Financial Management Assignment -
Learning Outcomes -
1. To demonstrate knowledge of broad business principles with depth of understanding of at least one business discipline.
2. To develop effective oral and written communication skills.
3. To develop the skills to demonstrate a broad understanding of business principles and demonstrate depth in at least one discipline.
5. To develop and apply skills in critical thinking, complex problem solving and decision making.
Part A: Interpreting Financial Information
A financial analyst has gathered the following information about ABC Retail Company for the years 2016-2018.
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ABC Retail Company Pty Ltd Comparative Financial Information 30th June ($'000)
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2016
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2017
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2018
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Balance Sheet Information
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Current Assets
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Cash
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342
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344
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281
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Accounts Receivable
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4346
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4892
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5239
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Inventory
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6483
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7196
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8013
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Non-current Assets
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Property Plant & Equipment
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16546
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16546
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18746
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Accumulated Depreciation
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8273
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11582
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14983
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Current Liabilities
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Bank Overdraft
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14
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0
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65
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Accounts Payable
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6224
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4167
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3982
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Non-current Liabilities
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Loan
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10750
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10750
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10750
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Shareholders Equity
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Paid in Capital
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2000
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2000
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2000
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Retained Earnings
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456
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479
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499
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Total Shareholders Equity
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2456
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2479
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2499
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Other Financial Information
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Sales
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38222
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39258
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40592
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Earnings Before Interest and Tax
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1208
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1281
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1305
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Interest Expense
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1077
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1215
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1247
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Tax Expense
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39
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20
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17
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Dividends Paid
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46
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23
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20
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Earnings Per Share
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0.046
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0.023
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0.020
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P/E ratio
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11.16
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8.39
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7.66
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Other Income
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0
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0
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0
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1. Use the above information to answer the following questions:
a) At what price did ABC's shares trade on the 30th June 2018?
b) What was the market capitalisation of the company at this date?
c) Compare ABC's most recent Price/Earnings (P/E) ratio to the industry average and provide an explanation for any difference observed (remember to cite the source of your information).
2. Analyse the company's current and quick ratios.
3. Evaluate the company's working capital management over the three-year period. Use ratio analysis to support your conclusions.
4. Use ratio analysis to identify and explain the trend in the company's profitability.
5. If you were a bank considering lending to ABC, what ratio(s) would give the best indication of the company's solvency? Explain why you would or would not lend to ABC.
Part B: Business Report
Your employer is an Australian financial corporation. You have been asked to write a business report on the role of ethics in corporate governance. Your report should be supported by appropriate academic research and must include an analysis of recent news regarding AMP and its relationship with the corporate regulator.
Assessment Criteria:
- Demonstrated knowledge of the agency problem and shareholder wealth maximization.
- Application of relevant financial theory to real world examples
- Logical inferences drawn from information presented and appropriate justification of stance taken.
- Overall presentation of the argument is relevant and appropriate.
GENERAL NOTES FOR ASSIGNMENTS -
Assignments should usually incorporate a formal introduction, main points and conclusion, and will be fully referenced including a reference list.
Note - Part A - Calculation and Part B - 1000 words.