The basic requirement is to undertake general financial analysis comparing Myer Holdings Ltd (Myer) (ASX Code MYR) financial position and performance in Financial Years 2012 and 2011 compared to that of David Jones (ASX Code DJS) over the same period.
(Note: use the ‘Consolidated’ data in conducting their analysis.) The analysis must consider each of: profitability, asset efficiency, liquidity, capital structure, and market performance. Analysis and interpretation.
Note that for those 2011 ratios that involve Balance Sheet figures students would require the 2011 annual statements (in addition to the 2012 report) to provide 2011 beginning-of-year balance sheet figures.
The assignment would contain two main elements:
Schedule(s) of relevant ratios and other useful calculations
The detailed calculation of appropriate ratios and other useful calculations must be included as one or more appendices prepared using Excel or a similar spreadsheet. You are advised to show formulae used in determining particular ratios and other figures. Data items (for example ‘Sales Revenue’ or ‘Total Assets’) must be entered in a single cell in a specially designated ‘data area’ in the spreadsheet, with any calculation referencing the relevant data cell.
A written report
The written report must:
Describe briefly what is revealed by ratios and other calculations in context of the company’s profitability, asset efficiency, liquidity, capital structure, and market performance. In particular, any significant changes over period 2011 to 2012 must be identified, discussed and, where possible, explained.
Give an overall assessment of whether company’s performance over the 2012 financial year have been better than 2011, and which company has improved its performance to a greater extent over this period. The judgement must be made from perspective of existing equity investors (shareholders).
Other guidelines
The assignment is to comply Presentation of Academic Work (revised edition 2011) and the written report is not to exceed 3,000 words. You are encouraged to seek and use extra public information about company from sources other than annual report (for example, from the internet, newspapers, and business magazines). Though, it is not envisaged that would be engaged in extensive research of this nature and it is expected that annual report would be primary resource relied upon in completing the assignment.
You are asked not to try and make direct personal contact with either company (for example by telephone, fax, letter or email) in an attempt to gather further information.
Do not reproduce company promotional material from the annual report or company website and represent it as critical analysis. It is not!
Students are expected to obtain relevant share price data for the company so that investment ratios (such as a price earnings ratio) can be calculated. (It is recommended that students obtain the company’s share price as at the 2012 and 2011 balance dates for the purpose of calculating relevant ratios on these dates.
Share price data is available from a variety of sources including the internet.
You may find it useful to consult accounting references, in addition to the prescribed text, which deal with the analysis and interpretation of company financial reports.