Collect financial data from one company listed below that is available on the Australian Securities Exchange (ASX).
Woolworths
You should collect annual reports of the selected company that cover financial results using the library database Datanalysis and the ASX website, which can be accessed online via the Swinburne Library, or the company’s website. A major objective of financial reports is to provide useful information for decision making. The most relevant analysis of a company’s past performance relates to the preceding two years. With this in mind, we ask you to concentrate your ratio calculations to the last two years’ financial statements (2015 and 2016).
You are required to complete the following tasks:
Examine the company’s business profile in terms of its size, market, product and history.
Examine the company’s strategy.
Assess the company’s liquidity, profitability, operating efficiency, financial solvency, and share market performance over the two year period (2015 and 2016). You will calculate relevant ratios from the financial statements to make your judgment. You must provide the relevant figures for the numerator and denominator of any ratios you use in an appendix.
Part 1: Written report
You will write a report that assesses the company’s performance and specifically, you will consider how the company:
maintains or improves its return on investment
maintains or improves its return to shareholders in dividends, and/or share price growth
matches the strategies to the past performance and future expectations.
Finally, you are required to recommend a buy, hold, or sell decision for existing and/or potential shareholders.
The report will have:
Contents page
A table of contents showing headings and corresponding page numbers.
Executive summary
A very brief summary of the objective of this assignment, the main findings, and the main reasons behind your recommendation of whether or not the selected organisation is financially stable and performing well as an economic unit meeting shareholder expectations.
Organisation’s business profile
Examine the history, strategy, current size, current market(s), as well as products or services that are currently supplied by the organisation that you have selected.
Financial ratio analysis
Use the following sub-headings, and in this order:
Profitability
Operating profit margin
Return on equity (ROE)
Return on assets (ROA)
Efficiency
Asset turnover
Inventory turnover
Liquidity and Solvency
Current ratio
Gearing ratio
Acid test
Share market performance
Dividend payout ratio
Earnings per share
For each sub-heading, do the following:
In your report, provide a brief narrative explaining what the corresponding sub-heading attempts to measure,
Provide a summary of an overall assessment of the sub-heading, based on the combined analysis of all ratios discussed therein. In the report, provide a reference to the appendix as you make a commentary (with reasons) as to whether the trend in the corresponding ratio is indicative of improvement or deterioration.
Provide an appendix detailing each selected financial ratio in the corresponding subheading including the general formula used and a brief explanation as to what the ratio attempts to measure (not in word count but assessed)
In an appendix, show your calculations of two ratios for each sub heading sourced directly from the Annual report for the final year, as well as a separate table showing the values for each year in the selected time taken from Morning Star.
Conclusion
Discuss any pertinent past trends and future expectations about the organization that might influence your overall
Recommendation
Make a recommendation as to whether or not the selected organization is financially stable and performing in line with market expectations Justify your recommendation based on your overall assessment, taking into consideration future expectations. Indicate whether you recommend buying, selling or holding shares in the selected
Part 2: Presentation
For this presentation you are required to use Prezi
(Links to an external site.)
to make a narrated slideshow presentation based on its report. The presentation must incorporate the key elements and recommendations of your report, presented in a persuasive fashion to the client.
The presentation should involve:
6-10 slides
3-5 minutes of narration.
Presentation logistics
The presentation will be produced by creating a Prezi. Detailed instructions for all steps in this process can be found in the Study Resources page. You will need to include your name, and the link to your presentation in your written report