Capital Markets & Corporate Finance Assignment-
Evaluating an ASX listed company
In order to make an informed decision as to whether you should include or exclude a company from your investment portfolio, you should do your own research! To get a full picture of the financial health and future performance of the company, you need to be able to analyse the financial statements of the company and compare them to an appropriate benchmark. Further, other information such as company specific new announcements, share price performance and changing risk profiles needs to be assessed.
This assignment requires you to carry out a company valuation and provide a brief supporting report. Clearly identify whether the company is over or undervalued in the stock market.
Specific Requirements:
Your report should include the following information
1. Company overview
The report must include a BRIEF company analysis where you make the reader aware of the nature of the business.
2. Growth prospects for the company
The report must forecast the growth rate of the company. You should do some research on macro-economic, industry or other condition likely to affect the business. A good source for this is the business press and past annual reports. Students are encouraged to use the Australian Business Index to source recent newspaper articles which deal with the company, and the business pages of any newspaper to identify broader economic comments. Be sure to fully cite/reference any work utilised in your analysis. Many industry reports follow a standard SWOT approach in which the significant Strengths, Weaknesses, Opportunities and Threats to the business carried on by the
company are identified, and discussed.
3. Financial ratio analysis
The report must calculate an array of financial ratios (i.e. liquidity, capital structure, asset management efficiency, profitability and market value ratios) to assess the health of the company. A brief commentary should be provided that interprets your computed ratios.
4. Risk and return
The report must compute the expected return and standard deviation (using a mean-variance approach) for your company. Further, the report must compute the beta (i.e. systematic risk) of the company (using the Capital Asset Pricing Model). Interpretation of these risk measures must be provided.
5. Weighted Average Cost of Capital (WACC)
The report must compute the Weighted Average Cost of Capital (WACC) of your chosen company.
6. Discounted Cash Flow (DCF) analysis and valuation
The report must carry out a DCF analysis, and set it out in a clear and logical way. Be sure to include an extra table in which you set out some sensitivity analysis demonstrating the effects on your valuation from increasing or decreasing your discount rate and cash flows by 1%. Interpret the results and provide a stock recommendation (e.g., Buy, Sell, Hold)
Presentation of the assignment
Pay particular attention to presentation. A significant component of your mark will be based on presentation. Avoid overdoing formatting, and ensure that the assignment is very clear, logical and professional. Pay attention to grammar. Clear and logical presentation is a major challenge in assignment preparation. Preparing a concise assignment is another major challenge. Every part of the assignment should somehow add to the end result - determining an appropriate investment - otherwise it is superfluous and distracting.
The report should be divided into two sections, which include: (a) Company analysis, and (b) Justifying the variables. In part (a), a summary and interpretation of the variables that were computed to assess your chosen company's performance should be provided. In part (b), the assumptions that were used to compute those variables and the strengths and weaknesses of the method to perform the computations/analysis should be thorough and clearly identified.
words: 1200.
Harvard Referencing.
Number of Ref: 15.
Attachment:- Data.rar