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ACCY801 Assignment PDF

This document provides instructions for Assessment 2, a report analyzing the annual reports and financial statements of two allocated companies. Students must calculate and compare various financial ratios of the companies, discuss differences in liquidity, capital structure, asset efficiency and profitability. The report should identify ways for the lower returning company to improve and include an executive summary, objectives, ratio analysis, discussion of financial aspects, returns, capital expenditures and a conclusion with recommendations. Accuracy, knowledge demonstration and correct application of concepts will determine marks received.

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Abdul Rehman
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300 views5 pages

ACCY801 Assignment PDF

This document provides instructions for Assessment 2, a report analyzing the annual reports and financial statements of two allocated companies. Students must calculate and compare various financial ratios of the companies, discuss differences in liquidity, capital structure, asset efficiency and profitability. The report should identify ways for the lower returning company to improve and include an executive summary, objectives, ratio analysis, discussion of financial aspects, returns, capital expenditures and a conclusion with recommendations. Accuracy, knowledge demonstration and correct application of concepts will determine marks received.

Uploaded by

Abdul Rehman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ACCY801 Accounting and Financial Management

Trimester 1 2019

Assessment 2 – Report

Description

You are required to analyse the annual reports and financial statements of two
companies in the Retailing industry and write a report based on the results of your
analysis. Your analysis will include a discussion of each company’s objectives, liquidity,
capital structure, asset utilisation efficiency, profitability and capital expenditures. All
of the necessary information for your report is contained in the 2019 annual reports
of the two companies you will be analysing. All of the background knowledge
necessary to successfully complete the report has been covered in the lectures,
tutorials and readings for ACCY801 before week 5.

Company allocation and Annual Report download

Each student has been allocated two companies. To find the companies you have been
allocated, refer to the file ‘List of students and companies’ on Moodle, in the
‘Assignment’ folder. For example the student with student number 1234567 (a
fictitious student) is required to analyse the companies ‘ABC’ and ‘CBA’1. If you are
unsure about which two companies you should analyse, please contact the subject
coordinator.

Download the 2019 annual report for each of your two companies. All of the annual
reports are available on Moodle, in the ‘Annual Reports’ folder within the
‘Assignment’ folder.

Detailed Instructions

1
These companies are actually not retailers and no student will have to analyse these companies.
Students should complete the ratio analysis first, or at the very least calculate the
return on assets (ROA) of each company. Identify the company with the lowest ROA.
For the purposes of this report, assume you are an internal analyst working for this
company, and the other (higher ROA) company has been identified by management
as your company’s main competitor.

Assume that senior management has asked you for a report comparing your company
with the competitor, and that identifies ways of improving profitability and increasing
returns for shareholders.

Your report must contain the following sections:

i. Executive Summary
ii. Objectives and long-term plans
iii. Financial Ratios
iv. Liquidity, capital structure and asset management efficiency
v. Operating profitability
vi. Returns on shareholders’ investment
vii. Capital expenditures
viii. Conclusion and recommendations

A description of the requirements of each section follows.

i. Executive summary (4 marks)


A brief section that summarizes the important parts of the rest of the document,
including the analysis conducted, key results or findings, recommendations and
limitations of the report.

ii. Objectives and long-term plans (10 marks)


Discuss the objectives and long-term plans of each company. Include references to
any relevant page numbers in the Annual Reports.
iii. Financial ratios (28 marks)
Using the relevant financial statements for the 2019 year, calculate the following
ratios for each company:

Current ratio Quick ratio


Receivables turnover Inventory turnover
Fixed asset turnover Total asset turnover
Debt ratio Interest coverage
Gross profit margin Operating profit margin
Net profit margin Return on assets
Equity multiplier Return on equity

Important: Do not include any formulas or discussion in this section.

iv. Liquidity, capital structure and asset management efficiency (15 marks)
Discuss the differences between your company and its competitor in terms of:
 Liquidity
 Capital Structure
 Asset management efficiency

v. Operating profitability (18 marks)


Explain how your company (with the lowest ROA) might be able to improve its
operating profitability, relative to its main competitor (as identified by management).
Also discuss any favourable aspects of your company’s operating performance relative
to its competitor.

vi. Returns on shareholders’ investment (10 marks)


Explain and discuss any differences in return on equity for your company and its
competitor.
vii. Capital expenditures (10 marks)
Discuss the extent of each company’s capital expenditures in 2019, and how each firm
financed the capital expenditure.

viii. Conclusion and recommendations (5 marks)


Summarise the main points you wish to draw the reader’s attention to, and provide
recommendations to management about possible courses of action.

Style and format


Reports must be typed in 12-point font, with appropriate headings in bold, margins of 2.54cm
(1 inch), double line spacing, and page numbers. There are no restrictions on the choice of
font however the font chosen must be appropriate for business purposes and must be
consistent throughout the report.

Marking guide
This assignment is marked out of 100 and is worth 25% of the total mark for this subject.
Marks are allocated as shown in the ‘Detailed Instructions’ section; however students should
be aware that in general marks will primarily accrue for the following three main aspects: (i)
accuracy of calculations, (ii) demonstration of knowledge of concepts and (iii) correct
application of concepts. Students’ efforts in reading and interpreting the annual report will
also contribute to the total number of marks. Students must demonstrate the ability to
discuss the aspects of financial performance or position represented by each financial ratio in
simple terms that do not include the name of each ratio, and can expect to lose marks if they
fail to do so.

In addition, up to 10% of the maximum total marks may be deducted for poor presentation
and readability including poor layout, formatting, grammar, spelling, and referencing. Further
details will be made available on Moodle.

Plagiarism and other forms of cheating


Plagiarism or any other form of academic misconduct, if detected, may result in a mark of
zero for the whole report, in addition to other serious consequences as discussed in the
subject outline. Students suspected of academic misconduct will be interviewed and
required to defend their assignment.

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