Assignment task
This assignment is to be completed in pairs. With your colleague, you are required to prepare a report comparing the financial performance of two companies over the last financial year. The companies are Chalmers Limited, and CTI Logistics Limited. The annual reports required for this assignment.
The assignment has two components. The first part requires you to conduct ratio analysis of the financial data in the companies' annual reports for 2014/2015. You must use Microsoft Office Excel to perform your calculations and to prepare charts that compare the performance of the two companies.
The second part is a written report comparing the two companies based on the results of your calculations and your research on the industry. In your discussion you should consider internal and external influences that may have influenced the operations of each company.
Calculating your ratios in Microsoft Office Excel
To analyse the financial statements you should use the following ratios only:
1. Profitability
i. Return on equity
ii. Return on assets
iii. Profit margin
2. Capital Structure
i. Debt ratio
ii. Interest coverage ratio
iii. Debt coverage ratio
3. Market Performance
i. Earnings per share
You are required to use the formulas and functions within MS Office Excel to calculate the ratios and produce charts. You are to submit one Excel workbook and your submission should include two worksheets:
- a worksheet for calculations and
- a second worksheet showing charts produced from the calculations.
Please note that the MS Office Excel worksheet is assessed separately to the report. You will be assessed on your use of formulas and functions and the production of charts enabling comparison between the two organisations.
Writing your Report
Your report should be presented as a business report. Your report should look as professional as possible, so please take care with the format and presentation of the information in your report. All tables and charts should be suitably labelled. You may use sub-headings and dot points in the report if you wish, but make sure you always use complete sentences and do not rely on headings to link the flow of the discussion.
You will need to research information about the organisations, the industry and the economic environment. Please note as a university student you are expected to acknowledge the source of all the information used in your report.
The word limit for this assignment is 1500 words. The word limit does not include your title page, contents page, calculations, graphs, appendices or reference list.
NB The report must be submitted with a group assignment coversheet available
2. Report Format
Your report should include the following:
Title page - should include the name of the organisation, Student name and ID number, tutorial group/time and the date of submission.
Executive summary- summarises the purpose and findings of the report (approximately 200-300 words)
Table of Contents - helps the reader locate sections within the report
Introduction - provide background information on the topic of the report to engage the reader's interest in the topic. The introduction should also include a Statement of Purpose which will familiarise the reader with the structure and purpose of what they are about to read.
Discussion - In the body of report you should use headings and sub headings. The information you should cover in the discussion includes:
a. An overview of the organisations and any influences on their operations. For example have there been any major events or circumstances affecting the company over the period being examined? Or are there any economic or other factors affecting the industry in which the company operates? (e.g. exchange rate fluctuations, floods/fires affecting production etc).
b. Analysis of the ratios - for each group of ratios Profitability, Capital Structure and Market performance you are required to provide the following:
o Suitably labelled and formatted charts or tables to illustrate your results
o Explanation of the ratios within each group.
o A discussion of the results considering any identified influencing factors.
o A comparison of the companies' performance highlighting individual ratio results if relevant.
Conclusion and summary - Provide an overall summary of the performance of the company as revealed by your analysis over the period being examined. Remind the reader of the main point(s) of the report and create the feeling of closing or "rounding off" the discussion. (You do not have to reach any overall conclusions about the organisation).
Reference List - this is a list of all the sources of information used in your report.
Appendices - should include a summary table of all the results of your calculations.
3. Assessment
An assessment rubric accompanies this assignment brief. You need to read this rubric carefully as it indicates how you will be assessed and what marks are allocated to each part of the assignment.