FINM036 Assessment Two 50% of total marks
Type: Individual report
Max word count: 2,500 words
Aim : To test knowledge and understanding of key accounting and corporate finance concepts, theories and tools used to critically analyse organisations. It will also test your ability to analyse non-financial information
Outcome of the assignment / Conclusion: You need to make an impression on the board of directors for you to be considered for the critical post of Finance Director.
SECTION A (~ around 2000 words)
⦁ Select a company form the list provided to you below (Singapore stock exchange (SGX) company ONLY).
If you select a company outside of the list below, you will automatically fail this part of the assignment, unless you get a prior written approval from your tutor.
⦁ Give an introduction of the selected company (about the product or services, location, turnover, number of employees). Also comment little bit on the major competitor for your company(~ 200 words)
⦁ Make a horizontal analysis and vertical analysis (of Profit and loss account and Balance sheet) for immediately preceding five years (2016, 2015, 2014, 2013, 2012) Get a trend of the sales, profits, assets and liabilities. Comment on the trend (increase or decrease). Compare the trend to the industry (Sector) / GDP of Singapore (~ 100 words)
Please refer to the slides that is published on Edmodo / base camp for examples of horizontal analysis and vertical analysis (also attached in this sheet)
ALL RATIOS OF YOUR SELECTED COMPANY MUST BE COMPARED EITHER WITH INDUSTRY (SECTOR) AVERAGE OR WITH THE COMPETETOR.
⦁ Identify profits (~ 100 words)
⦁ Comment on the economic condition (ups and downs in the market of your selected company) – Example: If you have selected Singapore airlines, then comment on the airline industry. (~ 100 words)
⦁ For the preceding 5 years calculate the Financial ratios and comment on the ratios as shown below in sample analysis.
⦁ Use any of the below 4 ratios for commenting on profitability.
PROFITABILITY (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR) (~ 200 words)
Gross profit ratio
Net profit ratio
Return on assets
Return on Equity / Return on Investment
Return on ordinary shareholders’ funds
⦁ Identify Dividends (~ 200 words)
⦁ For the preceding 5 years calculate the divided related ratios and comment on the ratios as shown below in sample analysis.
⦁ Use any of the below 4 ratios for commenting on dividends
DIVIDEND RATIOS (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR)
Dividend Yield ratio
Dividend Payout ratio
Price earnings ratio
Earnings per share ratio
Dividend Cover ratio
⦁ Identify stability and Liquidity (~ 200 words)
⦁ Comment on company’s short term and long term financial position.
⦁ For the preceding 5 years calculate the stability and liquidity ratios and comment on the ratios as shown below in sample analysis.
⦁ Use any of the below 4 ratios for commenting on stability and liquidity
Stability and Liquidity Ratios (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR)
Debt to Equity ratio
Interest coverage ratio
Net cash transition period ratio
Debt to market capitalization proportion ratio
Current ratio or working capital ratio
Quick ratio or acid test ratio
Absolute liquid ratio
Current cash debt coverage ratio
EFFICIENCY (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR) (~ 200 words)
Asset Turnover ratio
Current Asset turnover ratio
Stock or inventory turnover ratio
Debtor’s turnover ratio
Creditor’s turnover ratio
⦁ Also identify and comment on the following (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR) (~ 200 words)
Returns on Investment
Return on Assets
Return on Equity
⦁ Identify the asset value per share and the current market share price. (This will be available on the company website or google out. The annual report will have the yearend high and low values). Comment on the share prices of the company. Is it linear with the stock exchange indicator (STI – Strait times Index) (~ 200 words)
⦁ Consider non-financial parameters like KPI, SWOT, PESTLE, market share, customer loyalty, innovation, management capability, employee relations, quality and brand awareness and perceived value, CSR activities, sustainability activities, service quality, staff turnover, patents and trademarks, supply chain, R&D activities, etc….,
⦁ Make a comparative analysis, where-ever possible. (~ 300 words)
Section B (~ around 500 words)
⦁ Refer the website of selected company or Google any information about the company performance or any news that has impact on the company financial performance (Example: If you have selected Singapore airlines, — It acquired Tiger and Scoot which have substantial impact on SIA financials. Comment on the motives of acquisition). You need to provide the source of information. (~ 100 words)
⦁ Any critics , its impact on the brand and reputation as reported in the press (print, online and social media). You need to provide the source of information. (~ 100 words)
⦁ Refer to the corporate governance report of the company (Refer to the annual report of the company to access to this report) (~ 100 words)
⦁ Identify the directors – write a bit on their role and their impact on the company
⦁ Identify the non-executive directors – write a bit on their role and their impact on the company.
⦁ Based on the analysis of financial and non-financial parameters set your vision and strategic financial goals for the company.
Remember you need to make an impression on the board of directors for you to be considered for the critical post of Finance Director. The board of directors have asked you to write a report about your vision and strategic financial goals for the company in becoming a market leader in the sector in the future.
(~ 200 words)
It is essential that all sources of information are correctly referenced using the Harvard system.
The word count highlighted in yellow are indicative. However total count should not exceed 2,500 words
List of companies for Sep 17-18 cohort
SL No Company
1 DBS GROUP HOLDINGS LTD
2 GLOBAL INVESTMENTS LIMITED
3 GREAT EASTERN HLDGS LTD
4 NOMURA HOLDINGS, INC
5 PRUDENTIAL PLC
6 OVERSEA-CHINESE BANKING CORP (OCBC)
7 SINGAPURA FINANCE LTD
8 UNITED OVERSEAS BANK LTD
9 VALUEMAX GROUP LIMITED
10 UOB-KAY HIAN HOLDINGS LIMITED
11 BANYAN TREE HOLDINGS LIMITED
12 BREADTALK GROUP LIMITED
13 CAPITALAND LIMITED
14 CREATIVE TECHNOLOGY LTD
15 KEPPEL CORPORATION LIMITED
16 SEMBCORP INDUSTRIES LTD
17 SINGAPORE AIRLINES LTD