Financial Statement Analysis Assignment -
Learning Outcomes -
- Develop an understanding the purposes of accounting information analysis, capital markets information, and the application of the knowledge to decision making through the integrate theoretical and technical accounting knowledge particularly in the area of financial accounting information at a professional level.
- Apply the range of techniques employed in financial statement analysis and the role of both financial and non financial data to describe, explain, interpret and analyse financial statements for investment decisions.
- Apply the information literacy and numeracy skills required by financial analysts by extracting relevant data from business sources, identifying and evaluating information sources, and utilising financial mathematics and analytical techniques.
- Utilise the basics of financial statement analysis techniques that include data gathered through researching for other more recent information.
Using Mornington Star DatAnalysis, select two companies in the same industry sector that MUST have an accounting period from 1 July to 30 June each year. Perform Strategy analysis, including industry-level analysis and firm-level analysis, as well as an accounting analysis, using the five years of data provided by MorningtonStar DatAnalysis for these two companies. The purpose for your analysis is to select one of the two companies for you to invest $25,000 in via the purchase of shares in this company.
You should follow the information and include the steps outlined in these chapters for some analysis. Also, you should use both the financial ratios provided, as well as calculate other ratios to support your decision (including answering the requirements for this case study). You should use an Excel spreadsheet if you need perform any calculations, which is an expected electronic tool used in commercial and professional employment positions. Please include as an appendix (or separate files) the two pdf files of the financial statements for the two selected companies. If you gather additional information this documentation should be loaded onto the submission site.
Your calculations should be submitted as a separate Excel file with your total submission. That is, you may wish to use a Word document for your analysis and an Excel file for your calculations (submitting two separate files). Your analysis should require a maximum of 1,500 words.
Requirements -
1. Perform a strategy analysis, including Porter's 'five forces' framework for industry-level analysis, competitive strategy analysis of the firm-level analysis (incorporating the source of the sustainable competitive advantage), and Corporate strategy analysis for the two selected multi-business organisations (adding the benefits and costs to the companies separate segments).
2. Perform an accounting analysis that addresses the six (6) steps in performing accounting analysis of the five components of the financial statements for the two selected companies.
3. Evaluate the quality of the financial statements of the two companies. Are you are happy with their quality? If yes, why and if no, why not?
4. Choose one company (of the two selected companies) you decide to invest your $25,000 and identify how many shares this will purchase. Construct your conclusions to support your selection of that company.