BFA526 Financial Reporting and Analysis Assignment Paper

BFA526 Financial Reporting and Analysis Assignment Paper

               

 Weight:     Part 1 – 20%                

                   Part 2 – 20%      





Word limit:  3000 words in total (Part 1 & 2)

The title page, reference list and appendix are not included in the word count. Word count guides for each section are presented below.  These are recommendations only.





REQUIRED

An investor is keen to buy shares in Wesfarmers Limited and has asked you to investigate the organisation.  You will advise her on the potential investment, basing this information on your analysis and interpretation of the financial statements for the last three available years, and any other information that you deem important in her decision-making.

Part 1



Provide an overview of the company and its operations (max 400 words).
Identify, explain and critically analyse any use of corporate social and environmental responsibility reporting by the company (max 600 words).
Calculate and present the results of financial statement ratio analysis for the company using the ratios in Table 1 (below).
Use your own table to present the results of your analysis (for 3 years). Do not show the detail of your calculations in this table (refer to point 4).
Use the ratio formulas provided on page 324-326 of your text (Hancock et al 2015) for your calculations.
Create an Appendix to show the details of the ratio calculations, the formulas and data used to complete the financial statement ratio analysis. This may be an Excel worksheet but is not limited to that format.
Explain how each of the ratios helps an investor in their decision-making, without specific analysis at this stage (max 500). In other words, define and explain the ratios. This section must be referenced by more than one source.
Use correct in-text referencing and provide a Reference List in accordance with the Harvard Referencing System. Use the Harvard Referencing Guide from the University of Tasmania’s Library website.
Table 1 Ratios used in the financial statement analysis

Profitability    Net profit margin
Return on assets
Return of ordinary shareholders’ equity
Asset turnover
Efficiency    Accounts receivable turnover
Inventory turnover
Short-term solvency    Current ratio
Quick ratio
Cash Flow from operations to current liabilities
Long-term solvency    Debt to equity
Debt to total assets
Leverage ratio
Market-based ratios    Price/Earnings ratio
Earnings yield
Dividend yield
Part 2



Provide a full formal report by incorporating the information from Part 1 of this assignment, adjusted with the feedback we have provided.
Structure the report as follows:
Title page
Executive summary
Table of contents
Introduction (from Part 1):
Overview of the company and its operations
Corporate social and environmental reporting analysis
Analysis of the company over three years:
Overall results (your table for 3 years from Part 1)
Profitability (for each of the sections ii-iv, you should include your explanations of the ratios from Part 1)
Efficiency
Short-term solvency
Long-term solvency
Market-based ratios
Other analyses (possibilities include trend analysis and benchmarking but you are not limited to these)
Conclusions
Recommendations and limitations
List of References (Harvard Style of referencing)
Appendix (your data and workings for the ratios from Part 1)


FURTHER INFORMATION

Use the consolidated financial statements not those of the parent company.
Recognise the limitations of ratio analysis and be critical of the information provided for your analysis.
Do not limit your analysis to the Annual Report of the company.
Be concise in your writing. Use graphs and other graphics to help deliver the message of your report.


Follow the rubric provided.




Rubric for Financial Reporting and Analysis BFA526 Assignment

Criteria    HD (80-100%)    DN (70-79%)    CR (60-69%)    PP (50-59%)    NN (<50%)
In your formal report, you:    In your formal report, you:    In your formal report, you:    In your formal report, you:    In your formal report, you:
2a. Analyse information contained in internal and external financial reports.    Provided a comprehensive description of the company and its operations from a variety of sources.  Noted any extenuating circumstances. Very well written.    Provided a good description of the company and its operations from a variety of sources.  Noted any extenuating circumstances. Very well written.    Provided a description of the company and its operations from a variety of sources.  Limited information on any extenuating circumstances. Well written.    Provided a description of the company and its operations from a variety of sources.    Answered inappropriately.
Calculated more than 80% of the profitability ratios correctly.    Calculated between 70-79% of the profitability ratios correctly.    Calculated between 60-69% of the profitability ratios correctly.    Calculated between 50-59% of the profitability ratios correctly.    Less than 50% of the calculations were correct.
Calculated more than 80% of the efficiency ratios correctly.    Calculated between 70-79% of the efficiency ratios correctly.    Calculated between 60-69% of the efficiency ratios correctly.    Calculated between 50-59% of the efficiency ratios correctly.    Less than 50% of the calculations were correct.
Calculated more than 80% of the short-term stability ratios correctly.    Calculated between 70-79% of the short-term stability ratios correctly.    Calculated between 60-69% of the short0term stability ratios correctly.    Calculated between 50-59% of the short0term stability ratios correctly.    Less than 50% of the calculations were correct.
Calculated more than 80% of the long-term stability ratios correctly.    Calculated between 70-79% of the long-term stability ratios correctly.    Calculated between 60-69% of the long-term stability ratios correctly.    Calculated between 50-59% of the long-term stability ratios correctly.    Less than 50% of the calculations were correct.
Calculated more than 80% of the market-based ratios correctly.    Calculated between 70-79% of the market-based ratios correctly.    Calculated between 60-69% of the market-based ratios correctly.    Calculated between 50-59% of the market-based ratios correctly.    Less than 50% of the calculations were correct.
Explained the meaning of the ratios very well.    Explained the meaning of the ratios well.    Explained the meaning of the most of the ratios well.    Explained most of the ratios.    Answered inappropriately.
2b. Identify limitations and biases inherent in the information contained in financial reports.    Identified many limitations of using financial information for decision-making in a concise yet compelling manner.  Used various examples to highlight the argument.    Identified several limitations of using financial information for decision-making.  Presented an argument and used examples.    Identified some limitations of using financial information for decision-making. Used at least one example.    Noted some limitations of using financial information for decision-making.    Answered inappropriately.
2c. Use financial information and financial models to make decisions about the efficient and effective allocation of economic resources.    Clearly and concisely drew information from the financial analysis to give strong advice to the client. The reasoning behind the decisions was evident.  Referred to the report to support this advice.    Clearly and concisely drew information from the financial analysis to give strong advice to the client. Referred to the report to support this advice.    Clearly and concisely drew information for the financial analysis to give strong advice to the client.    Drew information from the financial analysis and report to give advice to the client.    Answered inappropriately.
2d. Identify, explain and critically analyse contemporary ethics and social responsibility in accounting    Presented critical information in relation to the organisation’s corporate social and environmental responsibility reporting and used this information to form a strong opinion.  The information was gathered from many sources.    Presented critical information in relation to the organisation’s corporate social and environmental responsibility reporting and used this information to form a strong opinion.  The information was gathered from a few different sources.    Presented some information in relation to the organisation’s corporate social and environmental responsibility reporting and used this information to form an opinion.  Used at least one source of information outside of the financial reports.    Presented some information in relation organisation’s corporate social and environmental responsibility reporting.    Answered inappropriately.
3a. Communicate reports on financial information, decision and recommendations to internal and external stakeholders (users), support by reasons and calculations.


Complied an outstanding written formal report with financial statement analysis.  Made very strong and clear decisions and recommendations for an external stakeholder. This report was supported by reasons and calculations.    Complied a very well written formal report with financial statement analysis.  Made strong and clear decisions and recommendations for an external stakeholder. This report was supported by reasons and calculations.    Complied a well-written formal report with financial statement analysis.  Made clear decisions and recommendations for an external stakeholder. This report was supported by reasons and calculations.    Complied a formal report with financial statement analysis.  Made decisions and recommendations for an external stakeholder. This report was supported by reasons and calculations.    Answered inappropriately.

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