Assessment -02 -Case Study

Assessment 2- Scenario

Please read the scenarios below and answer the questions or complete the activities that follow. Should you have any questions please do not hesitate to contact your trainer.

Financial Modelling

Scenario 1:

 You work for Australian Super, one of Australia’s largest super funds. This Superannuation Fund is committed to passing on all good things that size has to offer. The vision of this organisation is:” Every Australian should have a solid financial future, so our purpose is to help achieve a better retirement outcome for all”.

Australian Super is committed to providing quality service by employing managers and specialist staff in- house and complements their expertise with external service providers.

Your manager has asked you to prepare a comprehensive financial model for the purpose of determining where $100 million dollars will be invested. The Strategic Plan for Australian Super over the next 3 years is the achieve 10% return on investment.

Your task is to choose 2 ASX listed companies from the list below. Using Microsoft Excel prepare a financial model to determine the value and ongoing viability of both companies for a period of 3 years. Make your recommendations as to your preferred organisation and explain your reasons.

  1. Develop an asset pricing model to determine the required or expected rate of return on the assets
  2. Determine the value in relation to the capital structure of both companies
  3. Determine in the theoretically appropriate rate of return will be 10% over the 5 years’ period from the purchase of shares in the organisation.
  4. The model should take into account the asset’s sensitivity to non- diversifiable risk, as well as the expected return of the market and the expected return of a theoretical risk- free asset.
  5. Detailed market analysis and other information to the support projected numbers
  6. Consider how the economic and political climate might relate to the financial industry when undertaking financial modelling.

 ASX Listed companies include:

  • Woolworths Ltd
  • Lend Lease Group
  • Toll Holdings                   
  • Goodman Groups
  • Qantas Airway

 

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