1. Understand how to use accounting information for decision making.
2. Critically analyse the impact of company information on share price in the Australasian context.
3. Understand the sharemarket activities and financial analysis.
4. Gain practical experience in share-market activities, making decisions and monitoring the sharemarket.
5. Demonstrate knowledge of sharemarket activities and evaluate the impact of the share price on the total value of a share portfolio.
PART 1 SHAREMARKET
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 shares for group of 2 students or $15,000 worth of shares for group of 3 students based on the closing share prices posted on the ASX website on Monday 10 December 2018. Check after 6pm to ensure that the latest price has been updated.
During the tracking period, Monday 10 December 2018 to Friday 18 January 2019, your team is to monitor the performance of the shares and the overall performance of the Australian share-market. Can you maximize the value of your share portfolio?
PART 2 COMPANY RESEARCH / GRAPHS / INVESTOR INFORMATION
[A] A brief description of each company in your team's portfolio. It should be presented as a comparative table and should include:-
- Products And Services Provided By The Company [brief outline]
- Name Of Chief Executive Officer [or Managing Director]
- Salary of Chief Executive Officer [or Managing Director]
- Profit / Loss after Tax from 2018 Annual Report for the full financial year - consolidated figures
- Latest Dividend Paid - Dividend Per Share and Date Paid
- Size Of The Business By Total Assets - from 2018 Annual Report - consolidated figures
- Number Of Employees
- Share Price - 52 week High And Low at the end of trading on Monday 10 December 2018
[100 word maximum for each company]
[B] For the tracking period only, using an Excel spreadsheet, prepare your own graph of the daily share price movements for each of your shares. Information should be shown in a table with separate columns for Date and Closing Price ($).
For the tracking period only, using an Excel spreadsheet prepare your own graph of the daily movement of the All Ordinaries Index. Information should be shown in a table with separate columns for Date 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 All Ordinaries 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 pp.23 to 26 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.
[250 word maximum for each company and comparison with the All Ordinaries Index]
[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].
[50 words maximum for each company]
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 2018 Annual Report with results for the full financial year for 1 July 2017 to 30 June 2018
The "consolidated" figures are required.
[B] RATIO ANALYSIS
From the Key Financial Data, calculate relevant ratios provide an overview of each company's:-
*Profitability *Stability *Liquidity
At 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:
1. Identify the name of the ratio used and interpret your results.
2. Provide an explanation of why these ratios may differ between your companies.
3. Which do you consider to be the better investment? Explain your reasoning.