Part A: Written analytical Report (20 marks)
Section 1: Financial Statement Analysis and interpretations of selected ASX listed companies (70% weight for this section)
Assessment Description and Instructions:
The purpose of this assessment is to provide students with an understanding of financial statement analysis as well as using Microsoft Excel to aid in calculating financial statement ratios and aiding financial analysis. In business, accountants, managers, and financial analysts are required to understand how businesses or a particular business operates. Financial statement analysis by using common size calculations and percentages aids in this understanding and it also enables comparison to other businesses regardless of the absolute dollar size of these businesses.
Businesses today require that their employees can work in teams and collaborate to produce more innovative solutions, compared to what an individual can produce. Students will be required to provide a group report comprising of 3 to 4 students and calculations. This assignment involves analysing the financial statements and other information relating to selected listed Australian public companies. The selected ASX listed companies will be allocated to each group of students and uploaded on Moodle.
Your group (self-select on Moodle) of a preferred size 3-4 (ASX listed 2 companies will be allocated) and no more than 4 students must allocate these companies within the group to a group member, and they are responsible for the calculations and analysis of that individual company. The assignment is divided into two parts. Each member of the group is responsible for collecting data from the selected ASX listed company data, analysis, drafting an answer and preparing presentation materials. The other task requires that the group come together to analyse the results provided by individual group members on each of the listed companies to provide a group answer.
Required:
i). A brief statement of the selected company’s operations and the statement of the CEO about each selected company’s annual performance and strategy. You are required to write in your own interpretation not just cut and paste of the CEO’s statement(s) on company’s annual performance and strategies. (10% marks)
ii). Calculate the following ratios for 2021 and 2022 – Total marks 48% marks (3 marks for each ratio for both year) (be sure you show the supporting collected data)
| Analysis category | No | Ratios | Company Code | Company Code | |
| 2021 | 2022 | ||||
| Liquidity Ratio | 1. | Current Ratio | |||
| 2. | Quick Ratio | ||||
| Efficiency | 3. | Return on Total Assets | |||
| 4. | Inventory Turnover Ratio | ||||
| 5. | Inventory Turnover (number | ||||
| of days) | |||||
| Profitability | 6 | Gross Profit Ratio | |||
| 7 | Net Profit Ratio | ||||
| Solvency | 8. | Debt to Equity | |||
| 9. | Debt ratio | ||||
| Market Performance | 10. | Market Value($) | |||
| 11. | Return on Shareholder Equity | ||||
| 12. | Earnings per share (EPS) | ||||
iii). Using the ratios calculated in (ii) above of this case study, compare and contrast the financial performance of the two-year period of your analysis. [Provide a single agreed answer per group] [12% marks]
Section 2: Master Budget (extract) (30% marks allocated for this section)
SYDGEE makes and sells upmarket carry bags for personal PC. Jon, controller, is responsible for preparing SYDGEE’s master budget and has assembled the following data for 2023.
The direct labour rate includes wages, all employee-related benefits and the employer’s share of payroll tax. Labour-saving machinery will be fully operational by March. Also, as of 1 March, the entity’s enterprise agreement calls for an increase in direct labour wages that is included in the direct labour rate.
SYDGEE expects to have 20 000 bags in inventory at 31 December 2022, and has a policy of carrying 50 per cent of the following month’s projected sales in inventory.
| 2023 | |||||
| January | February | March | April | ||
| Estimated Sales | 40,000 | 48,000 | 32,000 | 36,000 | |
| Sales price per unit | $160 | $160 | $150 | $150 | |
| Direct labour hours per unit | 5 | 5 | 4.5 | 4.5 | |
| Direct labour hourly rate | $30 | $30 | $30 | $30 | |
| Direct materials cost per unit | $20 | $20 | $20 | $20 |
Required
- Prepare the following budgets for SYDGEE for the first quarter of 2023. Be sure to show supporting calculations: (16% marks)
- production budget in units
- direct labour budget in hours
- direct materials budget
- sales budget.
- Calculate the total budgeted contribution margin for SYDGEE for the first quarter of 2023. Be sure to show supporting calculations. (8% marks)
- Discuss at least three behavioural considerations in the profit-planning and budgeting process. (6% marks)
[You are required to use Excel program to complete this project. You must use formulae in excel and must print out the formulae that has been used in completing this part.]
Part B: Presentation (10 marks)
It is expected that the major part (about 80% of the presentation time) of your group presentation on this part should be based on the process of data collection and analysis from the selected company’s financial statement.
The group presentation is in the form of a PowerPoint presentation of 15-20 PowerPoint slides. This is a mix of visual representation of contents, data, and images to build an argument on corporate governance and characteristics on your sensitivity analyses.