BAO1101: Accounting - Sharemarket - Company Research - Assessment Answer

Accounting Assignment

Assignment Task

PART 1 SHAREMARKET ASSIGNMENT SHEET

Select a share portfolio consisting of one company from each group listed above. The total value of your portfolio should add up to $10,000 worth of sharesfor group of 2 students or $15,000 worth of sharesfor group of 3 students based on the closing share prices posted on the ASX website on Friday 12 August 2016. Check after 6pmto ensure that the latest price has been updated.

During the tracking period, Friday 12 August 2016 to Friday 9 September 2016, your team is to monitor the performance of the shares and the overall performance of the Australian share-market. Can you maximize the value of your share portfolio?

PART 2 COMPANY RESEARCH / GRAPHS / INVESTOR INFORMATION

A brief description of each company in your team’s portfolio. It should be presented as a comparative tableand should include:-

• Products And Services Provided By The Company [brief outline]
• Name Of Chief Executive Officer [or Managing Director]
• Salary of Chief Executive Officer [or Managing Director]
• Profit / Loss after Tax from 2015 Annual Reportfor the full financial year – consolidated figures
• Latest Dividend Paid – Dividend Per Share and Date Paid
• Size Of The Business By Total Assets – from 2015 Annual Report– consolidated figures
• Number Of Employees
• Share Price – 52 week High And Low on 9 September 2016- from The Age Business section link below:-

[B] For the tracking period only, using an Excel spreadsheet, prepare your own graph of the daily share price movements for each of your shares. Information should be shown in a table with separate columns for Date and Closing Price ($). For the tracking period only, using an Excel spreadsheetprepare your own graph of the daily movement of the ASX200 Index. Information should be shown in a table with separate columns forDate and Closing Value [points]. Copy and Paste Excel Tables and Graphs into a Word Document to include in your report.

[C] For each company, provide an overview of the share price performance and describe the overall trend of the Australian share-market over the tracking period. Describe how each of your shares performed against the ASX200 Index. Explain major movements in your share prices and the share-market with evidence from newspapers, business magazines, internet information or other relevant sources. Evidence should be included and news articles should be photocopied (see p.21 to 24 of your Subject Resource Workbook) and neatly presented in an appendix to your report.Harvard Referencing is required to acknowledge all sources of information used. Please be aware of penalties for Plagiarism. See “Harvard Referencing” links on BAO1101 website.

[D] Calculate the Gain or Loss made on your portfolio during the tracking period.

[E] Provide a recommendation [buy / sell / hold] for each of your shares.

Support each recommendation with relevant information you have found in Part [C].

PART 3 – IDENTIFICATION OF KEY FINANCIAL DATA AND RATIO ANALYSIS

[A] IDENTIFICATION OF KEY FINANCIAL DATA

For each company you have selected, complete the following table of Key Financial Data.

Find the figures from the 2015 Annual Reportwith results for the full financial year for 1 July 2014 to 30 June 2015

The “consolidated” figures are required.

References are required to identify the source of all figures in your table.

Attach Consolidated Income Statement and Balance Sheet for each company with relevant figures highlighted. This must be included in the appendix of your report.

[B] RATIO ANALYSIS

From the Key Financial Data, calculate relevant ratios provide an overview of each company’s:-*Profitability *Stability *LiquidityAt least 6 ratios for each company should be used for this overview. The ratios may vary depending on the availability of information provided in each company’s Financial Statements.For each of the headings listed above, your overview should identify the name of the ratio used and interpret your results. Provide an explanationof why these ratios may differ between your companies. Which do you consider to be the better investment? Explain your reasoning.

All formulae and calculations must be clearly shown.

GENERAL PRESENTATION

BONUS INCENTIVE / LATE PENALTY

C] Overview Of Share Performance / Trend of Share-market

Qantas Airlines has over the period from 12^thAugust 2016 to 9^thSeptember 2016 has seen a very small and gradual growth. The growth in the share prices has been very limited and small. The shares have increased by 3% during this period of one month. The prices have seen a gradual growth over the period. There have been very limited and sustained changes in the prices of the share. It has also seen a downfall during this period. The share prices rose during the first two week but saw a fall during the third week starting 29^thAugust 2016 but they again gained during the fourth week to close at $ 3.31 per share. This shows a again of $ 0.10 during this period. In comparison ASX200 also had a very similar trend during the period it also rose during the first two weeks of the period and had a fall in the third week. The price of ASX 200 saw a fall of $ 0.28 over the period of one month into consideration. ASX200 did not have major impact on the prices of Qantas Airlines. It is evident from the fact that the prices for Qantas have rose in contrast to the falling prices of ASX200. Speaking about the overall trend of Australian Share Market it can be said that it was pretty much stable with not many changes. The changes though being there were very limited and can be said to be mainly because of the buying and selling of the shares by different investors. The market players had a very limited impact on the prices of the shares in the market. The market was stable and good for investment. Such a market condition is best suited for making investment as the prices are not influenced.

[D] Calculation Of Gain / Loss On Portfolio

The amount invested in the above shares will result in gain of 3.12% on the investment or it can be said that the investor will $ 0.10 on each share

[E] Recommendation On The Share

The price movement of Qantas suggest that they are a stable and risk free investment option and would result in limited returns. They should form part of the portfolio as every portfolio should consist of different types of stock. Qantas has a good return seeing the market trend. In a non-volatile market, share with limited return and low risk are the best for investment.