The assignment must be completed as an individual assignment. There is a specific writing style and required to write an executive report. Word limit is 1500 words. Please do not repeat the question in your answer, and simply provide the answer.
Students are not allowed to either directly or indirectly contact the companies for which annual reports are used in this assignment. Students are also not allowed to contact analysts directly or indirectly to gather information and/or advice about this assignment. Students must base their analyses purely on the information that is provided on the company's website and/or on the Australian Stock Exchange.
In all your calculations, show the absolute figures from the financial statements. Also support any arguments with absolute figures from the financial statements.
Retain a copy of your assignment for your records.
â€¢ Spend time unnecessarily paraphrasing any information provided in the course material and textbooks.
â€¢ Just simply identify and mention the issue. You need to elaborate on it, explain exactly what you mean and justify your arguments with the help of literature where appropriate.â€¨â€¨â€¨
â€¨Please keep in mind that marking is done in soft copy, hence allocating marks for the formatting. To obtain these marks, ensure you comply with the following:
â—¦ Font: Time New Roman, 12 point, 1.5 line spacing
â—¦ Document submitted onto Moodle must be in Word format, allowing the marker to use track-changes to provide comments and indicate where you received marks. Please do not submit a pdf document or copy from another source such as for example include screen shots of calculations done in excel. The track-changes function cannot be used to do the marking in these and hence only information created in Word will be marked.
â—¦ Page: portrait orientation
â—¦ Footer: Your full name and student ID, page number and number of pages (i.e. Pat Bird s0123456, page 1 of 3)
â—¦ Marking criteria sheet is completed and attached as the first page of the assignment. â€¨
Please note: 3 marks are allocated for complying with formatting and submission requirements.
Your task is to compare and contrast the historical (for the last 2 years - 2014 and 2015) and expected future performance of BHP Billiton Limited (a listed company) and Rio Tinto Limited (a listed company) a competitor in the same industry, and present your findings in the form of an executive report which will cover quantitative performance elements in a logical cohesive format.(Word limit is 1500 words). Please use the figures provided in the most recent annual reports. You must use the ratios and formulae given in chapter 8 of the prescribed textbook. Show all the formulae and absolute figures used in calculating all the ratios as an appendix. You do not have to show any graphs to illustrate trends in the ratios. Show ALL your calculations. You will note marks are provided for correct figures. Partial marks can only be provided if you provide your workings and the marker can identify where you went wrong in the calculations.
The executive report based on quantitative analysis should include (butis notconstrainedto):
â€¢ An executive summery
â€¢ A brief introduction on each company including how they are placed within the industry.
â€¢ An initial analysis of trends in the items contained in the profit and loss statements, balance sheets and statements of cash flows; appropriate relevant ratios measuring Profitability (Return on Assets and Net Profit Margin), Liquidity (Current Ratio and Quick Ratio), Capital structure (Debt to Equity Ratio and Equity Ratio) and Market performance (Earnings per share and Dividend per share).
â€¢ A highlighting of the most important changes within these ratios and an identification of the reasons for these changes. A comparison of the quantitative analysis for the two companies on Profitability, Asset efficiency, Liquidity, Capital structurean identification of the reasons for any differences.
â€¢ Conclusions - You should include a conclusion in which you comment on the strengths and weaknesses of your overall analysis encompassing what your analysis has accomplished and what are its limitations.
â€¢ Recommendation.Taking into account the quantitative analysis, you are required to make a recommendation which will fall into one of the following three categories:â€¨1.Invest in the companyâ€¨2.Invest in the competitorâ€¨3.Invest in neitherâ€¨â€¨
When you prepare the executive report based on quantitative analysis, you will be able to get some important data and information from following web sites (butis notconstrainedto):â€¨Industry standards - from the IBISWorld website http://clients1.ibisworld.com.auâ€¨Amigobulls 2015, 'Rio Tinto Balance Sheet' http://amigobulls.com/stocks/RIO/balance-sheet/quarterlyâ€¨Amigobulls 2015, 'Rio Tinto Income Statement' http://amigobulls.com/stocks/RIO/income-statement/annualâ€¨â€¨ASX 2015, 'BHP Billiton Limited' http://www.asx.com.au/asx/research/company.do#!/BHPâ€¨ASX 2015, 'Rio Tinto Limited' http://www.asx.com.au/asx/research/company.do#!/Rio
Making Criteria sheet
Knowledge and understanding (2 marks)
Reasoning and analysis (10 marks)
Profitability analysis: two ratios (1.25 marks for each ratio, 0.625 marks per year for correct figures)
Liquidity: two ratios (1.25 marks for each ratio, 625 marks per year for correct figures)
Capital structure: two ratios (1.25 marks for each ratio, 625 marks per year for correct figures)
Market performance: two ratios (1.25 marks for each ratio, 625 marks per year for correct figures)
Writing skills and presentation (2 marks)
Cohesiveness (2 marks)
Referencing, use of references and background reading(2 marks)
Submission requirements(2 marks)