AF208 Group Assignment

Assessment Guide

 The assignment is to be presented in a business report which includes an Executive

Summary. Your analysis should provide the support for your recommendations.
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 The report should use size 11 or 12 font, with 1.5-line spacing.
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 The report is limited to 1000 words; this excludes the Executive Summary. Any report
longer than this will be penalised.
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 The report is to include an Executive Summary of no more than 200 words.
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 Due Date for hardcopy: Friday 17th of April,2020 11.00PM (FIJI TIME)
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 Softcopy uploaded on Moodle (The member whose name is written first on the
cover page of the submitted assignment is to upload the softcopy on moodle)
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 The assignment is to be done in a group (3 to 4 members only).
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 Reports to be done in a professional manner with sub-headings and clearly defined
sections. Be succinct and clear. Reports must be word-processed, not hand written,
word size 12 with ‘Times New Roman’ font type and 1.5 spacing.

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Assignment Question

You are a financial analyst for Goldgoldon Investment Ltd. You have been given a project to
analyse one of the firms listed on the South Pacific Stock Exchange (SPSE). You are then
required to recommend whether or not to invest in the particular firm based on your analysis.

Assignment Details

The assignment provides an opportunity to get some practical experience applying

corporate finance principles to real firms. In the process, you will get a chance to

 Evaluate the risk profile of the firm, and examine the sources of risk;
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 Analyse the firm’s stockholders;
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 Examine the firm’s investment choices.

The Firm

 The firm must be listed on the South Pacific Stock Exchange (http://www.spse.com.fj/)
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 Select a firm that has plenty of publically available information with annual reports
published for the year 2018 (pick one annual report only; 2018)
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 Do not select a firm in the financial services industry.
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 Do not commence your work until your listed firm is confirmed by your course
coordinator.

Objectives of Assessment Task

 Develop critical and analytical skills relating to the topic areas addressed in the course
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 Develop various research synthesizing skills
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 Communicate clearly and effectively

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Questions to Guide your Analysis

1. Firm Analysis

 Type of business and nature of operation

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 Who is the average investor in this firm (Individual or pension fund, taxable or
tax-exempt, small or large, domestic or foreign)

 Is this company where there is a separation between management and ownership? If

so, is there evidence of conflict of interest between management and shareholders?

2. Risk and Performance

 What is the risk profile of your firm? How much overall risk is there in this firm?
Where is this risk coming from? How is the risk profile changing?
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 Based on its stock price, do you think this company has performed well over the
past three years? Why?

3. The following specific industry norms are available in SPSE and used as benchmarks
in this analysis:

- Liquidity: Current Ratio

- Leverage: Debt/Equity

- Profitability: Profit Margin, Return on Equity, Return on Assets;

- Market Value: Price/Book value, Price/Earnings, Dividend Yield.

Students will report on how the company performs as compared to the industry norms and
where the company stands relative to its competitors in the industry. The company’s weak
and/or strong areas of performance must be identified and recommendations for improvement
presented.

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 See table 3 below for a sample industry comparative analysis.
TABLE 3: COMPARATIVE ANALYSIS

Performance Area Your Company Comparable Comments

Company (either
SPSE or ASX)

Leverage:

Debt/Equity (%)

Interest Coverage

Liquidity
Current Ratio

Profitability:

Profit Margin (%)

Return on Assets (%)

Return on Equity (%)

Market Value:

Price/Book Value

Price/Earnings

Dividend Yield (%)

4. Valuation

 Considering the company’s dividends, what growth pattern would you pick for this firm?
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How long will this growth last?
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 Do you think the firm is correctly valued by the market? Why?
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Marking Criteria
This assignment will be marked according to the following guidelines:
1. Content which includes the quality of source material, clear and precise identification and
evaluation of relevant issues and arguments raised as bases of conclusions.
2. Presentation of the assignment should be logical and coherent (headings can be used
to facilitate this requirement).
3. All parts of the assignment should be integrated.
4. Writing style, including English expression, spelling and grammar.
5. Overall quality of presentation which should include compliance with
assignment instructions.
6. Compliance with USP regulations as outlined in your Course Outline.

Comments Marks
Content 10
Writing Style 5
Presentation:
Integration of parts of the assignment 15
Major arguments and conclusion with 20
supported financial calculations.
Total marks 50

Note:
2 marks will be deducted each day for any late submission.
0 marks will be awarded for any plagiarism.
Assignment Cover page should be attached to the assignment. This is available on moodle.

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