FINANCING ENTERPRISES

200910

AUTUMN 2019

GROUP ASSIGNMENT GUIDELINES

Copyright © 2019 by Western Sydney University. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without the prior written permission from the Dean, School of Business. Copyright for acknowledged materials reproduced herein is retained by the copyright holder.

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Due date: Turnitin (electronic submission ONLY) – Friday 24 May 2019 (Week 12) at 11.45 pm

Assessment Value: 20%

Topic: Analysis of Financial Performance

Length: 1,500 words excluding Reference List and Appendix

FOLLOW THE STEPS OUTLINED BELOW TO OBTAIN THE INFORMATION NEEDED FOR THE

ASSIGNMENT

1. Go to e-resources on the WSU Library website and from the alphabetical list click on “D” and then pick the DatAnalysis Premium database. Once you are in the database, go to the search engine on the top right- hand side and enter each the following company’s ASX code: - Farm Pride Foods Limited (ASX code: FRM) - Select Harvests Limited (ASX code: SHV) For each company, the displayed page summarises general information about the company including the sector and industry in which it operates, total market capitalisation of the firm, latest closing share price, etc. Both firms are operating in the same sector (Consumer Staples), Industry Group (Food, Beverage & Tobacco) and same Industry (Food Products). 2. On the left-hand side, click on “Financial Data”. The displayed page shows annual and interim information for your assigned companies (in the view bar, make sure you choose annual and not interim data). On the page’s control bar at the top, you will see the first three icons which displays the company’s summarised annual financial statements (income statement (profit & loss statement), balance sheet and the cash flow statement). Additional information, such as the number of shares outstanding at end of period is also given in these statements for different years. 3. The figures shown on the Financial Data page are rounded figures and are not to be used in the calculation of ratios. To access the raw figures, select the relevant time period from the ‘year range’ drop down bars, and click on ‘go’. Once the figures appear, click on download spreadsheet. This will download an Excel file that contains all the relevant financial statements i.e. Profit & Loss Statement, Balance Sheet, etc. 4. In the downloaded Excel file, you will see a sheet titled “Revenue Expense” in which you can locate the Cost of goods sold (COGS) for each company for the different years. Note: A company may also have Material and other input costs, which you will need to add to their Cost of goods sold to get the aggregate COGS for the company. 5. For more detailed information about how to obtain the data required for your group assignment, please watch the ‘How to Obtain Data for the Group Assignment’ video. The video is located in the Assessment Zone under the Assessment 2: Numerical Problem Solving link.

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REQUIRED

Your team has been hired as financial analysts by Crown Banking Corporation. The bank requires your team to analyse the financial position and performance of the above assigned companies for the previous two financial years (2017 and 2018), to determine whether the companies are eligible for a loan from the bank. Your task involves answering the following 5 questions in your own words (i.e. do not simply “cut and paste” information from the Annual Report or any other source). You must apply critical thinking concepts when explaining and justifying your choices. BA S E D O N T H E I N F O R M A T I O N AVA I L A B L E O N DatAnalysis Premium DATABASE F O R B OT H A S S I G N E D C O M PA N I E S , A N S W E R A L L O F T H E F O L L OW I N G Q U E S T I O N S ( 1 TO 5 I N C L U S I V E ) . QUESTION 1:

Analyse the sources of finance for each of the two companies in 2018 as compared to 2017. Use two capital structure ratios to support your answer and provide an explanation regarding the changes in the composition of the sources of finance for each enterprise. Note: ensure that you analyse in this question, not just describe the ratio values. (2 marks) QUESTION 2:

For each of the two companies, analyse their ability to successfully manage each of their categories of expenses in 2018 as compared to 2017. Use three margin ratios to support your answer and explain any change in the ability of each company to control costs. Note: ensure that you analyse in this question, not just describe the ratio values. (3 marks) QUESTION 3:

Analyse the ability of management to manage their fixed assets and total assets for each of the two companies in 2018 as compared to 2017. Use two Asset Management efficiency ratios to support your answer and explain any change in each companies’ ability to use their assets to generate sales. Note: ensure that you analyse in this question, not just describe the ratio values. (2 marks)

QUESTION 4:

Analyse the profitability of invested capital (Assets) for each of the two companies in 2018 as compared to 2017. Based on your calculations and your answers to questions 2 and 3, explain the main reason(s) for the change in the profitability for each company over the two years. Note: ensure that you analyse in this question, not just describe the ratio values. (3 marks)

QUESTION 5:

Given your answers and analysis in questions 1 to 4, what is your final recommendation: an approval or denial of the loan to each and/or both firms? Discuss the basis for your recommendation. (4 marks)

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NOTES

1. All ratios must be selected from those identified in your prescribed textbook (Bakry 2016). The use of ratios other than those identified in the textbook and discussed in class will not gain any marks. Include all supporting calculations for any values shown in Questions 1 to 5 in the Appendix. The Appendix is not included in the word count. Note: Marks will not be awarded if no supporting ratio calculations are shown in the Appendix.

2. In questions 1-4, an analysis is required and not just a description of the ratio. That means you need to

explain how the ratio changed over time and what are the main reason(s) for that change, and how that will impact the company’s financial position.

3. Question 5 requires you to synthesise the analyses from questions 1-4 to formulate a well-justified argument/conclusion, which is both logical and critical.

4. In calculating the ratios, assume that the Sales are the Operating Revenues (available in the Profit & Loss statement), and the Sales (i.e. Operating Revenues), for each year specified, are all on credit.

5. In calculating the ratios, ignore abnormals. You should only use figures before abnormals such as ‘Net

profit after tax before abnormals’.

6. Ratios calculated by the Morningstar analyst and available within the database are not to be used as guidance for calculating your ratios. The analyst has calculated some of the ratios using formulas different than the one covered in this unit.

7. The assignment does not require the obtainment of industry/peer group averages for any of the

calculated ratios. The objective of the assignment is to compare each of the two companies’ financial performance over the specified two-year period.

8. Reference List Include any references you have used and cited in your assignment. Make sure all answers are fully referenced using the Harvard referencing system, including in-text citations and a reference list at the end of your assignment. For guidelines on using the Harvard referencing system see https://library.westernsydney.edu.au/main/sites/default/files/cite_Harvard.pdf Note: the reference list is not included in the word count. 9. Group Assignment Cover Sheet Group assignments are to be submitted with a group assignment cover sheet. Assignments submitted without a cover sheet will not be marked. The Group Assignment cover sheet can be downloaded from the following link (click on Form Categories – Assessment – “Assignment Cover Sheet - fillable online”): http://www.uws.edu.au/currentstudents/current_students/forms

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SUBMISSION INFORMATION

ASSIGNMENT SUBMISSION

This assessment task is to be submitted online via the Turnitin link within the ‘Assessments - Group Assignment (20%)’ folder on vUWS. This assignment is an online only submission. The only acceptable file types are word files .doc, .docx. There is no need to hand in a hardcopy of your assignment to your tutor. Your submission should not be in any other format and should not include any pictures – all work, including the working out/calculations of the ratios should be typed in Word. Calculations that are handwritten will not receive any marks. The Turnitin link will be open from 10:00 am Monday 6 May 2019 and will close at 11:45 pm Friday 24 May 2019, which is the last day your assignment can be submitted. That is, the closing time and date to submit your attempt for the ‘Group Assignment’ is 11:45 pm Friday 24 May 2019. When the assignment is successfully submitted by your group leader, he/she will receive a copy of the digital receipt in his/her WSU email account. Keep the digital receipt for your records as it is your proof of successful submission. Upon first submission to the assignment link, an originality report will be generated within two minutes. Subsequent submissions will take up to 24 hours to receive a response. For links to videos outlining this process, please see the Help and Further information section below. Remember, the closing time and date for your group to submit their attempt to the ‘Group Assignment Turnitin link’ is 11:45 pm Friday 24 May 2019 (Week 12 of session). Note: Students are reminded that if any portion of their group assignment is found to be copied from another assignment or source (either from the current semester or previous semesters), it will be taken as plagiarism and will be reported to the School of Business as academic misconduct, as per University policy. STUDENT SUBMISSION GUIDE

http://library.uws.edu.au/FILES/turnitin/Turnitin_Student_Instructions.pdf Note: You must use a desk-top or laptop computer to access grades and feedback (not an iPad or mobile phone device). It is very important that only the group leader submits and resubmits the group assignment on behalf of all group members. Submitting the group assignment by multiple group members will receive a 100% match on your Turnitin originality report. DISCLAIMER

All online submissions via Turnitin are presented with a declaration to students at each upload via the Turnitin interface. The declaration is: By submitting your work using this link you are certifying that: • You hold a copy of this assignment if the original is lost or damaged.

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• No part of this assignment or product has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment. • No part of the assignment/product has been written/produced for you by any other person except where collaboration has been authorised by the subject lecturer/tutor concerned. • You are aware that this work may be reproduced and submitted to plagiarism detection software programs for the purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism checking). MARKS AND FEEDBACK

Your group assignment will be marked online. Once marking is completed, feedback and commentary on your group assignment will be available from your Turnitin link or the My Grades section of your vUWS site. Your group leader has the responsibility to download a copy of your marked group assignment with feedback (as a PDF document) and redistribute the marked assignment to all group members for their records. Please see videos from the link in Help and Further information listed below. HELP AND FURTHER INFORMATION

Information for students on how to submit an assignment into Turnitin, how to view and interpret their originality report, accessing assignment feedback via Turnitin/Grademark and FAQs for students is available here: http://library.uws.edu.au/uws_library/guides/turnitin/resources-for-students FORMAT

A submission of no less than 1350 words and no more than 1650 words is expected, excluding the reference list and appendix. Submissions must be word processed in either Times New Roman or Arial font, 12 point and 1.5 spaced with a footer on each page including your group leader’s name, student ID and page number. All working out for calculations should be in the Appendix of the assignment and must also be word processed. Handwritten calculations are not acceptable. LATE SUBMISSIONS

Late submissions will be penalised as per the WSU policy document ‘Assessment Policy – Criteria and Standards – Based Assessment’. In particular, please see Clause (51) which states as regards to ‘Late Submission of Assessments’: (51) Except where an extension has been approved for the submission of an assessment task by the unit coordinator, or in line with the University's Special Consideration Policy, the following penalties will apply to the late submission of an assessment task:

1. a student who submits an assessment task after the due date for submission will be penalised by 10% per calendar day up to 10 days, i.e. marks equal to 10% of the assignment's worth will be deducted as a 'flat rate' from the mark awarded for each calendar day the assignment is late up to 10 calendar days. Saturday and Sunday each count as one calendar day; and

2. the assessment will not be accepted after the marked assessment task has been returned to students who submitted the

assessment task by the due date.

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FREQUENTLY ASKED QUESTIONS

What is being asked for? Are we on the right track? Make sure you understand what is being asked for is the first step! A good answer to a question that has not been asked is actually a bad answer! Reading Chapters 2 and 7 of the prescribed textbook would be a good starting point! How many references do we need? The reference list should contain only those resources that have actually been referred to (or “cited”) in your answers. The quantity of references is not as important as the quality of your references, the relevance of your references, and how the references are used in your assignment. Can we ask people we know and use their views and include it in the assignment?

No. Use published sources only.

 Note: Wikipedia, Investopedia, and anonymous amateur blogs should not be used as references. For definitions and basic concepts, your first sources should be your textbook and the additional material provided. Will our tutor (or other staff) read our drafts before we submit? No. We will provide guidance but not actual reading (or proof-reading) of any work in advance. Who should I ask if I have more questions? You should ask the Unit coordinator or post your questions on the Group Assignment Discussion Board as there may be other students who have the same questions and there is a need for consistency in advice. The Group Assignment Discussion Board can be found on vUWS by clicking on the ‘Assessment 2 – Numerical problem solving’ link and also via the ‘Discussion’ link on the unit’s homepage. What if one or more of the group members didn’t contribute to the assignment? If you face problems with one of the group members, for example he or she didn’t show up to group meetings or they didn’t do the work assigned to them, in the first instance, try to communicate with your group members and give that person another chance. If the student still does not contribute to the group assignment, then report the matter as soon as possible to your tutor or unit coordinator. It is your responsibility to raise the matter with either your tutor or the unit coordinator as soon as possible so they may assist in helping your team resolve the issue. Your tutor or the unit coordinator will not be able to assist you if you do not raise the matter with them in a timely manner. If a group member still doesn’t contribute towards the completion of the assignment, then other group members should fill in and email the unit coordinator the “Student Evaluation of Group Members” form. The form can be found on vUWS by clicking on ‘Assessment 2 – Numerical problem solving’ folder. If you don’t submit this form, then it will be assumed that all group members contributed equally. NOTE: All team members must at all times keep a record of all the work/contributions that they have done/made over the course of completing the assignment. This can be in the form of hard copy work done, Word/Excel files, Google Docs history, correspondence between team members, etc. University assignment policy requires students to maintain a record of all their work and participation in assignments. Additionally, University policy states that a student will not receive any marks if he/she did not contribute towards the completion of an assessment task.

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How does the assignment contribute to my assessment mark? This assignment is worth 20% of your total marks in the unit. Can I or any of my group members solve or write this assignment in cooperation with other groups or members from other groups? No. Collusion between groups is strictly prohibited. WSU takes plagiarism and collusion seriously as these are the most common form of academic misconduct.

WHAT IS COLLUSION? Collusion is when two or more students, or a student and any other person(s), act together to cheat, plagiarise or engage in academic misconduct, or incite others to do so. At Western Sydney University plagiarism and collusion falls within the framework of the Student Misconduct Rule. Students should familiarise themselves with the Rule and with the associated guidelines.

GROUP ASSIGNMENT MARKING GUIDE

CRITERIA Fail Fail Fail Pass Pass Credit Distinction Distinction HIGH DISTINCTION

HIGH DISTINCTION

Locate, collect, evaluate and use relevant information appropriately.

Irrelevant information. No evidence of critical consideration.

Dumps information. No evidence of critical consideration.

Poor evidence of critical consideration of relevant information, but poorly integrated.

Some evidence of critical consideration of relevant information, but poorly integrated.

Good evidence of critical consideratio n of relevant information, but may require better integration.

Very good evidence of critical consideration of relevant information, and well integrated.

Critically chooses information and integrates well to support the points being made.

Critically chooses information and clearly integrates it to support the points being made.

3 marks 0 0.5 1 1.5 2 2.5 2.5 3

Describe the problem and the solution path using correct financial tools.

No selection of financial tools.

Extremely poor selection of financial tools.

Poor selection of financial tools.

Some appropriate selection of financial tools.

Acceptable selection of financial tools.

Appropriate selection of financial tools.

Good selection of financial tools.

Very Good selection of financial tools.

Excellent selection of financial tools.

Faultless selection of financial tools.

Addresses the requirements of questions 1 to 4

No structure and/or unconvincing analysis and conclusions.

Extremely poor structure and/or unconvincing analysis and conclusions.

Poorly structured and/or unconvincing analysis and conclusions.

Could be better structured and/or the analysis and conclusions reached are not persuasive.

Could be better structured and/or the analysis and conclusions reached can be more persuasive.

Acceptable structure. The analysis and conclusions reached are convincing.

Good structure. The analysis and conclusions reached are convincing.

Very Good structure. The analysis and conclusions reached are convincing.

Very Good structure. Analysis and conclusions are argued in a very persuasive manner.

Well structured. Analysis and conclusions are argued in a very persuasive manner.

10 marks 0 2 3 4 5 6.5 7.5 8 9 10

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Addresses the requirements of question 5- CLO3.1

No evidence of ability to identify logical connections and no use of evidence in creating well- formulated ideas and arguments.

Extremely poor ability to identify logical connections and very poor use of evidence in creating well- formulated ideas and arguments.

Poor ability in identifying logical connections and using evidence to create well- formulated ideas and arguments.

Some ability in identifying logical connections and using evidence to create well- formulated ideas and arguments.

Satisfactory ability to identify logical connections and use evidence to create well- formulated ideas and arguments.

Very good ability to identify logical connections and use evidence to create well- formulated ideas and arguments.

Excellent ability to identify logical connections and use evidence to create well- formulated ideas and arguments.

4 marks 0 1 1.5 2 2.5 3 4

Uses a professional level of English.

No in-text citation and paraphrasing and reference list missing or substantially incomplete.

In-text citation and/or paraphrasing and/or reference list missing or substantially incomplete.

In-text citation and/or paraphrasing and/or reference list have a number of errors.

Satisfactory in-text citation, paraphrasing and reference list, possibly with a few errors.

Good in-text citation, paraphrasing and reference list, possibly with a few minor errors.

Excellent in-text citation, paraphrasing and reference list.

1.5 marks 0 0.5 0.75 1 1.25 1.5

References and paraphrases correctly. (Note: use of the “Harvard Western Sydney referencing style” is required. See the University library website.)

Writing style is extremely poor and extremely difficult to follow and marred by many grammatical and/or spelling errors.

Writing style is poor and difficult to follow and/or marred by many grammatical and/or spelling errors.

Writing style is unclear at times. There are a number of grammatical and/or spelling errors.

Writing style is coherent, with possibly a few grammatical and/or spelling errors.

Writing style is coherent, with possibly a few grammatical and/or spelling errors.

Writing style is coherent, with no grammatical and/or spelling errors.

1.5 marks 0 0.5 0.75 1 1.25 1.5

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Not appropriate length/not within the word limit

Outside the word limit. i.e. more than 1650 words OR less than 1350 words

Length is within the set word limit. i.e. between 1350 – 1650 words

Minus 2 marks No penalty