THE FINANCIAL RATIO ANALYSIS ASSIGNMENT

Ratios analysis is as much an art as it is a science, therefore students must use common sense and sound judgment throughout the analysis. The purpose of this case study is to provide students with the opportunity to retrieve real time financial data via the Web, and analyze the financial performance of selected companies. Students will download the financial data from Qatar stock exchange website and perform ratio analysis for two companies from the same sector selected from the table below.
Company sector
4 Nakilat transportation
5 Qatar Navigation
Students are instructed to follow the path shown below to retrieve the financial profile for the selected company via DSM.
• Go to Qatar stock exchange website:www.qe.com.qa
• From the menu, click on listed securities then Financial Statements
• Choose the year 2018& 2019and hit submit, and then download the annualfinancial reportof the two firms in the same sector.
perform the Ratio Analysis PLUS Graph based upon the following financial ratios:
• Liquidity Ratios: to measure the company’s ability to pay its bills;
Current Ratio
Quick Ratio
• Activity Ratios: to measure the company’s ability to utilize its assets;
Inventory Turnover ratio
Average age of inventory
Accounts receivables Turnover
Average collection period
Total Asset turnover
• Leverage Ratios: to measure the extent to which the company’s assets are financed with debt;
Debt ratio
Times interest earned ratio
• Profitability Ratios: to measure the company’s ability to generate earnings;
GROS profit margin
Operating profit margin
Net profit margin
Return on total assets
Return on common equity
• Market Value Ratios: to measure the market perception about the company’s future prospects.
P/BV
P/E
EPS
Book Value/Per Share
After calculating the financial ratios on excel sheet, each group will compare the two companies then write a report on word file highlighting the strength and weakness points for each company.
The recommended layout of your project is suggested to be as follows:
Cover page
Table of contents
Introduction Firm overview
Description of the company
Ratios analysis
Valuation & recommendation
Conclusion (summary of your results)
General Guidelines
1- Reserve the first page (cover page) to group member names, student ID, course name, anduniversity. All group member names should be on the cover page to earn marks.
2- You should write in times new roman font, size 12, with 1.5 spaces.
4- Failure to submit the group members list by the deadline is subject to mark deductions.
5- Failure to submit the soft copy online or the hard copy in class by the due date is subject to mark deductions.
6- Maximum similarity index allowed is 15%.
GOOD LUCK!
Q31
Main Objective of the assessment The main objective of this assignment is to examine the ability of the students to critically evaluate the financial performance and position of a company and their ability to value the company using a valuation method. This objective will be achieved through the preparation of financial and valuation report of a large listed company in the London Stock Exchange. In the preparation of the report student must demonstrate a critical understanding of the theories and concepts pertaining to the creation of shareholder value and the evaluation of the performance of a company. In this assignment students should use appropriate concepts and rational arguments to interpret strategic and financial data in order to produce suitably critical, well-considered report. Description of the Assessment This assignment is based on companies listed on the London Stock Exchange (LSE). You are required to prepare a report comparing the financial performance and position of two companies over the last five years and also required to prepare a valuation report using one valuation method. Please select two companies from the list of FTSE 350 companies from the following sectors: (a) Construction (b) Information and Communication (c) Mining and Quarrying
Q32
1000-1500 words + references
Part I
Both of your presentations were outstanding and displayed your level of financial knowledge and expertise in the area of financial statement analysis. You have been asked to be a guest lecturer in a course at your alma mater college, CTU. As a result, you will have an opportunity to explain to students how they should tackle financial statement analysis. Prepare a presentation that will include the steps you went through to thoroughly analyze the financial statements so that you could make the recommendation—keeping in mind that you want to simplify the process as much as possible. You do not need to include how to do the financial calculations, but rather how you determined the recommendation based on the information you were given. Provide a list of potential “consultants” and resources they could reference to help them get through the assignments you have just completed.
Part II
Leaders and financial teams in organizations have an obligation to provide financial reports to meet the requirements and guidelines provided by a number of regulating bodies. In addition, they must uphold a high level of professional ethical standards when preparing reports that reflect the health of the organization to its stakeholders.
Include in your PowerPoint Presentation:
• At least 2 ethical issues that managers and financial teams face when preparing financial reports.
• What regulations should be considered when making a decision about each issue?
• Provide an ethical solution for each issue that you introduced.

Q33
Part I
Both of your presentations were outstanding and displayed your level of financial knowledge and expertise in the area of financial statement analysis. You have been asked to be a guest lecturer in a course at your alma mater college, CTU. As a result, you will have an opportunity to explain to students how they should tackle financial statement analysis. Prepare a presentation that will include the steps you went through to thoroughly analyze the financial statements so that you could make the recommendation—keeping in mind that you want to simplify the process as much as possible. You do not need to include how to do the financial calculations, but rather how you determined the recommendation based on the information you were given. Provide a list of potential “consultants” and resources they could reference to help them get through the assignments you have just completed.
Part II
Leaders and financial teams in organizations have an obligation to provide financial reports to meet the requirements and guidelines provided by a number of regulating bodies. In addition, they must uphold a high level of professional ethical standards when preparing reports that reflect the health of the organization to its stakeholders.
Include in your PowerPoint Presentation:
• At least 2 ethical issues that managers and financial teams face when preparing financial reports.
• What regulations should be considered when making a decision about each issue?
• Provide an ethical solution for each issue that you introduced.
Submit 15-17 PowerPoint slides with 1,000–1,500 words of speaker’s notes.

Q34
700 words and reference page
Congratulations! Tony has promoted you! Now, he is going to take your analysis and information into account. He wants your input and information. Discuss the following:
• Given all of the financial analysis that you have completed, in what direction would you recommend Tony Fortune take the company?
• Be sure to justify your answers using both qualitative and quantitative analysis (with the help of financial figures from your financial statements).
**Tony Fortune, a tenured and well-respected turnaround guru, pondered his latest employment offer as he was driving home from an eventful meeting with a number of key electronic equipment executives. He had been asked to assume the presidency at a poorly performing company, Electronic Equipment Venture (EEV), which is owned by Electronic Equipment USA. Certainly he could refuse, but Tony flourished on reinventing and remolding underperforming companies. During the last 10 years, he was instrumental in overseeing three successful business turnarounds, four consolidations of business units, and five successful divestitures. This latest endeavor, based on his understanding, would be a challenge because the board of directors was seeking concrete data that would allow a quick resolution to the company’s problems.
Electronic Equipment Venture is a producer of electronic equipment dating back to the 1970s. During the company’s first 30 years, it was a pioneer in the development, design, and manufacturing of electronic equipment. The competitive environment changed tremendously in the late 1990s, however, and EEV’s market share eroded from 75% to 25% as other firms recognized this untapped market. Reacting to the loss in market share and unacceptable deterioration in profitability, management attempted to revitalize the company by increasing the level of research and development as well as acquiring two smaller but more sophisticated firms.
With the added research and development, along with the additional resources, profitability continued to worsen. Faced with slow stock growth at Electronic Equipment USA, primarily because of EEV, the board of directors has been pressed to make a decision regarding EEV. Recognizing that factual data is crucial to the decision process, the board proceeded with authorizing management to employ the appropriate resources needed to conduct the evaluation and valuation of EEV.
Accepting this challenge and knowing he has only 5 weeks to complete the analysis, Tony spent several days developing a strategy for generating a proper and thorough valuation and evaluation of the firm’s financial position.
Q34
Write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
The public, the Security and Exchange Commission (SEC), and other observers have recently voiced great concern about ethical financial reporting in U.S. corporations. Consequently, many companies, as well as the U.S. Congress, have instituted measures to limit the proliferation of unethical financial reporting.
Because you were the finance team leader, a key element in your evaluation was validating and ensuring that all the material reviewed was ethically sound. Prepare an ethical assurance position paper for the board of directors in which you demonstrate an awareness of what constitutes unethical financial reporting and the impact of such activity.
SCENARIO (just for background info)Tony Fortune, a tenured and well-respected turnaround guru, pondered his latest employment offer as he was driving home from an eventful meeting with a number of key electronic equipment executives. He had been asked to assume the presidency at a poorly performing company, Electronic Equipment Venture (EEV), which is owned by Electronic Equipment USA. Certainly he could refuse, but Tony flourished on reinventing and remolding underperforming companies. During the last 10 years, he was instrumental in overseeing three successful business turnarounds, four consolidations of business units, and five successful divestitures. This latest endeavor, based on his understanding, would be a challenge because the board of directors was seeking concrete data that would allow a quick resolution to the company’s problems.
Electronic Equipment Venture is a producer of electronic equipment dating back to the 1970s. During the company’s first 30 years, it was a pioneer in the development, design, and manufacturing of electronic equipment. The competitive environment changed tremendously in the late 1990s, however, and EEV’s market share eroded from 75% to 25% as other firms recognized this untapped market. Reacting to the loss in market share and unacceptable deterioration in profitability, management attempted to revitalize the company by increasing the level of research and development as well as acquiring two smaller but more sophisticated firms.
With the added research and development, along with the additional resources, profitability continued to worsen. Faced with slow stock growth at Electronic Equipment USA, primarily because of EEV, the board of directors has been pressed to make a decision regarding EEV. Recognizing that factual data is crucial to the decision process, the board proceeded with authorizing management to employ the appropriate resources needed to conduct the evaluation and valuation of EEV.
Accepting this challenge and knowing he has only 5 weeks to complete the analysis, Tony spent several days developing a strategy for generating a proper and thorough valuation and evaluation of the firm’s financial position.
Q35
1200-1500 words plus excel spreadsheet
The financial team has been properly selected and charged to proceed with their analysis of EEV’s financial statements. In the course of their evaluation, they will be assessing the firm’s operating performance, benchmarking their competitors, and looking at the industry using financial ratios as their source of measurement. However, the chief executive officer (CEO) of Electronic Equipment USA agrees with numerous practitioners who promote the use of nonfinancial measures as well as financial measurements to evaluate the performance of a given firm. Nevertheless, Tony agrees that nonfinancial measurements can be valuable, and he tends to support the premise that when evaluating operating performance, benchmarking competitors, and comparing industry results, nonfinancial measurements have little measurable value.
The CEO of the parent company agrees with numerous practitioners who promote the use of nonfinancial measures as well as financial measurements to evaluate the performance of a given firm. Nevertheless, Tony agrees that nonfinancial measurements can be valuable, and he tends to support the premise that when evaluating operating performance, benchmarking competitors, and comparing industry results, nonfinancial measurements have little measurable value.
Tony has asked you to present a position paper comparing the effectiveness and reliability of using financial measures as opposed to nonfinancial measures. Include the following:
• Provide an analysis of the utilization of assets in terms of efficiency (or inefficiency).
• What are measurements associated with returns and activity ratios?
• Explain why you selected each specific measurement.
• Then, review the electronic equipment industry using financial ratios.
• Assess the firm’s operating performance against these ratios.
• Research the financial reports of 1 company in the electronic equipment industry, and compare it with the performance of Electronic Equipment Venture.
• Include an Excel spreadsheet to support your analysis.
• Use this information to support your position, and compare the effectiveness and reliability of using financial measures as opposed to nonfinancial measures.

Q36
10-15 slides, as well as intro slide and reference slide. 300-400 speaker notes per slide
In its 30-year history, Electronic Equipment Venture (EEV) has seen a number of ups and downs, but the performance has been declining steadily in the past decade. Tony has taken the analyses of the income and balance sheet you provided and spent several days digesting the massive amount of information. This includes the analysis of the company’s financial position, operating results, resource flows, and industry comparison.
Now Tony would like you to condense the information and create a presentation. Tony has asked you to create a strengths, weaknesses, opportunities, and threats (SWOT) analysis and a risk analysis for the company. Using all of the financial statements and the SWOT analysis, provide a recommendation for the direction of the company in both the short term and long term. Be sure to be specific on which financial ratios and figures within the financial statements you are utilizing.
Click here to view the Electronic Equipment Venture balance sheet.
Click here to view the Electronic Equipment Venture income statement.
Assignment Details
In the presentation, include the following:
1. The ratios used to do the analysis of EEV’s financial performance
2. Based on your analysis, what you did to improve the performance of EEV
3. Provide 3-4 recommendations Tony should make to the board for improving performance
The total presentation should include the following:
• An introduction
• Statement of situation status
• Summary of findings
• 3-4 recommendations

Q38
UNIVERSITY NET ZERO SOLAR POWER INSTALLATION PROJECT
In August 2019, La Trobe University announced an ambitious strategy to be the first major university in Victoria to become carbon neutral through a number of investments and initiatives
representing part of an overall Net Zero Project. A major component of this wider strategic
initiative is the proposed installation of a network of 7,000 solar panels on the rooftops of 27
buildings at the Melbourne (Bundoora) campus to provide a renewable source of electricity
generation for meeting part of the operating requirements of the campus. Solar panels operate
by absorbing sunlight through photovoltaic cells and generating direct current (DC) energy and
then converting this into usable alternating current (AC) energy using inverter technology. This
planned solar panel system installation will be supported by the connection of inverter and
transmission network infrastructure to convert the DC electricity generated by the solar panels
to AC electricity for distribution across the campus as required for operational purposes, as
well as a solar battery storage system to allow for the consumption of solar-generated electrical
power during periods of no solar energy generation (such as at night). The proposed solar power
generation system will not generate sufficient electricity to fully offset the university campus’
electricity usage requirements, however, savings will be achieved in terms of a proportion of
the university’s energy requirements not having to be purchased under commercial provision
terms from retail providers predominantly via the national electricity grid. The construction
and operation timetable for the solar panel generation system at the Melbourne campus of the
university is outlined in Table 1 below:
Table 1: Project Construction and Operation Summary
Date Project Activity
August 1st2019 Installation of the solar panel arrays and transmission network
infrastructure commences
September 1st2019 Initial generation and usage of solar panel electricity commences
(30% of full system electricity generation capacity is anticipated to be
realised in the 2019 calendar year)
December 31st2020 Full installation of the solar panel arrays and transmission and storage
network infrastructure is completed (70% of the full system electricity
generation capacity is anticipated to be realised in the 2020 calendar
year)
From January 1st
2021 onward
Full capacity operation of the solar panel arrays and transmission and
storage network infrastructure
December 31st2060 The indicated 40-year useful full-operating life of the solar panel and
transmission and storage network infrastructure is reached. The
proposed project ends and ongoing feasibility will be assessed relative
to technology advancements and financing capability.
The following specifications, parameter estimates and forecasts for the solar power electricity
generation project have been developed as part of project planning:
2
? The solar panel array network will involve the installation of 7,000 individual solar panels
each with maximum electricity generating capacity of 400 watts (0.40 of a kilowatt hour
(kWh)) per hour
? The solar panels will cost $500 per panel to purchase (in real terms)
? Weather analysis and modelling of historical sunrise and sunset data suggests that there
will be an average of 11 hours of sunshine during the Summer season, 8 hours of sunshine
during the Winter Season, and 9 hours of sunshine during both the Autumn and Spring
seasons.
? The Summer, Autumn and Spring seasons will have 91 days, on average, and the Winter
season will have an average of 92 days.
? There is expected to be an average daily 10% loss of solar power generating capacity due
to cloudy conditions, rain and bad weather.
? Even with the planned ongoing solar panel and inverter and transmission network
maintenance schedule, the solar panels are expected to decline in generating efficiency by
0.5% per year after the first year of solar energy generation in 2019.
? Annual operating and maintenance expenditure supporting the operation of the project is
estimated to be $650,000 (in real terms) during years of full project operation, with prorata
adjustment in 2019 and 2020 based on projected capacity usage. This expenditure is
primarily associated with salary costs for staff from the Sustainability Division of the
Infrastructure and Operations (I&O) Unit of the university who will be responsible for
managing the project, proportional salary costs for staff from the Department of Accounting
and Data Analytics in the La Trobe Business School responsible for monitoring and
analysing the electricity generation and usage information associated with the project, and
staff and supply costs associated with the maintenance program established for the project.
? The university can claim straight-line depreciation deductions against the usage of the solar
panel, inverter and transmission and storage infrastructure across the 40-year estimated
full-operation useful life period (from 2021-2060) based on the installed cost of the project.
? The university is required to pay taxation expense (in terms of an efficiency dividend) to
the Federal Government of 20% on profits from its individual projects and overall
operations.
? If the solar energy generation project is discontinued at the end of the 40-year useful life in
2060, there will be a $500,000 cost incurred in 2061 for dismantling the solar panel arrays
and inverter and transmission network infrastructure, which are assumed to have no re-sale
value at this time.
? Based on La Trobe University’s AA credit rating, they have a 4.50% per annum (in real
terms) required return on investment projects and funding allocations.
? The inflation rate is estimated to average 2.00% per annum in the future, within the Reserve
Bank of Australia’s targeted range of 1.50-2.50%.
? Preliminary electricity usage analysis by Data Analytics academic staff indicated that the
Melbourne campus uses an average of 100,000 kWh of electricity per day.
? The university has a long-term wholesale electricity supply agreement with AGL Energy
Limited providing it access to electricity from the national grid at a fixed rate of $0.25 per
kWh (in real terms), with no daily supply charges payable.
? AGL Energy Limited has also offered the university a $0.18 per kWh (in real terms) feedin
tariff for any excess electricity generated by the university’s solar energy network system that is returned to the national electricity grid for alternative usage.
3
? All monetary figures are expressed in December 31, 2018 real dollars.
? All information is as at December 31, 2018 and assume that the project evaluation is being
undertaken as at this date, which is when initial consideration of the project commenced.
? For terminology purposes, 1,000 watts represent 1 Kilowatt (kWh) hour
Estimated equipment and installation cost components for the solar panel energy generation
project at the Melbourne campus are as follows:
Table 2: Forecast Project Capital Investment Costs
Cost Component Amount (in real terms)
Solar Panels $3,500,000
Panel Mounting, Inverter and Transmission
Network Equipment
$6,000,000
Tesla PowerPack Lithium Ion Battery Bank $1,500,000
Contracted Installation Cost $1,250,000
Note that 30% of the project capital expenditure and installation costs are expected to be
incurred by the end of 2019 with the remaining 70% incurred at the completion of the
construction phase at the end of 2020.
The Academic Council of La Trobe University has requested the Finance and Procurement
Division, under the direction of Mr. Mark Smith (the Chief Financial and Operations Officer
of La Trobe University), to prepare a feasibility assessment of the proposed solar energy
generation project.
Required:
This case study requires the completion of the following tasks as part of an integrated
report to be submitted to the Academic Council of La Trobe University:
? The development of a spreadsheet model representing the cash flows associated with
the solar energy generation project, and the assessment of the project using a range
of capital budgeting evaluating techniques.
? The completion and provision of a quantitative risk assessment of the project based
on conducting appropriate sensitivity and/or scenario analyses of the project
valuation focusing on key parameters impacting on the project’s operation, feasibility
and cash flows.
? Based on the project modelling and associated risk assessment processes conducted,
provision of a justified recommendation as to the feasibility of the project.
? The preparation of a concise business case proposal summarising the potential
contribution of the project to the financial and strategic objectives of La Trobe
University.
4
The due date for submission of this Case Study task is no later than Monday 23rdMarch,
2020 at 5.00pm. This Case Study will represent 25% of the final assessment for this
subject and is to be submitted using the upload facility provided on the subject LMS site.
This Case Study is an individual assessment task, and should be a maximum of 1,000-
1,500 words, excluding any calculations, tables, spreadsheets or other exhibits. The Case
Study report should be prepared in a professional manner and include relevant, accurate
and logical information to justify any decision-making and conclusions drawn or
recommendations provided. The Case Study report submission should be accompanied
by the provision of a spreadsheet model developed for the solar power generation project.

Q39
All Frute Company bottles and distributes Frute Ade, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2014, management estimates the following revenues and costs. Sales $2,500,000 Selling expenses—variable $ 80,000 Direct materials 360,000 Selling expenses—? xed 250,000 Direct labor 450,000 Administrative expenses— Manufacturing overhead— variable 40,000 variable 270,000 Administrative expenses— Manufacturing overhead— ? xed 150,000 ? xed 380,000 Instructions (a) Prepare a CVP income statement for 2014 based on management’s estimates. (Show column for total amounts only.) (b) Compute the break-even point in (1) units and (2) dollars. (c) Compute the contribution margin ratio and the margin of safety ratio. (d) Determine the sales dollars required to earn net income of $624,000.

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