JNB518: Finance for Decision-Making
Question 1
The following data relates to the financial information of Chen Logistics Pty Ltd as at 30 June 2022. Complete the following tasks for the company. The company tax rate is 30%.
(1) Prepare an income statement for the year ended 30 June 2022.
(2) Prepare a balance sheet as at 30 June 2022 in a vertical format.
(3) What are the retained earnings for 2021 and 2022?
Question 2
Suppose you are working in a financial institution as a financial advisor. Recently you received a request from a client who is interested in investing in shares of two international container terminal operators, International Container Terminal Services (ICTSI) Inc. and COSCO Shipping Ports Limited. You have to provide a written report to the client on the companies’ financial performance and recommended actions for investment. The two companies’ consolidated financial reports for 2021 are available in their annual reports in
the below links (also available in MyLO in the ‘Assessment Information’ file under the Content Tab).
The share prices of International Container Terminal Services (ICTSI) Inc. and COSCO Shipping Ports Limited on 9 June 2022 were PHP202.00 and HKD6.01 respectively.
International Container Terminal Services (ICTSI) Inc. Annual Report 2021:
where the Consolidated Balance Sheet and Consolidated Income Statement are available on pages 46-48. COSCO Shipping Ports Limited Annual Report 2021:
where the Consolidated Balance Sheet and Consolidated Income Statement are available on pages 126- 128.
Use the two-year data i.e., 2020 and 2021 in each company’s consolidated balance sheet and income statement for the analysis. Notes to financial statements are also available in the reports, which provide further information for your analysis. Your report should consist of the following:
(1) Calculations of the ten (10) financial ratios below using relevant data in the reports for the two companies for the two years (i.e. 2020 and 2021).
(2) Analyses of financial performance of the two companies based on short term solvency, financial stability (gearing), efficiency of asset management, profitability, and marketplace performance over the two year period.
(3) A cross sectional analysis using 2021 ratios.
(4) Investment recommendations based on your analysis results. You should research relevant information to help you make recommendations, such as current market environment of the container shipping and port industry and the companies’ business nature and strategies.
