Case Study Assignment

Overview:

The case study assignment is an assessment item worth a total of 30% of the final grade for this subject.Note; this assessment is NOT ahurdle assessment; however, students are required to attempt all assessments in order to pass the subject.

The case study provides students with the opportunity to:

  1. explore subject topics using a real-world example;
  2. develop skills required for financial analysis;
  3. work collaboratively on a piece of academic work; and
  4. learn from their peers regarding their own behavior in group work.

The questions in this case study workbook have been designed to introduce and prompt students to answer questions based on the concepts and principles learned the topic content throughout the study period.   The workbook consists of;

  • Part 1 –develop a background of the company and an overview of the company’s corporate governance principles.
  • Part 2 – familiarise students with the published annual reports and identify differences between results over a period of time.
  • Part 3 – conduct ratio analysis on the company annual report.
  • Part 4 –prepare a comparative analysis of the 4 companies assigned to the group, summarise the findings and present as a response to the investor.

In your first tutorial class, your tutor will assign you a company for the case study assignment.  You will work as an individual on the assignment completing all of questions for parts 1, 2 and 3 in the case study workbook.  Once census date has passed, your tutor will assign you to a group with a maximum of 4 students.  Each student in the group will be assigned a different company, this means that there will be 4 different companies within each group.  Students may choose members fortheir group, but each member must have been assigned a different company for analysis.

The purpose of the group work componentis to conduct a comparative analysis of all 4 companies using the information prepared as individuals

Before starting the written response you should read over the marking criteria sheet. The essay should be typed and APA referencing should be used (see http://libguides.jcu.edu.au/apa ).

The written submission will be awarded a mark out of 100, which will in turn be converted to a score out of 30.  This will be awarded collectively to each group member that has authored the group essay. 

Group Process

The ability to “lead, manage and contribute effectively to teams” is a key JCU Generic skill and an important skill sought by employers. An important function of this assessment is for students to work effectively and on a collaborative basis. To facilitate this process, each group will have its own dedicated BU1002/BU1902 Group site on LearnJCU.


 

Establishment of Group Site and Participation:

You will have access to your group site within the BU1002/BU1902 subject site on LearnJCUonce the groups have been formed after census date.

Each Group site on LearnJCU will incorporate links to the following facilities: group Information, file exchange, group discussion, group journal and send emails. All students are required to use their Group siteto document all group activity relating to this assessment.  It is also expected that once the group site has been formed, each member of the group will upload the answers for their company to the questions in Parts 1 and 2 of the case study workbook.This is a progressive assignment, therefore students will need to continue to prepare answers for their company to the questions in part 3 of the case study workbook to be able to complete the group analysis.  The academic staff on your campus will provide you with memo stating the due dates when these answers must be uploaded to the group site.

Time will be allocated in tutorial classes for group work on the assignment to facilitate and encourage group collaboration.  These tutorial classes will be compulsory for all group members to attend.  The compulsory classes will be listed in the Subject Outline.  Please use the group site on LearnJCU to provide supporting documentation e.g. meeting agendas and minutes and use the other facilities to communicate with group members regarding the response in part 4.

Working in Groups

  • Assessment Criteria and Skills Development: Assessment will be based on the criteria set out in the Subject Outline and or LearnJCU.
  • It should also be noted that the Group site will provide the lecturer with information on the extent of each student’s contribution and how early, late and consistently they engaged with the site. This information may in some instances, where there seems to be an imbalance in contribution levels across a group and / or a formal complaint has been lodged, be used as a basis upon which to rescale the marks awarded to individuals within the group.
  • Team Conflict and Disbandment: Should you have conflict in your group or a group member withdraws from your group or the subject, it is important to advise the lecturer as soon as possible and well ahead of the due date. Failure to upload content by the stipulated timeframes without reason may also be grounds for removal from the group. The lecturer will retain the right (after hearing claims from students andreviewing the Group site) to decide when a group should be disbanded. In exceptional circumstances, individual assessment options are available to students only after a concerted effort has been made to work with other team members. Where a student has been removed from a group, the remaining members will prepare a comparative analysis on the remaining companies.  Students who will be asked to complete the assignment as an individual will be required to complete a comparative assessment of their assigned company with another company provided by the lecturer.  The second company will be provided when the student has been removed from the group.


 

  • Working in groups, under proper conditions, encourages peer learning and peer support. Individual students who do not collaborate within the specified timeframes may be removed from the group and will be required to complete the assignment as an individual. The comparative analysis will be based on the collaboration of remaining group members.
  • Where a student has been removed from a group and will submit as an individual, the maximum weighting for the assignment will be adjusted to 20% for failure to complete in a group.
  • Sometimes individual members of a group will not contribute equally to the task resulting in some students carrying higher workload in the group. This subject uses a peer evaluation sheet to alleviate student concerns about the contribution of individual group members. The lecturer reserves the right to reject peer and self-evaluations that are deemed inconsistent with the information obtained from the Group site.

Students who do not contribute to the group essay will receive zero marks for this piece of assessment.

 

Resources:

Students will be provided with the following information:

  • Case Study Workbook.
  • Company Annual Reports for the past 3 years.
  • Company financial data (excel spreadsheet) – to conduct ratio analysis.
  • Link to the Company website on LearnJCU.

Students are not expected to research beyond these references for this assessment item.

The case study contains questions related to weekly studytopics for weeks 1 – 6 inclusive.

 

 

Part 1 – Introduction to Company Annual Report and Financial Statements

The purpose of part 1 is to begin your exploration of your company’s annual report and corporate governance structure.

Part 1 – Question 1:

Write a background summary of your assigned company including the following:

  • When and why did your company first commence operation?
  • What is the main or core business of the company?
  • Some companies are diversified and have investments in other industries, for example, Wesfarmers has diverse business operations that cover supermarkets, department stores, home improvement and office supplies; coal production and export; chemicals, energy and fertilisers; and industrial and safety products. Is your assigned company diversified?  What industries does the company operate in?
  • Does your assigned company operate solely within Australia or does it operate internationally? Identify the operational locations.

Part 1 – Question 2:                                                                                                             (related content – topic 1)

What are the headings and sub-headings of the discussion on corporate governance?  Note, if not presented in the Company Annual Report, review the Company website.

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Part 1 – Question 3:                                                                                                             (related content – topic 1)

What are the page references for the discussion on corporate governance?  (Hint – try the table of contents at the beginning of the annual report or review the Company website.) Briefly list the information included in the company’s corporate governance report.  Does this information differ from the corporate governance information covered in the content and required reading for topic 1?

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Part 1 – Question 4:                                                                                                             (related content – topic 1)

What position was held and what was the composition and total remuneration of the highest paid board member?  (Hint – try the Directors’ Report.)

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Part 1 – Question 5:                                                                                                             (related content – topic 1)

How many “subsidiary companies” or “controlled entities” are in the group?  (Hint; try looking towards the end of the financial statements, near the end of the report).  Are the subsidiaries/controlled entities located domestically and or internationally?  Identify where they are located.  This will give you insight into how widespread the company’s operations are and may assist you with your background information.

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Part 2 – Financial Statements

The purpose of part 2 is to not only introduce students to an actual set of financial statements of a publicly listed company, but to also identify information that may be significant for ratio analysis which will be conducted in Part 3.  The financial statements are presented in the financial report section of the company’s annual report.  For this section you may find it easier to refer to the excel spreadsheets to obtain the financial data.  The excel spreadsheet will contain the financial information for the past 10years; however, you will only need to refer the data for the past four years in your spreadsheet, (the past three years and the fourth may be required to create averages for some of the ratios in part 3).  This will make it easier to refer to the financial data for several years in one excel worksheet.

Part 2 – Question 1 (Balance Sheet):                                                                           (related content – topic 3)

What is the amount invested by the company in net assets for the current year?  (Hint use total assets less total liabilities).  How does this amount differ from the value of net assets for each of the previous three years?  Can you identify any reason for the changes?  (Hint: look at the individual amounts that make up both the total assets and total liabilities, are there any changes to individual items over this three-year period?  Alternatively, you could perhaps look at the notes to the financial statements in the annual report to see if there are any changes in the breakdown of individual items in the reports.)  Discuss.

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Part 2 – Question 2 (Balance Sheet):                                                                           (related content – topic 3)

How much was the total equity for the current year?  How does this differ from the total equity in each of the previous three years?  Can you identify any reason if there are any changes?  Discuss.

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Part 2 – Question 3 (Balance Sheet):                                                                           (related content – topic 3)

How much was the total current assets for the current year and what are the components classified under this heading?    Is there any difference in the value of total current assets for each of the previous three years?  Can you identify any reason if there are any changes?   Discuss.  (Hint: you may need to refer to the notes to the financial statements in the annual report to review more detailed information.)

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Part 2 – Question 4 (Balance Sheet):                                                                           (related content – topic 3)

What are the items listed under non-current liabilities? Are there any new non-current liabilities in the current year that were not there in the previous three years? (Hint: you will need to look in the notes to the accounts to see the breakdown of non-current liabilities).

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Part 2 – Question 5 (Income Statement):                                                                  (related content – topic 4)

How much was net profit for the current year?  How does this compare to the net profit for each of the previous three years?  Can you identify any particular revenues or expenses that may have led to changes in the profit figures over the three-year period?  Discuss.

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Part 2– Question 6 (Income Statement)                                                                    (related content – topic 4)

Is the total revenue in the current year greater or less than the total annual revenue recorded in each of the previous three years?  Discuss.

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Part 2 – Question 7 (Statement of Cash Flows):                                                      (related content – topic 4)

How much was the cash flows from operating activities for the current year?  What was the largest inflow item and the largest outflow item in the operating activities section?  Does this differ from the previous three years?  Discuss.

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Part 2 – Question 8 (Statement of Cash Flows):                                                      (related content – topic 4)

How much was the cash flow from investing activities in the current year?   Has the company had any new investing cash flows in the current year compared to the previous three years? If they did, list the activities (Hint: it may be necessary to look in the notes to the accounts).

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Part 2 – Question 9 (Statement of Cash Flows):                                                      (related content – topic 4)

What was the net change in cash flows in the current year?  How does this change compare to the previous three years?   Discuss.

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Part 3 – Financial Statement Analysis Tools

The purpose of part 3 is to introduce students to using financial statement analysis tools.  Hopefully your answers to questions in part 2 may have flagged monetary differences that you can now compare based on percentages using ratio analysis.  Ensure you include your calculations in your answer and more importantly, try and identify why percentage changes may have occurred.  It is this analysis that is most important in this exercise, trying to identify “why” changes have occurred. The group should aim to incorporate the answers and calculations each member has prepared for their assigned company as supporting documentation for the group analysis in the appendix of the final submission.  The more analysis provided in the answers to these questions, the more information the group will have to draw on when conducting the comparative analysis for the written response for part 4.

 

Part 3 – Question 1 (Profitability):                                                                                (related content – topic 5)

Has the profit margin changed over the past three years?  Is this a good result for the company?  Briefly discuss what the change indicates.  (Hint:as mentioned above, refer to your horizontal and vertical analysis of the Income Statement and Balance Sheet to assist in your analysis of this ratio.)

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Part 3 – Question 2 (Profitability):                                                                                 (related content – topic 5)

Can you identify a trend in the return on equity ratio over the past three years?  Comment on the trend.  Briefly discuss possible reasons for this trend.

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Part 3 – Question 3 (Asset efficiency):                                                                        (related content – topic 5)

Identify if the asset turnover ratio increased or decreased over the past three years? Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 4 (Asset efficiency):                                                                        (related content – topic 5)

Has the receivables turnover changed over the past threeyears?Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 5 (Asset efficiency):                                                                        (related content – topic 5)

Has the inventory turnover changed over the past threeyears?Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 6 (Liquidity):                                                                                       (related content – topic 5)

Has the current ratio increased or decreased over the past three years?  Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 7 (Liquidity):                                                                                       (related content – topic 5)

Has the quick ratio increased or decreased over the past three years?  Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 8 (Liquidity):                                                                                       (related content – topic 5)

Has the cash flow (to current liabilities) ratio increased or decreased over the past three years?  Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 9 (Capital structure/Gearing):                                                     (related content – topic 5)

Has the debt to assets ratio increased or decreased over the past three years?  Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 10 (Capital structure/Gearing):                                                  (related content – topic 5)

Has the debt to equity ratio increased or decreased over the past three years?  Is this a good result for the company?  Briefly discuss what the change indicates.

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Part 3 – Question 11 (Horizontal Analysis):                                                                (related content – topic 6)

Conduct a horizontal analysis of the Income Statement for the past 4 years.  Comment on any trends.

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Part 3 – Question 12 (Horizontal Analysis):                                                                (related content – topic 6)

Conduct a horizontal analysis of the Balance Sheet for the past 4 years.  Comment on any trends.

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Part 3 – Question 13 (Vertical Analysis):                                                                     (related content – topic 6)

Conduct a vertical analysis of the Income Statement for the past 4 years.  Comment on any trends.

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Part 3 – Question 14 (Vertical Analysis):                                                                     (related content – topic 6)

Conduct a vertical analysis of the Balance Sheet for the past 4 years.  Comment on any trends.

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Note: Horizontal and vertical analysis can be used as a point of reference to assist in identifying percentage changes of individual items that appear in the financial statements.  When conducting ratio analysis, over a period of time, you may find it easier to not only identify the change in the numerator and denominator of the formula, but to also use horizontal and vertical analysis to identify the individual components that make up the numerator and denominator of the formula.

Part 3 – Question 15 (Trend Analysis):                                                                        (related content – topic 6)

Conduct a trend analysis of Revenue and Net Profit after Tax and Abnormals in the Profit and Loss Statement for the past 3 years.  Comment on any trends.

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Part 4 – Group Response Instructions

Written response to the following statement:

An investor is contemplating a potential investment opportunity in one of four companies. The investor has asked your groupto provide a four-page comparative summary on the profitability, liquidity, asset efficiency and gearing of the four nominated companies and recommend the company that provides the best investment opportunity.

Submission Requirements:

The four-page response will consist of:

  1. Introduction: purpose of the response and brief background of the 4 companies being analysed (concise and focused).
  2. Body: This section will provide a brief comparative analysis of the profitability, liquidity, asset efficiency and gearing of the four companies. Due to the length of the response, summarise and respond on the overall evaluation of the profitability, liquidity, asset efficiency and gearing of the company and not the individual ratio outcomes. It will be easier to reflect on contribution prepared by each member for their company when preparing the comparative analysis. Identify which company is the strongest in each ratio category.
  3. Limitations of analysis:the group should identify any limitations in conducting the comparative analysis.
  4. Conclusion: Draw together for the reader the main findings and what these findings mean in relation to the analysis discussed in the body of the response. The recommendation stated in the next section will logically flow from these conclusions. The conclusions should be firmly and briefly stated. Do not introduce new information.
  5. Recommendation: Based on the ratio analysis and findings discussed in the body of the response, recommend the company that the investor should invest in.
  6. Reference list: appropriately reference the resources provided. Note: the written submission should be appropriately referenced using APA style.
  7. Appendices: Your appendices should include the following:
  • Ratio results, calculations and supporting analysis or comments.
  • Horizontal and vertical analysis of the income statement and balance sheet for each company.
  • Any other information your group believes is relevant and a brief explanation as to why it is relevant.

The reference list and appendices do not form part of the written response, there is no page restriction on the length of appendices.

Students should refer to the marking rubric within the Subject Outline as it is relevant to the submission requirements of this piece of assessment.

 

 

Submission Requirements for:

  • The submission requirement for part 4 is 2 pages double sided or maximum of 4 pages, with minimum 1.5 spacing, minimum size 11 font and minimum margins of 1.5cm. It will be completed in a group, or as an individual where a student has been removed from a group.
  • The written response must be submitted electronically to a Safe Assignment drop box on the LearnJCU subject site. Students may not email or fax an assignment without prior approval from the Subject Coordinator/Lecturer.
  • One student from the group is to be nominated for the submission of the assignment on behalf of the group.
  • The written response should contain a cover sheet listing the company name and the names of the individual group members.
  • A draft safe assignment box will be provided to enable students to check for plagiarism.
  • Assignments received after the submission deadline will be deemed to be “late” and will receive a 5% late submission penalty for each day the assignment has passed the submission deadline.P(5.u)

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