Question 2) Access The Reject Shop's [ASX: TRS] FY14 Annual

Report. Calculate the Return on Equity and Return on Assets. Please

explain the methodology that you have applied and what are the
pitfalls, if any?
The obtained return on equity was 11.83%. This was calculated
using the Profit for the period attributable to shareholders of The
Reject Shop Limited figure (14,508,000) and dividing this by the
average shareholders equity for FY14
((12,272,000+125,067,000)/2). The profit figure represented net
income. The average of shareholder equity was taken as to better
represent equity over the period of earnings. Taking such an
average is a better representation of shareholder equity over the
period of FY14 as opposed to just being a figure that represents
equity at the end of the period. This also allowed for the comparison
of the two measures time-dependent figures.
The obtained return on assets was 6.54%. This was calculated using
the aforementioned profit figure and the total asset figure
(221976000). The average of assets across FY14 was not taken as
the amount of assets had increased from 2013 to 2014. Therefore,
utilising the total asset figure produced a more conservative
estimate of ROA.
Both methods also used book value of equity and assets as opposed
to the market value of equity/assets. Market value could be a good
measure if TRS had a lot of assets that are poorly measured by
accounting measures. The fact that TRSs assets are largely made
up of inventories that are well measured by accounting principles
suggests that book value of equity/assets may be a better measures
than market value of equity/assets. Furthermore, ROE may unfairly
reward companies that are highly financed by debt and punish
companies that are not greatly leveraged. Given that the calculated
ROE figure has not been used for comparison and the fact that there
is nothing to suggest that TRS is earning its profit largely from debt,
ROE may be an accurate figure for returns in this scenario.
Question 3) What is the vision of Investing for Charity?
Please explain in 2-3 sentences.
Aside from being a public ancillary fund that raises capital for a
number for important charities, I4C endeavors to train and teach
students to become professionals within the financial industry.
Specifically, students of the program would be better equipped to
act equitably and responsibility when they pursue a career within
finance