FUNDAMENTALS OF VALUE CREATION IN BUSINESS ASSIGNMENT - ACCOUNTING STRATEGIC CHANGES AND FIRM PERFORMANCE
Requirements - The following is a list of companies from the latest ASX. These companies are carefully chosen to suit this project and the learning outcomes of the unit.
HVN - Harvey Norman Holdings Limited
1. Download the company financial data from Data Analysis (also known as Morning Star) for your analysis. The data shall include items from balance sheet, income statement, cash flow statements and relevant ratios for the latest 6 years. Note that you will have to download 1 year extra to be able to run a 5-year analysis. You may want to refer to Data Analysis data download guide in this document.
2. You are encouraged to analyses the company beyond the reported financial figures. It is advisable, but not limited, to look for further information on ASX, the company's annual reports, highlights from Passport, from the company's own website.
Tasks -
1. For the latest 5-year period, analyse any two significant items each from these financial statements of the company you are assigned to:
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Statements
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Example of items to analyse
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Balance sheet
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2 items: e.g., 1. Growth of property, plant and equipment (PPE), and 2. Growth of long term liabilities.
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Income statement
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2 items: e.g., 1. Retained earnings, and 2. Operating expenses.
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Cash flow statement
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2 items: e.g., 1. Cash at the year end, and 2. Net financing cash flows.
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2. For the latest 5-year period, analyses 2 ratios each from these categories:
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Ratio categories
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Example of ratio to analyse
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Profitability
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2 items: e.g., 1. Return on equity (ROE), and 2. Net profit margin.
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Liquidity
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2 items: e.g., 1. Current ratio, and 2. Acid test (also known as quick ratio).
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Solvency
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2 items: e.g., 1. Debt ratio, and 2. Net interest cover.
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Note: Each ratio does not sit in a vacuum. One ratio is interlinked with other ratios of different categories. Therefore, you may need to draw in more than 2 ratios in each category to provide substantive reasons and discussions. Industry average and competitors' data also form a good platform to put your discussion into perspective. For example, a large difference between current ratio and quick ratio can be explained by inventory build-up. This can be confirmed by looking at inventory turnover (in days) which is longer compared to its competitors or the industry average. In that case, it could mean the company has difficulties to attract customers, which can also explain why it provides a longer credit term (receivable turnover).
3. Present your analyses in a form of a professional report for a manager of a company. Charts and tables are encouraged. Your report should have the following sections (maximum possible marks are in the parentheses).
3.1. Cover sheet which clearly identify all group members, class/campus, and your teaching lecturer.
3.2. Executive summary.
3.3. Introduction.
3.4. Income statement analysis.
3.5. Balance sheet analysis.
3.6. Cash flow statement analysis.
3.7. Profitability analysis.
3.8. Liquidity analysis.
3.9. Solvency analysis.
3.10. Conclusion.
3.11. There are also 2 marks (maximum) for grammar/spelling/sentence structure; and 2 marks (maximum) for presentation/formatting/word limit
4. Other criteria for the report: 4.1. Must not exceed 4000 words, excluding table of content, references and appendices, but inclusive of item 3.2 to 3.10.
4.2. Line spacing: 1.5.
4.3. Font-face and size: Calibri, Arial, or Times New Roman with 12-point (for body).
4.4. Citations and referencing style: APA 6th Edition.
5. Only one copy of the report should be submitted for every group.
Attachment:- Assignment Files.rar