You are an investment adviser, working to build a foundation of wealth for your clients. One of your wealthiest clients already has a diversified portfolio, which includes managed funds, property, cash/fixed interest and a few direct

Assessment Task 3

SEMESTER 1, 2023

Due date:

Week 10/11




No words limit.

LO assessed:

1 to 6.


Students are required to study, undertake a research, analyse and conduct academic work to the given instructions in the areas of business finance covered in learning materials 1 to 10 inclusive. The assignment should identify the main issues, including underlying theories, and explain financial performance measures used in your task. You are strongly advised to reference professional websites, journal articles and text books in this assignment (case study).


This assignment is to be completed in groups of 2 (3) students and is to be submitted in Week 10 of Trimester One.

This assignment should be completed in TWO PARTS:

Written Report should be completed in week 10.

80 marks

Oral Presentation during class in week 11.

20 marks

Further details will be given later in semester.

Key elements or milestones to be submitted in stages throughout the semester as per the schedule provided below. Feedback will be provided within one week of submission for each stage so that you can then amend subsequent sections if needed. MARKS will be subtracted for LATE SUBMISSION.


Stages to be completed


Names of each member of the group and a “business name” under which you will be providing your financial advisory services.

Name of the student and a “business name” under which you will be providing your financial advisory services.

The financial performance of the company will be investigated/analysed for the purposes of providing recommendation to your client. A company (listed on the ASX) will be allocated to each group by the lecturer. The students should obtain all information about the selected company from this web site:


Obtain a copy of the last Financial Statements including Income Statements, Balance Sheets, and Statement of Changes in Equity, Cash Flows Statements and Notes. You can download these documents from the suggested web site using the firm’s code (example, BHP- for BHP Billiton Company, etc).

Each group should:

Provide a historical description of the company.

Identify the type of company.

Provide a brief description of the companies’ operations and,

Provide a copy of the last TWO Income Statements and Balance Sheets (which can be downloaded from their web sites).

(Part 1& 2)

Calculation of Financial Performance Ratios

(Part 3 i)

Your companies’ Beta values and Expected Rates of Return using the Capital Asset Pricing Model (CAPM)

(Part 4 i & ii)

Using the gearing ratios for your company over the past two years, emphasise any improvement towards the maintenance of a preferred optimal capital structure.

(Part 5 i & ii)

Dividend Policy

(Part 6 i)


Final Submission of Complete Assignment (Week 10)


Oral Presentation (during class, Week 11)


You are an investment adviser, working to build a foundation of wealth for your clients. One of your wealthiest clients already has a diversified portfolio, which includes managed funds, property, cash/fixed interest and a few direct share investments. She wishes to expand her portfolio and is considering companies’ shares to add to her portfolio. (The investor has an extra $1 million that wishes to invest into companies that operate on the ASX.) The company, which you will examine will be allocated to your group by Week 4.

Part A: Written Report and analysis of the firm’s performance (including referencing)

80 marks

By the end of week 10 you should provide:A hard (and soft) copy of your report to your lecturer andA hard (or soft) copy to the other group members.You have one week to study the other group’s report (company) in order to debate with them during the following week’s (week 11) oral presentation.

You are required to do the following:

A brief description of the company

Prepare a brief description of the company, outlining the core activities, the markets they operate within and any factors in the companies’ history which you consider help present a “picture” of your company.

4 marks

Ownership-governance structure

Specify ownership-governance structure of the company:

Name the main substantial shareholders:With higher than 20.00% of shareholdings. Based on this argument you should classify a firm as a family or non-family company, andWith higher than 5.00% of shareholdings.

5 marks

Name the main people involved in the firm governance:A ChairmanBoard membersCEO.Whether any of these people has the same surname as any of substantial shareholders (>20% share capital). If yes- you could use this as an argument for the presence of an owner or family member(s) in the firm’s governance.Whether any of shareholders with more than 5% share capital is involved in firm governance.

5 marks

Financial Rations

Calculate the following key ratios for your selected company for the past 2 years. Annual reports are accessible via company websites (show all working out):

Return on Assets (ROA) = (NPAT / Total Assets)

Return on Equity (ROE)= (Net Profit After Tax / Owners Equity)

Gearing Ratio = Total Liabilities / Total Assets



Be sure that you have “proven” the above equation.

15 marks

Be sure to explain why the ROE (EBIT) is significantly greater than or less than the ROA (EBIT).

5 marks

Capital Asset Pricing Model (CAPM)

Go on-line to and type in the code for your company into the Search Stocks field and click on the magnifying glass button. For market risk premium and the risk-free rate of return, you can find information from the following link.

Discuss the expected returns and risk (both systematic and unsystematic).

5 marks

Calculate Expected Returns using the CAPM Model.

5 marks

If the risk-free rate is 4% and the market Risk Premium is 6%, use the CAPM to calculate the required rate of return for the companies’ shares.

5 marks

Is the company you and your partner have chosen a “conservative” investment? Explain your answer.

2 marks

Analysis of the gearing (leverage) ratio

Consider the gearing (leverage) ratios for your company over the past two years:

Does it appear to be working towards the maintenance of a preferred optimal capital structure? (i.e., does it appear to be “stable”?) Explain your answer.

3 marks

What have they done to adjust / amend their gearing ratio? Increase or repay borrowings? Issue or buy back shares? Has the Director’s Report given any information as to why they have made any adjustments?

6 marks

Dividend policy

Discuss what the dividend policy of the management of the company appears to be. Explain fully.

6 marks

Letter of recommendation

Based on your analysis above, write a letter of recommendation to your client, providing an explanation as why you would like to include this company in their investment portfolio. Please refer to the ratio results calculated earlier and any other trends or factors that you believe to be important.

10 marks

Formal structure and referencing

4 marks

Part B: Oral Presentation (10min oral presentation and 5 min discussion)

(During class- Week 11).

20 marks

You are required to do the following:

To make an oral power point presentation (in the SAME groups for the Written Report).Maximum ten slides (including introduction and conclusion slide).Assume you are in the stock market and you want to promote your company.Provide a brief description of the company, outlining the core activities and any advantages which may help to convince the future investors to fund your firm.Explain if it is a family or non-family firm

5 marks

You should be prepared to argue against another group (thus, another company) in order to encourage market participants to buy securities of your company.Be confident during your speechProvide strong arguments for your companyUse arguments from your analysis (report).Emphasise the strengths of your companyOutline weaknesses of your competitor (the other company).

5 marks

Provide links between the theoretical concepts that we studied in this course and the practical issues that you can find out in the firm’s financial reports (information).

5 marks

Answer the questions of other market participants (audience) clearly.

3 marks

Provide a brief account of what you feel that you have learned from this analysis while undertaking this case study.

2 marks


The report must have an academic written structure including an introduction, body and conclusion.This assignment must be completed in groups of two students.Use numbers in the body of the essay (e.g. “6. Dividend Policy”).Provide an explanation on each of these topics and explain how they confirm the underlying theory, particularly related to the financial measures.You are only required to submit one assignment to StudentWeb.You are required to submit this assignment to Turnitin (one per group). Please ensure the similarity score is under 15%.

Presentation of written work

Please submit your assignment on time.Please make sure that the names of all members (and student’s IDs), unit name and code are written on the cover sheet of the submitted assignment.You are required to use a Times New Roman font, size 12 point with 1.5 line spacing.Please insert page numbers into your assignment.Please use 3 cm margins.Submitted work should be your original work showing your creativity.Always keep an electronic copy until you have received the final grade for the Unit.

A high standard of work is always expected, so poorly presented work may be returned unmarked with a request to re-submit.

The rules apply for both electronic and hardcopy submission. When you submit your assignment electronically, please save the file as ‘assessment task 3.doc’.


When writing your assignments, a reference must be included every time you use someone else’s ideas or information. In-text referencing ALL sources, whether academic books, journal articles, newspaper articles, material from the Internet etc., must be cited in the main text of the assignment itself. Harvard Style referencing is required for this assignment.

A reference must be included when you:

• Paraphrase (express someone else’s idea in your own words).

Quote (express someone else’s idea in their exact words).Copy (financial statement, reproduce a diagram, graph or table from someone else’s work).


Ross, S., Trayler, R., Bird, R., Westerfield, R., & Jordan, B., (2019), “Essentials of Corporate Finance”, 5th Edition, Mc Graw Hill, Ltd, Australia.

Halili, E., Saleh, A., and Zeitun, R., (2015), ‘Governance and Long-Term Operating Performance of Family and Non-Family Firms in Australia’, Studies in Economics and Finance, vol.32, no.4, pp.398-421.

History of the ASX, viewed Mar 08 2023 ,

Plagiarism, collusion and cheating

MIT regards most seriously any act of dishonesty in assessments such as plagiarism, collusion, cheating, re-submission of previously marked work in different units, examination misconduct and theft of other students’ work. For further information, please refer to the Academic Integrity Section in your Unit Description.

In short:

‘Plagiarism’ means to take and use another person’s ideas and pass these off as your own by failing to give appropriate acknowledgement, that is, not indicating by referencing that the ideas expressed are not your own.

‘Collusion’ (or unauthorised collaboration) means joint effort in preparing material submitted for assessment, between students or others, except where this has not been approved by the lecturer in charge of the unit.

‘Cheating’ means to obtain an unfair advantage in an examination or in other written or practical work required to be submitted or completed by a student for assessment. If the passing off was done intentionally, you have cheated; if it was unintentional, the offence you have committed is the academic misdemeanour of failing to reference a source correctly.

Acts of dishonesty in assessment could result in penalties including failure in the Unit and possible exclusion from MIT. If you are unsure about this, please speak to the Unit co-ordinator/lecturer.

Concluding Notes:

Working in groups has its pros and cons. I am sure that you will work enthusiastically and constructively in your groups. In cases of disagreement, you will be able to solve them in a professional and rational manner. Open and constructive communication always has positive impact on team work. There could be time when you may have to agree or disagree with each other. However, if you are unable to resolve issues, you are very welcome to see me and we will work together to sort the problem out. I believe you can learn a lot by discussing different issues with your colleagues.