Stock Analysis ,Accounting And Finance For Business Assignment

Allocate out the following stocks among all members of your team, with each member being responsible for at least one stock. Note the stock allocation on the front sheet.

ARB Corp Ltd                                          ARB (William) thats my company 

Automotive Holdings Group Ltd         AHG

AP Eagers Ltd                                         APE

Super Retail Group Ltd                         SUL

The assignment is divided into three case studies. Each team is required to provide an answer to each case study. Each case study is divided into several tasks, some of which must be completed individually in respect of each of the above listed companies, with each member of the team responsible for drafting an answer in respect of at least one of the listed companies above.  Other tasks require the team to come together to analyse the results provided by individual group members on each of the above listed companies. 

Please note however, it is a group assignment so prior to submission it is the responsibility of every member of the team to confirm that they agree with the answers provided by the team in relation to all stocks. This provides a wonderful opportunity for all team members to help each other develop some analytical and interpretative skills in respect to financial analysis.

Case Study 1

FACT SET

• Go to www.asx.com.au and look up the prices for your allocated stock in the Search field at the top right of the screen. 

TASKS

• In Table 1, enter the date and last price of each stock, then calculate the market cap, current P/E, and current dividend yield for each stock based on the last price.
• In Table 2, provide a definition explaining the information each data item provides you as a potential investor in the stock.  [Provide a single agreed answer per team.]
• Compare and contrast the current market value of each stock.  [Provide a single agreed answer per team.]

Table 2

• Definition/Explanation Mark
• Last Price
• Bid Price
• Ask Price
• Shares Outstanding
• Market Capitalisation
• Beta
• Earnings Per Share (TTM)
• Current P/E Ratio (TTM)
• Dividend Per Share (TTM)
• Current Dividend Yield (%)

Case Study 2

FACT SET

• Go to https://au.finance.yahoo.com and obtain the closing adjusted price for each of the four stocks on the 31st December for each year from 2009 to 2015.  

[Enter the stock code in the “Search” field at the top of the screen.  Click the “Historical data” tab. Adjust the time period to commence 1/1/2008. Ensure the show field is set to “Historical prices”; ensure the frequency is set to “Daily”. Click on the “Apply” button. Scroll down to find and record the December Adjusted Close Price for the last trading day of each December. You can download the data in Excel using the download data function.]

• Go to https://au.finance.yahoo.com and obtain the dividends paid by each of the four stocks for each year from 2009 to 2015.  

[Enter the stock code in the “Search” field at the top of the screen.  Click the “Historical data” tab. Adjust the time period to commence 1/1/2008. Ensure the show field is set to “Dividends only”; ensure the frequency is set to “Daily”. Click on the “Apply” button. Scroll down to find and record the dividends paid in each relevant year. ]

TASKS

• Calculate the Holding Period Return for each company for each year from 1st January 2010 to 31st December 2015.
• Estimate the Expected Return of each company based on your historical sample of returns.
• Estimate the risk of each company based on your historical sample of returns.
• Calculate the five-year Total Return to Shareholders of each company over the period from 31st December 2010 (Year 0) to 31st December 2015 (Year 5), using the following formula:
• Compare and contrast the risk and return of each company. [Provide a single agreed answer per team.]

Case Study 3

FACT SET

• Go to the website for your allocated company and obtain the Income Statement and Balance Sheet for the company for the 2009/10 (Year 0) and 2014/15 (year 5) financial years.  You will find this information in the relevant Annual Reports.

TASKS

• Based on the information contained in these statements calculate for each company:
  • The annual growth in Earnings per Share over the five years to 30th June 2015, using the following formula.

• The Net Profit Margin, Asset Turnover Ratio, Leverage Ratio, Net Debt to Equity Ratio and Return on Equity for the company for both financial years.
• Demonstrate what would happen to the 2014/15 Return on Equity and the Net Debt to Equity Ratios if your allocated company just prior to the end of the 2015 financial year raised an additional $50 million loan from the bank, which it invested entirely in new plant and equipment. Assume that the immediate effect on sales and net profit was zero.
• Demonstrate what would happen to the 2014/15 Return on Equity and the Net Debt to Equity Ratios if your allocated company just prior to the end of the 2015 financial year instead of raising the additional loan raised an additional $50 million through the sale of new shares to the public, which it used to pay for the new plant and equipment. Assume that the immediate effect on sales and net profit was zero.
• Compare and contrast the financial performance of the companies over the past 5 years. [Provide a single agreed answer per team.]
• Use your analysis of the financial performance of the companies over the past 5 years to explain any differences in the Total Return to Shareholder between the companies over the past 5 years, which you have calculated in Case Study 2. [Provide a single agreed answer per team.]