1. Go to e-resources on WSU Library and from the alphabetical list click on “D” and then pick DatAnalysis
Premium database. Once you are in the database, go to the search engine on the top right and enter each the
following company’s ASX code:
– Capilano Honey Limited (ASX code: CZZ)
– Select Harvests Limited (ASX code: SHV)
For each company, the displayed page summarises general information about the company including the
sector and industry in which it operates, total market capitalisation of the firm, latest closing share price, etc.
Both firms are operating in the same sector and Industry Group (Food, Beverage & Tobacco) and same
Industry (Food Products).
2. On the left-hand side, click on “Financial Data”. The displayed page shows annual and interim
information for your assigned company (in the view bar, make sure you choose annual and not interim
data). On the page’s control bar at the top, you will see the first three icons which displays the company’s
summarised annual financial statements (income statement (profit & loss statement), balance sheet and
the cash flow statement). Additional information, such as the number of shares outstanding at end of period
is also given in these statements for different years.
3. The figures shown on the Financial Data page are rounded figures and are not to be used in the
calculation of ratios. To access the raw figures, select the relevant time period from the ‘year range’ drop
down bars, and click on ‘go’. Once the figures appear, click on download spreadsheet. This will download an
Excel file that contains all the relevant financial statements i.e. Profit & Loss Statement, Balance Sheet, etc.
4. In the downloaded Excel file, you will see a sheet titled “Revenue Expense” in which you can locate the
Cost of goods sold (COGS) for each company for the different years.
5. For more detailed information about how to obtain the data required for your group assignment, please
watch the ‘How to Obtain Data for the Group Assignment’ video. The video is located in the
Assessment Zone under the Assessment 2: Numerical Problem Solving link.
2
REQUIRED
Your team has been hired as financial analysts by Elite Banking Corporation. The bank requires your team
to analyse the financial position and performance of the above assigned companies for the previous two
financial years (2016 and 2017), to determine whether the companies are eligible for a loan from the bank.
Your task involves answering the following 5 questions in your own words (i.e. do not simply “cut and
paste” information from the Annual Report or any other source). You must apply critical thinking
concepts when explaining and justifying your choices.
BASED ON THE INFORMATION AVAILABLE ON THE DatAnalysis Premium
DATABASE FOR BOTH ASSIGNED COMPANIES, ANSWER ALL OF THE
FOLLOWING QUESTIONS (1 TO 5 INCLUSIVE).
QUESTION 1:
Analyse the sources of finance (Debt versus Equity) for each of the two companies in 2017 as compared to
2016. Use two capital structure ratios to support your answer and provide an explanation regarding the
changes in the composition of the sources of finance for each enterprise. Note: ensure that you analyse in
this question, not just describe the ratio values. (2 marks)
QUESTION 2:
For each of the two companies, analyse their ability to successfully manage each of their categories of
expenses in 2017 as compared to 2016. Use three margin ratios to support your answer and explain any
change in the ability of each company to control costs. Note: ensure that you analyse in this question, not just
describe the ratio values. (3 marks)
QUESTION 3:
Analyse the ability of management to manage their fixed and total assets for each of the two companies in
2017 as compared to 2016. Use two Asset Management efficiency ratios to support your answer and explain
any change in each companies’ ability to use their assets to generate sales. Note: ensure that you analyse in
this question, not just describe the ratio values. (2 marks)
QUESTION 4:
Analyse the profitability of invested capital for each of the two companies in 2017 as compared to 2016.
Based on your calculations and your answers to questions 2 and 3, explain the main reason(s) for the change
in the profitability for each company over the two years. Note: ensure that you analyse in this question, not
just describe the ratio values. (3 marks)
QUESTION 5:
Given your answers and analysis in questions 1 to 4, what is your final recommendation: an approval or
denial of the loan to each and/or both firms? Discuss the basis for your recommendation. (4 marks)
3
NOTES
1. Ratios must be selected from those identified in your prescribed textbook (Bakry 2016). The use of
ratios other than those identified in the textbook and discussed in class will not gain any marks.
Include all supporting calculations for any values shown in Questions 1 to 5 in the Appendix. This is
not included in the word count.
Note: Marks will not be awarded if no supporting ratio calculations are shown in the Appendix.
2. In questions 1-4, an analysis is required and not just a description of the ratio. That means you need to
explain how the ratio changed over time and what are the main reason(s) for that change, and how that
will impact your company’s financial position.
3. In calculating the ratios, assume that all sales (operating Revenues- available in the profit & loss
statement) for the year are all on credit.
4. In calculating the ratios, ignore abnormals. You should only use figures before abnormals such as ‘Net
profit after tax before abnormals’.
5. Ratios calculated by the Morningstar analyst and available in the database are not to be used as guidance
for calculating your ratios. The analysist calculated some of the ratios using formulas different than the
one covered in this unit.
6. The assignment does not require the obtainment of industry/peer group averages for any of the
calculated ratios. The objective of the assignment is to compare each of the two companies’ financial
performance over the specified two-year period.
7. Reference List
Include any references you have used and cited in your assignment. Make sure all answers are fully
referenced using the Harvard referencing system, including in-text citations and a reference list at the end of
your assignment. For guidelines on using the Harvard referencing system see
https://library.westernsydney.edu.au/main/sites/default/files/cite_Harvard.pdf
Note: the reference list is not included in the word count.
8. Group Assignment Cover Sheet
Group assignments are to be submitted with a group assignment cover sheet. Assignments submitted
without a cover sheet will not be marked. The Group Assignment cover sheet can be downloaded from
the following link (click on Form Categories – Assessment – “Assignment Cover Sheet – fillable online”):
http://www.uws.edu.au/currentstudents/current_students/forms