Textbook This is the prescribed textbook for this subject. Petty, J, Titman, S, Keown, A, Martin, J, Martin, P, Burrow, M & Nguyen, H 2012, Financial management: principles and applications, 6th edn, Pearson Australia, NSW (ISBN:9781442539174). Please note: A few errors have been identified in the prescribed textbook. Please refer to the following Textbook Errata for the correct information. Recommended Reading Recommended reading Arshad, A 2012, 'Net present value is better than internal rate of return', Interdisciplinary Journal of Contemporary Research in Business, vol. 4, no. 8, pp. 211–219. Brigham, E & Ehrhardt, M 2005, Financial management: theory and practice, 11th edn, Thomson South-Western, Cengage Learning. Cockrell, S & Meyer, D 2012, 'The Role of the management accountant in total quality management', Franklin Business & Law Journal, vol. 2012, no. 4, pp. 1–18. Erdogan, A 2013, 'Applying factor analysis on the financial ratios of Turkey's top 500 industrial enterprises', International Journal of Business & Management, vol. 8, no. 9, pp. 134–139. Finney, R 1994, Every Manager's Guide to Business Finance, American Managers Association, New York. Fosberg, R 2012, 'Capital structure and the financial crisis', Journal of Finance & Accountancy, vol. 11, pp. 46–55. Frino, A, Cusack, T & Wilson, D 2001, Introduction to corporate finance, Prentice-Hall, Frenches Forest. Gitman, L, Juchau, R & Flanagan, J 1994, Principles of managerial finance, 6th edn, Pearson Australia. Gupta, M, Pevzner, M & Seethamraju, C 2010, 'The implications of absorption cost accounting and production decisions for future firm performance and valuation', Contemporary Accounting Research, vol. 27, no. 3, pp. 889–922. Hannan, R, Rankin, F & Towry, K 2010, 'Flattening the organization: the effect of organizational reporting structure on budgeting effectiveness', Review of Accounting Studies, vol. 15, no. 3, pp. 503–536. Heine, R & Harbus, F 2002, 'Toward a more complete model of optimal capital structure', Journal of Applied Corporate Finance, vol. 15, no. 1, pp. 31-45. Hodder, J & Riggs, H 1985, 'Pitfalls in evaluating risky projects', Harvard Business Review, vol. 63, no. 1, pp. 128–135. Lamdin, D 2000 'Valuation with the discounted dividend model when corporations repurchase', Financial Practice & Education, vol. 10, no. 1, pp. 252–255. Langfield-Smith, K, Thorne, H, & Hilton, R 1998, Management accounting: an Australian perspective, Roseville, Irwin/McGraw-Hill. Li-Lin, L, Forgione, D & Younis, M 2012, 'Comparative analysis of the CVP structure of nonprofit teaching and for-profit non-teaching hospitals', Journal of Health Care Finance, vol. 39, no. 1, pp. 12–38. Marie, A & Rao, A 2010, 'Is standard costing still relevant? Evidence from Dubai', Management Accounting Quarterly, vol. 11, no. 2, pp. 1–10. McNulty, J, Yeh, T, Schulze, W & Lubatkin, M 2002, 'What's your real cost of capital', Harvard Business Review, vol. 80, no. 10, pp. 114 – 121.. Najjar, N 2013, 'Can financial ratios reliably measure the performance of banks in Bahrain?', International Journal of Economics & Finance, vol. 5, no. 3, pp. 152–163. Newman, R 1994, Accounting concepts for managers, Longman, Melbourne. Ohlson, J, Penman, S, Biondi, Y, Bloomfield, R, Glover, J, Jamal, K & Tsujiyama, E 2011, 'Accounting for revenues: a framework for standard setting', Accounting Horizons, vol. 25, no. 3, pp. 577–592. Rappaport, A 1998, Creating shareholder value: a guide for managers and investors, The Free Press. Ross, S, Bianchi, R, Christensen, M, Drew, M, Westerfield, R & Jordan, B 2014, Fundamentals of corporate finance, 6th edn, McGraw Hill. Solomon, E 1956, 'The arithmetic of capital budgeting decisions', Journal of Business, vol. 29, pp. 124–129. Tanış, V & Özyapıcı, H 2012, 'The measurement and management of unused capacity in a time driven activity based costing system', Journal of Applied Management Accounting Research, vol. 10, no. 2, pp. 43–55. Weaver, S & Weston, J 2001, Finance and accounting for non-financial managers, McGraw Hill. THE ASSIGNMENT Your task is to compare and contrast the historical (for the last 2 years) and expected future performance of a listed company and a competitor in a similar line of business, and present your findings in the form of a report which will cover both qualitative and quantitative performance elements in a logical cohesive format. The qualitative component of your discussion should include (but is not constrained to): A BRIEF background on each company including how they are placed within the industry. A BRIEF overview of the recent stock price movements for both companies. The impact of general local and global economic conditions on the companies (if any). Industry trends and an assessment of each company's ability to cope with these. The quantitative component should include: An initial analysis of trends in the items contained in the profit and loss statements, balance sheets and statements of cash flows; appropriate relevant ratios ( do not use multiple ratios which measure the same thing) measuring profitability, liquidity, working capital management, leverage/gearing and financial risk (market-based ratios). A highlighting of the most important changes within these ratios and an identification of the reasons for these changes. A comparison of the quantitative analysis for the two companies and an identification of the reasons for any differences. Taking into account the quantitative and qualitative analysis you are then required to make a recommendation which will fall into one of the following three categories: Invest in the company Invest in the competitor Invest in neither You should include a conclusion in which you comment on the strengths and weaknesses of your overall analysis encompassing what your analysis has accomplished and what are its limitations. NOTE: In order to start this assignment you will need to locate and extract the financial statements of the latest Annual Report and Financial Statements (comprising two years information) of your chosen publicly listed company that is listed on a stock exchange such as the Australian Stock Exchange (www.asx.com.au). It is recommended that you locate the Annual Report and Financial Statements soon after commencing the subject. Refer to the financial statements of your chosen company while studying topics in the subject so that you become familiar with the company and its operations. Calculate the various ratios based on the data in the financial statements. Do not calculate every ratio listed in the textbook. You should be selective and only go beyond the major ratios, which are discussed in the textbook, if you have decided that further detailed analysis of an aspect of the statements will better enable the development or justification of a recommendation to management. Analyse the ratios and the data from the financial statements to evaluate the company's operations and performance. The quality of this analysis is very important – much more important than the quantity of ratios or the calculation of ratios. Ratio calculation is expected to be accurate, but the majority of marks will be earned by demonstrating your understanding of ratio analysis and its uses. Hence, you should focus on analysis: on the implications of the ratios you present and on the explanation of the interaction between ratios. Place the ratio calculations in an appropriate appendix so that the body of the report only states the result of the calculation (e.g. '…argument is supported by a debtors collection period of 26 days') and not the process of calculating it. Pay attention to the presentation of this appendix so that it is user friendly and it is easy to locate any ratio. Include referencing so that you clearly acknowledge your sources of information. Your sources may include articles from the financial press, financial commentators and internet resources that you may have used to strengthen your analysis. Please remember to submit a hyperlink to the annual reports within the reference list in your assignment. This assessment is an individual assessment (ie this is not a group assessment). Please ensure you avoid collusion and other practices which compromise individual assessment work. (Refer to the Academic Integrity Policy available on AIB website) Important Assignment Instructions The required word length for this assignment is 2500 words (+/- 10%). In terms of structure, presentation and style you are normally required to use: - AIB standard report format; and - AIB preferred Microsoft Word settings; and - Harvard style referencing (which includes in-text citations plus a reference list). These requirements are detailed in the AIB Style Guide. Reference lists for AIB assignments / projects normally contain the following number of relevant references from different sources: 6-12 (for MBA assignments). All references must be from credible sources such as books, industry related journals, magazines, company documents and recent academic articles. Your grade will be adversely affected if your assignment contains no/poor citations and/or reference list and also if your assignment word length is beyond the allowed tolerance level (see Assessment Policy available on AIB website). Useful resources when working on your assignments include: - AIB Online Library - AIB Assignment Guide - AIB Style Guide Click to view info on Academic Integrity: Avoiding Plagiarism, Collusion and Other Issues Select the link for the assignment assessment criteria