would enhance anexplanation.
• Bar charts often explain more than tables offigures.
• Proof read your assignment before you submitit.