ASSESSMENT MGT6000 MANAGING FINANCE

ASSESSMENT MGT6000 MANAGING FINANCE

Case Analysis

2000 words

Companies Allocated

  1. James Hardie Indust Chess Depositary Interest 1:1 Material
  2. Carsales.Com Limited – Information Technology

Context:

You are expected to prepare a Report based on the following case.

The Case Analysis requires students to apply their knowledge of key finance concepts such as corporate governance, financial statement analysis, risk and return and valuation of shares to an analysis of two companies that are listed on the Australian Securities Exchange (ASX).

You are required to select two companies in two different sectors from the ASX100 list of 1 July 2019 (list of companies provided at the bottom). These are the top 100 Australian companies by market capitalization as of that date.

Instructions:

  1. Perform a comparative analysis of the corporate governance at the two companies using information on the composition of the board of directors, composition of executive management, executive remuneration and the value of the corporate governance index. Using information obtained plus academic literature, form an opinion on which company has better corporate governance. (10 marks)
  1. Using annual reports perform a comparative financial statement analysis of the two companies over the period 1 January 2014 to 31 December 2018. You are expected to determine two ratios from each ratio class. (10 marks)
  1. Determine the historical expected return, Beta and standard deviation of the companies’ shares using monthly data for the given 5-year period (i.e. 1 January 2014 to 31 December 2018). (10 marks)
  1. Using qualitative and quantitative information, some from previous calculations, and any other relevant information perform a valuation of the two companies’ shares using two approaches:
  1. Discounted cash flow approach – any one technique. (10 marks)
  2. Relative valuation approach using the price earnings ratio. (10 marks)
  1. Assuming you inherited $800,000 from your late aunt, which of these two companies’ shares would you invest in? Justify your answer. (10 marks)

In addition to the above, you will also be assessed on the following: (see Learning Rubric at the end for more description of expectation).

  1. Content, Audience and Purpose. (5 marks)
  2. Critical reasoning, presentation and defense of an argument and/or position. (10 marks)
  3. Analysis and Application with synthesis of new knowledge. (15 marks)
  4. Use of academic conventions and sources of evidence. (5 marks)
  5. Effective communication. (5 marks)

Instructions:

This assignment must adhere to the following:

  1. The assessment should be written in a Business Report Format. (Word or PDF format acceptable).
  2. The assessment has to be properly referenced using the APA referencing style. Please note, Wikipedia and Investopedia are not acceptable academic sources. The reference list, graphs, tables and appendices are not included in the word count.

Note please use the two companies I have provided bellow:

Companies Allocated

  1. James Hardie Indust Chess Depositary Interest 1:1 Material
  2. Carsales.Com Limited – Information Technology

NOTE :

Example of how to perform calculations for Part C of the Assessment. My example is on Herron Resources but You are required to  use data for the companies allocated to you to perform similar calculations. The expected return is the average return over the 5-year period. Remember the data is monthly.

To Calculate Beta you can use the formula for beta which is Cov (Ri, Rm) divided by Variance (Rm) or perform Regression analysis of Ri against Rm. You do not have to do both since they give the same answer. I did both for illustration purposes.

Companies Allocated

  1. James Hardie Indust Chess Depositary Interest 1:1 Material
  2. Carsales.Com Limited – Information Technology

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