You are required to calculate key financial ratios for an ASX listed company and its competitor and interpret this information in the context of your allocated competitor company over time.You will be allocated two ASX listed companies to study for this assessment. You must do your allocated companies in the order they are allocated to you.
Imagine you work for the FIRST of these companies. The second is one of your company’s competitor.Your boss has asked you to calculate and assess the company’s key (your boss’s opinion) ratios relative to that of its competitor and provide recommendations for improvement if required. The key ratios you need to calculate for your company and your competitor are net profit margin, asset turnover, current ratio, quick ratio and debt ratio. Your boss also wants you to calculate the cash cycles. All workings for ratios and the cash cycles are required.
You focus your analysis on the companies’ 2016, 2017 and 2018 ratios mentioned above firstly in terms of their trend changes and also in comparison to your competitors ratios and benchmarks wherever possible.
In making your assessment consider potential differences between your company and its competitor that could explain divergent results. Where relevant, these should be noted.(For example, although the companies may compete in some of the same markets, they may also have different areas of business).you should in your own words explain a) the issues involved and relevance of using ratios, b) bench marking and c) the relevance of your particular identified ratios as part of your discussion.
Since your boss is a busy person and has little time to read lengthy reports, your submission for this task preferably should not exceed a range from 1,200 to 1,500 words. Of course it can be shorter than 1,200 words. Structure your submission as a short report that excludes title and contents pages. Ensure you fully reference any non-text book or non Data Analysis sources of data and information you use in this assessment.
Marks for this task are in accord with the separately provided marking guide.
Note : ACC10707 Business Analysis And Interpretation Assignment-Southern Cross University Australia
1. The Cash Cycle can be a little confusing and some text books use different methodologies for calculating the three elements of the Cash Cycle. For your convenience the formulas are a) Inventory being Current Inventory / Operating Revenue * 365 = ???? b) Accounts Receivables being Debtors / Operating Revenue * 365 = ???? c) Accounts Payables being Creditors / Operating Revenue * 365 = ??? Note that you still need to work out the cash cycle from these calculations.
2.For the net profit margin ratio use Net profit after tax before abnormal as the numerator.
3.You can put calculations in an appendix if you wish. These do not count in word count. Make sure of course that your final ratio answers form part of you main report.