FINANCIAL STATEMENT ANALYSIS

This assessment comprises a 2,500 word paper. Students are asked to prepare a report setting out a financial analysis of a publicly listed company.

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Task:
“You are an assistant analyst for an investment bank. Prepare a report which sets out a complete financial analysis to an adjusted set of accounts of JB Hi-Fi Ltd. It is not sufficient to simply present typed or spreadsheet solutions. You are required to demonstrate and explain your assumptions and the workings to obtain your solutions.”

Format: typed 12-point Times Roman font; A4-sized pages, stapled top-left corner, no cover.

Assessment Criteria Guide for Assessment 2_FIN3FSA, Semester 1, 2016

Your assignment was assessed according to these criteria: “You are an assistant analyst for an investment bank. Prepare a report which sets out a complete financial analysis to an adjusted set of accounts of JB Hi-Fi Ltd. It is not sufficient to simply present typed or spreadsheet solutions. You are required to demonstrate and explain your assumptions and the workings to obtain your solutions.”

Analysis and interpretation of results

• Could be improved by provision of an introduction to your assignment.
• Could be improved by provision of summary or conclusion of your opinion of JB Hi-Fi’s performance.
• You should list any limitations you have found with the data
• You should list any assumptions you have made.
• You should have demonstrated and explained “your assumptions.”

• You simply presented “typed or spreadsheet solutions,” with little or no analysis, which is insufficient.
• No or limited evaluation of the calculated ratios. The assignment is a spreadsheet with notes and no or limited analysis.
• No or limited analysis or evaluation of the change in ratios over time. Ratios for a single firm should be compared over time to identify trends. Could be improved by provision of explanation as to why a ratio is at a certain level or is changing.
• You did not analyse the different segments parts of JB Hi-Fi.
• You only partly analysed the different segments parts of JB Hi-Fi.
• You analysed the different segment parts of JB Hi-Fi very well.
• You did not do any cash flow analysis

• Your cash flow analysis was too superficial
• Your cash flow analysis was very well done
• Your cash flow analysis should be done on a direct not an indirectly presented cash flow statement.
• No or limited comparison of JB Hi-Fiwith major peers or competitors.

• Could be improved by provision of comparison with peers or competitors (i.e. companies) operating in the same industry.
• No or limited consideration of non-recurring items in the analysis. Analysis based only on published company reports, without adjustments, is insufficient. This limits your ability to evaluate and comment on ratios.
• Could be improved by inclusion of a five factor Dupont disaggregation and analysis of ROE– refer to White, et al (2003), p. 144.
• You should have used data as recommended: JB Hi-Fi:2011-2015
• You should not download ratios already calculated from a website.You were expected to calculate your own.
• You should have used the “Consolidated” data in your assignment, not simply company data.
• You should not use Morningstar or Mint Global data without a list of adjustments for any difference between the annual reports of JB Hi-Fi and the published data by Morningstar and MintGlobal. This is a serious error and a failure.
• You did not complete prospective analysis.
• Your prospective analysis did not take into account the changed competitive conditions for the company.
• You have not expressed an opinion.

Range and accuracy of calculations

• You should have demonstrated and explained “the workings to obtain your solutions,” that is, how you calculated the ratios.
• Only a limited number of ratios were considered. Could be improved by more extensive use of category and type of ratios.
• Only used _____ years of data, which provides only a _____ year(s) historical comparison. Ratios for a single firm at a single point in time are meaningless.
• Not sufficient history. Could be improved by the use of five years of data, with four years of calculated ratios.
• Thorough use of ratios.

Presentation

• Appendix 1 not included, which is the list of the adjustments. You have not done the assigned task. This is a serious omission and an automatic failure.
• You have attached list of adjustments, but the accounts are unchanged from the published accounts. You have not done the assigned task. This is a serious omission and an automatic failure.
• You have attached list of adjustments but the accounts are unchanged from the IBIS Report, MintGlobal or Morningstar supplied to you. You have not done the assigned task. This is a serious omission and an automatic failure.
• You have attached a list of adjustments but only adjusted the cash flow statement. The balance sheet has not been adjusted. This is a serious omission and an automatic failure.
• The adjusted financial statements are not attached. This is a serious omission and an automatic failure.
• Better to place statements in an appendix.
• Need to improve presentation.
• Structure and format can be improved.
• Keep each financial statement to one page.
• Need to improve grammar.
• Need to improve use of punctuation.
• Need to improve sentence structure.
• Need to improve spelling.
• Your assignment needs to be proof read before submission, for accuracy.

• The assignment contains no bad errors in writing or presentation, though it may demonstrate a need for further work to improve the basic techniques of writing. Need to improve sentence structure and use of punctuation.
• The written expression is clear and simple. It shows all the structural and technical elements of good, clear writing.
• Failure to include a correctly presented list of references.
• References (and/or footnotes or endnotes) are inadequate. Could be improved by utilising the convention of author, date, title, source (i.e. publisher) or internet source, location of publisher, and date accessed (if an internet sourced article).

General

• The written work is similar to another student’s work from this semester.
• The written work is similar to another student’s work from a previous semester.
• You should have prepared “a complete financial analysis to an adjusted set of accounts of JB Hi-Fi Ltd.”
• Too manywords. “Word limit: 2,500 words” maximum.
• Too few words.
• Your assignment should have been presented in “Format: typed 12-point Times Roman font.”
• Your assignment should have been in “A4-sized pages, stapled top-left corner, no cover.”
• You should have included a “coversheet … “Individual Statement of Authorship.”
• The assignment is incoherent. There is little or no evidence that much time or effort has been put into its preparation. It contains many examples of careless writing, punctuation, spelling, and so on.
• The arguments are not well structured. There may be a lack of logic in the order and connections between arguments; or a lack of logical support for these arguments.
• There is a sound, logical structure of argument throughout the assignment.
• The assignment shows evidence of high quality analysis.
• The assignment shows a good understanding of the major analytical concepts in answering the question.
• The assignment shows evidence of more extensive reading, and of the ability to discriminate between the ideas and the quality of argument, and of the ability to integrate it into the argument.
• The assignment demonstrates a mastery of the subject matter and objectives, as well as imagination and flair.