Question 1
The following numbers are extracted from the annual report of Omega Limited (in millions of dollars).
|
|
Fiscal 2015
|
Fiscal 2014
|
|
Total assets
|
19,042
|
18,184
|
|
Total liabilities
|
12,826
|
12,865
|
|
Total revenues
|
13,652
|
12,442
|
|
Common share issues
|
1,133
|
504
|
|
Common dividends
|
530
|
505
|
|
Common stock repurchase
|
1,385
|
1,385
|
The firm has no preferred stock.
(a) For fiscal 2015, calculate the comprehensive income.
(b) The shares of Omega was traded at $12.90 per share at the beginning of fiscal year2015 and closed at $9.85 per share at the end of the year. This firm paid a dividend of $13.5 cents per share during the year. What was the return ($) to holding Omega's shares during 2015? What is the rate of return on investment?
Question 2
Assume that you are interested to evaluate the stock of Woolworths Limited. Use your Curtin University Student ID and Password and go to Morningstar DatAnalysis Premium (https://datanalysis.morningstar.com.au.dbgw.lis.curtin.edu.au/af/dathome?xtm-licensee=datpremium).
(a) List three comparable firms for Woolworths. Justify the inclusion of these companies in your list.
(b) Calculate P/E ratio and P/B ratio of the all the companies in your list (use fiscal year end data of 2015. You can get the annual report either from the Morningstar DatAnalysis Premium or from company website or from google search. Please use share price data as on 19th September 2016).
(c) Based on your calculation and comparison, would you recommend to buy share of Woolworths?
(d) Observe the stock price movement of all your listed firms over the last three months. You are doing your analysis on 19th September 2016. Based on the observed price trend, use price screens analysis (covered in Week 2) to decide whether and which share to buy? Justify your decision.
(e) In reference to the above question (i.e., d) what will be your decision if you use Momentum screens?
Note: You may use other sources of data (in addition to/instead of Morningstar).
Question 3
The following table presents financial data from 2014 annual reports of six pharmaceuticals companies. The market value of equity for five companies is also given. All numbers are in millions of dollars. Using these numbers estimate a value for Syham Inc. Syham had a book value of $1,349 million in 2014.
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Company
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Market value of equity
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Price/Book
|
Revenue
|
R&D
|
Net Income
|
|
Acme
|
$8,096.71
|
5.6
|
$1,571.0
|
$307.0
|
$406.0
|
|
Lab Aid
|
1,379.00
|
3.6
|
152.0
|
101.0
|
15.0
|
|
Square
|
2,233.60
|
4.6
|
413.0
|
158.0
|
28.0
|
|
Aus Pharma
|
925.00
|
2.5
|
138.0
|
109.0
|
7.0
|
|
Genetic Inst.
|
588.53
|
4.5
|
151.0
|
81.0
|
34.0
|
|
Syham Inc.
|
?
|
?
|
795.4
|
314.3
|
124.4
|
Question 4
Maxim Inc. reported a per-share book value of $10.47 in its balance sheet on December 31, 2014. In early 2015, analysts were forecasting consensus earnings per share of $1.71 for 2015 and 1.96 for 2016. Assume a dividend payout ratio of 50% and required rate of return of 10%.
(a) Calculate the per share value in early 2015 assuming that residual earnings will grow at long-term growth rate of 4%, the average GDP growth rate, after 2016.
(b) Maxim Inc. was traded at $36 per share in early 2015. What is the forecast of the residual earnings growth rate after 2016 that is implied in the stock price of $36?
Question 5
(a) A firm reported $405 million in revenue and an increase in net receivables of$32 million.
What was the cash generated by the revenues?
(b) A firm reported wages expense of$335 million and cash paid for wages of$290 million.
What was the change in wages payable for the period?
(c) A firm reported net property, plant, and equipment (PPE) of$873 million at the beginning ofthe yearand$923 million at the end of the year. Depreciation on the PPE was$131 million for the year. There were no disposals of PPE. How much new investment in PPE was there during the year?