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HA1022 Principals of Financial Markets Group Assignment
In groups of 3-4, students should choose firstly an industry and secondly two (2) ASX listed companies in this same industry upon which to undertake a fundamental analysis.
Fundamental Analysis seeks to identify factors that are likely to influence directional changes in the value of a company and hence its share price. These factors may be macro or micro in context.
Requirements. The assignment comprises two related sections:
a) Conduct a Top Down analysis of the overall economic environment and consider how
forecast changes in economic fundamentals will impact on the performances of companies in the industry your group has chosen. Consider questions including, but not limited to: What is the current interest rate? What is the current value of the SAUD? What is current GDP? What is the inflation rate? What business cycle is the economy currently operating in?
b) Conduct a Bottom Up analysis of companies current financial situation. Consider accounting ratios and measures of a firms performance, how these need to be compared to the industry and company history,
• All of the required information for calculation and often the actual
ratio/number can be found on various websites on the intemet.
• http://www.investsmart.com.au/
Note: When your group is performing the fundamental analysis take a less is more approach. Select a few key performance measures then define each measure; explain what the measure is supposed to show and then what it is showing for the industry/your companies.
Refer to both your textbook and information available on the intemet. This assignment involves research to finding the information and then analysing this resulting information.
When writing the report, imagine that your audience are people that know nothing about finance or the financial markets. At each stage you will need to carefully explain what do are analysing and why. Do not think that just because your lecturer will know what this ratio means that you do not have to define it.
You should also give a brief introduction of the industry and the history, mission statement of your chosen companies. Your paper should conclude with a summary of your findings and recommendations for each of your companies. Word length is 2500 (+A 10%).
Please refer to the marking guide and rubric below for the structure and mark allocation for requirements and breakdown of marks for your assessment.
I. Executive summary 2 marks
2. Introduction 3 marks
3. Top-down analysis 5 marks
4. Bottom•up analysis 5 marks
5. Summary and recommendations 3 marks
6. Referencing 2 marks
Total 20 marks