Assignment Remit

 

Assignment Remit

 

Programme Title MSc Financial Management
Module Title Security Analysis and Valuation
Module Code 0715979
Assignment Title Group assignment
Level Master
Hand Out Date 05/05/2021
Due Date & Time 05/05/2021 12noon (GMT) UK Time
Feedback Post Date 03/06/2021
Assignment Format Report
Assignment Length 3000 words
Submission Format   Online Team

 

Assignment:

Students are expected to form a group with 6 members.  Then, they need choose a sample firm, which much be different from those of other groups.  After that, they are required to complete three questions due to questions A – to analyze the financial position and performance of the chosen sample firm in the past four years (i.e. 2016 to 2019). [40%] B – to predict the financial performance and position of the sample firm in the fifth financial year (i.e. 2020) by using methods introduced on lectures.[40%] C – to calculate the sample firm’s forecasted value of equity per share at the end of the fourth financial year (i.e. 2019) by using one equity valuation model. [20%]

 

Module Learning Outcomes:

In this assessment the following learning outcomes will be covered:

LO 1. Able to reformulate the financial statements and calculate ratios correctly by applying the concepts of operating, financing and investing activities.

LO 2. Able to evaluate the accounting information and other related qualitative information in order to understand a firm’ financial performance and position.

LO 3. Able to understand analysts’ reasons for profitability forecasting.

LO 4. Able to apply statistical models and the asset valuation models correctly via Excel statistic function, STATA, SPSS or Eview.

LO 5. Students can collect the secondary data from Datastream, Bloomberg, Thomsonone.com, or databases on WRDs.

 

Grading Criteria:

For Part A (40%): 50%-59% (Marks: 20 – 24):  Introduction of the core business activities of the sample firm and competitor firms. Reformulate the selected financial statements correctly. Calculate ratios based on reformulated statements correctly and compare them with those of the competitor firm.  Illustrate the changes in ratios but without support from qualitative data (like managers or analysts’ point of views/reasons, or student’s own view based on past news.)  60%-69% (Marks: 25 – 27): Introduction of the core business activities of the sample firm and competitor firms.  Identifying the business strategic stage of the sample firm. Reformulate the selected financial statements correctly. Calculate ratios based on reformulated statements correctly and compare them with those of the competitor firm.   Discuss the changes in ratios with the support of qualitative data (like managers or analysts’ point of views/reasons, or student’s own view based on past news).    70% or above (Marks: 28 or above): Introduction of the core business activities of the sample firm and competitor firms.  Identifying the business strategic stage of the sample firm with SWOT analysis, Boston Consulting Group, or Life cycle model. Reformulate the selected financial statements correctly. Calculate ratios based on reformulated statements correctly and compare them with those of the competitor firm.   Critically discuss the changes in ratios with the support of qualitative data (like managers or analysts’ point of views/reasons, or student’s own view based on past news).   Students’ points of view show their understanding about the sample firm’s financial performance and position.  Their analysis is logical without contradiction.

For part B (40%):

50-59% (Marks: 20 – 24):

  • Adopt common size and trend analysis
  • Without refer to analysts’ reports but relying on a simple statistic method, like mean, geometric means at deriving sales forecasts, without indication of assumptions. Or simply adopt one analyst’s sales forecasts from his/her report but without discussing his/her reasons.
  • Indication of the difference between the expected and realized results but lack of explanation.

 

60%-69% (Marks: 25 – 27):

  • Adopt common size and trend analysis
  • Adopt two analysts’ sales forecasts. Or adopt one statistics model, such as Holt’s method, multivariate regression model, or other models with illustration of assumptions.
  • Students also compare analysts’ reasons and forecasts with their own perception based on their work on Part (a).
  • Compare and explain the difference between the estimated forecasts and the realized financial performance or position.

 

70% or above (Marks: 28 or above):

  • Adopt common size and trend analysis
  • Refer to two analysts’ sales forecasts, and critically evaluate their reasons. Or adopt one statistics model, such as Holt’s method, multivariate regression model, or other models with illustration of assumptions.
  • Students also compare analysts’ reasons and forecasts with their own perception based on their work on Part (a).

Compare and explain the difference between the expected and realized financial performance with referring to qualitative data, such as analysts’ or managers’ explanation, and past news.   The forecasts must match with the business strategic position of the sample firm identified at Part (a).

 

For Part C (20%):

50-59% (Marks: 15 – 17):

  • Adopt one equity valuation model and apply it correctly.
  • Only referring to the analyst’s long term growth rate (of residual income, residual operating income or free cash flows, or free cash flows to equity, or dividend) but without explanation.
  • Generally compare the fundamental value of ordinary share derived with the realized share price by the end of fourth financial year.

 

60%-69% (Marks: 18 – 20):

  • Adopt one equity valuation model and apply it correctly.
  • The work of valuation model is consistent to the work in Parts (a) and (b).
  • Referring to the analyst’s long term growth rate (of one of above variables) with referring to their explanations or assumptions.
  • Compare and explain the difference between the expected and realized share price.

 

70% or above (Marks: 21 or above):

  • Adopt one equity valuation model and apply it correctly.
  • The work of valuation model is consistent to the work in Parts (a) and (b).
  • Referring to the analyst’s long term growth rate (of one of the above variables) with referring to their explanations or assumptions. Students present their own view on long term growth rate based on his/her perception on the sample firm’s financial performance.
  • Compare and explain the difference between the expected and realized financial performance with referring to qualitative data, such as analysts’ or managers’ explanation, and past news. Provide recommendation on whether the company would be a suitable investment target.

 

 

Feedback to Students:

Both Summative and Formative feedback is given to encourage students to reflect on their learning that feed forward into following assessment tasks. The preparation for all assessment tasks will be supported by formative feedback within the tutorials/seminars. Written feedback is provided as appropriate.  Please be aware to use the browser and not the Canvas App as you may not be able to view all comments.

Plagiarism:

It is your responsibility to ensure that you understand correct referencing practices. You are expected to use appropriate references and keep carefully detailed notes of all your information sources, including any material downloaded from the Internet. It is your responsibility to ensure that you are not vulnerable to any alleged breaches of the assessment regulations. More information is available at https://intranet.birmingh am.ac.uk/as/studentservices/conduct/misconduct/plagiarism/index.aspx.