Assessment Two 50% of total marks Guidelines: Type: Individual report Max word count: 2,500 words Outcome of the assignment / Conclusion: You need to advice investors to invest in your company or not and justify for the same. SECTION A (~ around 1500 words) 1. Select a company listed in Singapore stock exchange (SGX) ONLY. 2. Give an introduction of the selected company (about the product or services, location, turnover, number of employees) (~ 300 words) 3. Make a horizontal analysis and vertical analysis (of Profit and loss account and Balance sheet) for immediately preceding five years (2015, 2014, 2013, 2012, 2011) Get a trend of the sales, profits, assets and liabilities. Comment on the trend (increase or decrease) (~ 200 words) Please refer to the slides that is published on base camp for examples of horizontal analysis and vertical analysis (also attached in this sheet) 4. Identify profits (~ 300 words) a. Comment on the economic condition (ups and downs in the market of your selected company) - Example: If you have selected Singapore airlines, then comment on the airline industry. (~ 100 words) b. For the preceding 5 years calculate the profitability ratios and comment on the ratios as shown below in sample analysis. c. Use any of the below 5 ratios for commenting on profitability. PROFITABILITY Gross profit ratio Net profit ratio Expense ratio Return on assets Return on Equity / Return on Investment Return on ordinary shareholders' funds Operating ratio 5. Identify Dividends (~ 300 words) a. For the preceding 5 years calculate the divided related ratios and comment on the ratios as shown below in sample analysis. b. Use any of the below 5 ratios for commenting on dividends DIVIDEND RATIOS Dividend Yield ratio Dividend Payout ratio Price earnings ratio Earnings per share ratio Dividend Cover ratio 6. Identify stability and Liquidity (~ 300 words) a. Comment on company's short term and long term financial position. b. For the preceding 5 years calculate the stability and liquidity ratios and comment on the ratios as shown below in sample analysis. c. Use any of the below 5 ratios for commenting on stability and liquidity Stability and Liquidity Ratios Debt to Equity ratio Interest coverage ratio Net cash transition period ratio Gearing ratio Debt to market capitalization proportion ratio Current ratio or working capital ratio Quick ratio or acid test ratio Absolute liquid ratio Current cash debt coverage ratio EFFICIENCY Asset Turnover ratio Current Asset turnover ratio Stock or inventory turnover ratio Debtor's turnover ratio Cash Cycle Creditor's turnover ratio Section B (~ around 1,000 words) 1. Refer the website of selected company or Google any information about the company performance or any news that has impact on the company financial performance (Example: If you have selected Singapore airlines, --- It acquired Tiger and Scoot which have substantial impact on SIA financials. Comment on the motives of acquisition). You need to provide the source of information. (~ 200 words) 2. Any critics about the company in the journals or financial reports. You need to provide the source of information. (~ 200 words) 3. Refer to the corporate governance report of the company (Refer to the annual report of the company to access to this report) (~ 200 words) a. Identify the directors - write o bit on their role and their impact on the company b. Identify the non-executive directors – write o bit on their role and their impact on the company. 4. Identify the asset value per share and the current market share price. (This will be available on the company website or google out. The annual report will have the yearend high and low values). Comment on the share prices of the company. Is it linear with the stock exchange indicator (STI – Strait times Index) (~ 200 words) Conclusion: Do you recommend any investor to invest in your selected company and why? (Justify your decision – Like the share market price per share is increasing YOY, or profits or sales are increasing YOY, any government incentives/ policies that will positively influence the company performance,,,, etc….,) (~ 200 words) NOTE It is essential that all sources of information are correctly referenced using the Harvard system. The word count highlighted in yellow is just an approximation. You are free to vary the count. However total count should not exceed 2,500 words