Management Accounting and Business 30% Online Individual Assessment – Business Report

 

                                                                                                             

 

 

 

ACCT1060 Management Accounting and Business

30% Online Individual Assessment – Business Report

 

 

Student ID Student Name Tutorial Class date and time

 

Tutor’s Name
       

 

INSTRUCTIONS TO INDIVIDUAL ASSESSMENT

The business report is an open-book assessment.
Complete the assessment before the due date and upload the report via Turnitin
Please prepare your assessment as a business report

 

Submission:

The submission files should be uploaded on Canvas. The submission link is available in the Assignments 2 tab on Canvas.

The submission files should be in the word format. And please name your assignment in the following manner: your last name, your first name, and your student number, for example: KoxRoberts3123007.

You must ensure the first page of your assignment contains: your full name, student number, and your chosen company’s name.

It is your responsibility to ensure that you have submitted the assignment correctly and is available for marking via canvas by the due date.

Length:

The total word limit is 3000 words.  The word count does not include the list of references and executive summary.

 

 

 

 

 

 

Formatting:

The report should be written in Times New Roman, 12-point font, single spacing, minimum 3 cm margin on left and right side of paper.

  1. Title
  2. Executive Summary
  3. Table of Content
  4. Introduction (overview)
  5. Data Analysis based on:
    1. Capital structure policies
    2. Bond Valuation and Share Valuation and dividend policies
    3. Cost of capital
  6. Conclusion and Recommendations
  7. References
  8. Appendices

 

References:

Full referencing (in-text citation and reference list) is required for this assignment. Please follow RMIT Harvard referencing style. You need to provide at least 5 academic references.

Penalties for Late Submission and Exceeding Word Limits:

Unless an extension has been granted, penalties will be applied for late submission.

All assignments will be marked as if submitted on time. Late submissions of assignments without special consideration or extension will be automatically penalised at a rate of 10% of the total marks available per day (or part of a day) late. For example, if an assignment is worth 30 marks and it is submitted 1 day late, a penalty of 10% or 5 marks will apply. This will be deducted from the assessed mark. Assignments will not be accepted if more than five days late, unless special consideration or an extension of time has been approved.

Assessment items that exceed the word limit by more than 10% (not including references, tables, figures, and appendices) will attract a marking penalty that is 5% of the total available marks. For example, an assessment item with a word limit of 3,000 words will incur a penalty of 5% if the submission is in excess of 3,300 words.

Academic Integrity and Plagiarism:

Academic integrity is about honest presentation of your academic work. It means acknowledging the work of others while developing your own insights, knowledge and ideas. Plagiarism is the presentation of the work, idea or creation of another person as though it is your own. It is a form of cheating and is a very serious academic offence that may lead to expulsion from the University.

All submitted documents will be checked by Turnitin. Please check the similarity rate once you submit your assignment, and ensure they’re your own work, and that you’ve acknowledged the work and ideas from other sources. You should keep your similarity rate less than 15%.

If one student submits work that’s completely or partly copied from another, both students can be charged with academic misconduct. And recycling your own work can be plagiarism.

RMIT’s policy on Academic Integrity can be read at:

https://www.rmit.edu.au/students/student-essentials/assessment-and-results/academic-integrity#support

 

Business Report detail requirements:

Students are required select one of following 3 companies and you need to download company annual reports 2017 to 2021 (four-year annual reports)

No ASX    Code Company Name Market Rate (rm)
1 CSL CSL Ltd 11.49
2 WOW Woolworth Ltd 11.49
3 TLS Telstra Corporation 11.49

 

Databases students may use to collect some financial data to estimate the cost of capital:

 

IBISWorld Access Link: https://my-ibisworld-com.ezproxy.lib.rmit.edu.au/

How to find Beta?

Examples:

CSL Ltd  Try this link

Levered beta measures the risk of a firm with debt and equity in its capital structure to the volatility of the market. So, please consider levered beta for your study.

 

How to find market rate:

The compound return from the All Ordinaries Total Return index (ASX: XAOA) from June 1979 (when it started) to end June 2020 is 11.49%.  You can safely quote this as the average return from the stock market.

https://marcustoday.com.au/2020/10/what-is-the-average-return-of-the-asx/

 

 

 

 

 

  1. Title: Provide a title of your report followed by a Lego that represents your company.

 

  1. Executive Summary:

An executive summary provides a condensed version of the main report in three paragraphs that discuss (1) the aim of the report, methods used to analyse financial data (e.g. trend analysis based on historical financial ratios); (2) findings; conclusion and recommendation; and (3) limitation of the report. (5 marks)

 

  1. Table of Content

 

  1. Brief company and industry overview:

What is the selected company and what industry that the selected company operates in (Hint: Agriculture or Manufacturing etc.), discuss the competitive industry landscape, and provide an industry outlook? What are the essential products or service in this industry? Briefly list and describe the most important ones. Who are the major operators (major companies) in this industry? Who are the primary buyers or customers (Hint: major markets) of the products of this industry? (5 Marks)

 

  1. Data Analysis
    • Analysis of company’s capital structure policies (maximum 900 words) (5+5+5+(12+3)15= 30 marks)

Describe the capital structure considering the following criteria:

  • Why is capital structure analysis useful for a company? (discus on optimal capital structure, firm value, why higher EPS does not always support for the optimal capital structure).
  • What does the capital structure theory say about a company’s capital structure?
  • Assess firm’s capital (i.e. capital structure of the selected company) over five-year period (i. e. 2017 – 2021) using the data collected from DatAnalysis Premium database. In your analysis
  1. Use debt ratios, debt – equity ratios and Times interest earned ratios to assess the company’s current performance against its past performance ( i. e trend analysis) and its current performance against its competitors (i.e. industry analysis). How might they be useful in value chain analysis?  Please use 5–year financial data from 2017 to 2021 (please conduct performance analysis over the 2017–2021 period).
  2. Based on the findings found in a, what is your opinion about the company’s capital structure, specifically degree of financial leverage. (HINT: Make an informed assessment about its firm capital structure based on these solvency ratios).

 

 

 

 

  • Analysis of company’s long-term debts(bonds), share valuation, and dividend policies (maximum 900 words) (5+ 5 + 15 = 25 marks)
    • Explain the relationships between bond prices and interest rates and explain why it is important for company managers as well as investors to understand the relationship.
    • What long term borrowings are available to the company (e.g. bonds, long term loans)? Provide information on terms (e.g. coupon rates, maturity period for bonds, interest rates and term period for loans).
    • Describe the types of shares held by the company. What can you say about the history of company share issues, retained earnings and payment of dividends? Are they following any specific policies for these? (please refer notes to the accounts in the annual reports).

 

  • Analysis of company’s cost of capital (maximum 900 words) (5+ 5 + 15 = 25 marks)
    • (1) What is the main benefit of debt financing? How does it affect the firm’s cost of capital? (2) How do the cost of debt, the cost of equity, and the weighted average cost of capital behave as the firm’s financial leverage increases from zero?
    • Discuss the importance of the knowledge of the cost of capital the selected company.
    • Calculate company cost of capital for, 2017, 2018, 2019, 2020 and 2021 financial years. Compare with the required rate of return and assess the actual performance.
  1. Findings, Conclusion, Recommendation and recommendations and Limitations of the report (5 marks)
  2. References (5 marks)
  3. Appendices

 

(Hint: You can calculate WACC of the company. To do that you must identify following):

  1. Equity market value
  2. Interest bearing non-current liability/s market value (or book value). If market values are not given for debt, please take book value.
  3. Selected Company Beta
  4. SMA 15-year Bonds rate (risk free rate) and
  5. Market/industry expected rate of return.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business report – 30 marks

 

  Below Satisfactory Level

(Fail)

Satisfactory

(Pass)

Good

(Credit)

Very Good

(Distinction)

Excellent

(High Distinction)

Ability to identify the issue(s) relating to the research task 

(Part 1: Strategy)

 

 10 marks

 

Unclear or no discussion/explanation of the issue. Discussion too general and not related to the specific company and industry. No attempt at critical analysis.

0-1 marks

dentification but only limited discussion/ explanation of the issue. Discussion sometimes too general and/or not relevant to issue. Discussion is without adequate detail (where required). Discussion not specifically related to the company and industry. Very little attempt at critical analysis.

2 – 5 marks

Identification and discussion/explanation of the issue. Discussion is usually relevant to the issue. Discussion usually includes adequate detail (where required). Discussion is usually specifically related to the company and industry. Good attempt at critical analysis.

6 – 7 marks

Identification and discussion/explanation of the issue. Discussion is mostly relevant to the issue. Discussion mostly includes adequate detail (where required). Discussion is mostly specifically related to the company and industry. Very good attempt at critical analysis.

7.5 – 8 marks

Clear identification and discussion/explanation of the issue. Discussion is always relevant to the issue. Discussion always includes adequate detail (where required). Discussion is always specifically related to the company and industry. Excellent attempt at critical analysis.

9 -10 marks

                                                                                                                                                                                                                                                                                                                                                                                        Ability to apply appropriate financial analysis and management accounting skills and techniques to the chosen company 

 

10 marks

Little or no attempt has been made to link financial analysis and management accounting skills and techniques to the discussion or the links made are incorrect; multiple management accounting skills and techniques are discussed with no link to the company

0-1 marks

Very limited attempt has been made to link financial analysis and management accounting skills and techniques to the company of investigation, these links lack clarity; management accounting skills and techniques were discussed but not linked to the company

2 – 5 marks

Some links are made between the financial analysis and management accounting skills and techniques to the company of investigation, but these links are not clear and are unexplained.

4-6 marks

 

The report makes links between financial analysis and the management accounting skills and techniques to the company of investigation, but these links are not always clear; the report mostly manages to explain these links

7-8 marks

 

The report makes clear links between financial analysis and the management accounting skills and techniques to the company of investigation; the report explains these links with clarity

9-10 marks

 

Ability to synthesise information into a coherent and engaging report 

5 marks

The report is not presented profession-ally; there are many errors in grammar and punctuation; the report is not engaging and/or is not easy to read; the report is incorrectly structured and/or missing sections

0-0.5 marks

Improvement is needed in the report presentation; there are some errors in grammar and punctuation; re report is not engaging and/or is not easy to read; sections of the report are missing and/or there are errors in the structure

1-1.5 mark

The report is reasonably presented; there is an attempt at correct grammar and punctuation; the report is not very engaging; most sections of the report have been included.

2-3 mark

The report is professionally presented; most of the grammar and punctuation are correct; the report is engaging and fairly easy to read; all sections of the report have been included and correctly structured

3.5-4 marks

The report is professionally presented; all grammar and punctuation are correct; the report is highly engaging and easy to read; all sections of the report have been included and correctly structured

4.5-5 marks

Depth and quality of research undertaken and Referencing

5 marks

 

There is a lack of evidence of relevant research; the research presented does not support the topic; sources referred to are not current or from a reliable source; no sources acknowledged; major errors in reference list and referencing style

0-0.5 marks

Some of the materials referred to are relevant; there is a lack of cohesion between the references cited and the topic being discussed; sources referred to are not current but are from a reliable source; few sources acknowledged; errors in reference list and referencing style

1-1.5 marks

Many of the materials referred to are relevant; references generally support the positions presented; some of the sources referred to are from a reliable source; some sources are acknowledged, but with a few errors

2-3 mark

Most of the materials referred to are relevant; references generally support the positions presented; sources referred to are mostly current and from a reliable source; most sources acknowledged correctly with reference details

3.5-4 marks

Materials referred to are relevant; references support the positions presented; sources referred to are current and from a reliable source; sources acknowledged correctly with full reference details

4.5-5 marks