ASSESSMENT BOOKLET 1:

Analyst Report
FNCE3000 Corporate Finance
Semester 1, 2024
1. Overview

Assessment Schedule*
Task Participants Weight (%) Date due
Analyst Report Individual / Group 40 Friday 12 April 11.59 pm (AWST)
Portfolio Individual 30 Sunday 5 May by 11.59 pm (AWST)
Interactive Oral Individual 30 Monday 13th May – Friday 24th May
*Pass requirements: Students are required to attempt and submit all assessment tasks and achieve an overall
mark of 50 or above to pass the Unit.

The aim of these assessments is to assist you to:

 Develop a deeper understanding of corporate finance concepts.

 Appreciate current issues discussed or faced in the industry.
 Apply your knowledge to investigate real companies.
 Prepare for an interview with a potential employer.

Through these exercises, you will gain a better understanding of how corporate finance concepts
can be applied in the real world. This is an excellent opportunity for those who wish to pursue a
career as a finance officer / manager.

For those who are taking this unit as an elective, it provides the foundation and tools needed to
investigate the financial health of a company and assist in the decision to purchase its shares for
investment.

2. Communication

If you have any queries, please try to approach your tutors first, lecturers second and unit
coordinator last;
Written communication is preferred;
When sending emails to the unit coordinator, please use this format in your subject field:
CF, <last name>, <first name>, <student ID>,<location>
E.g. CF3000, Smith, John, 123456A, Bentley.

The purpose of the email should be stated in the first line of the main body. Failure to follow this
format may result in a delayed response. The UC oversees 500+ students across various units,
locations, and modes, making it challenging for him to comprehend your query promptly and
respond in a timely manner.

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3. Analyst Report (40%)

Objective: To prepare an analyst report on a publicly listed, dividend paying company.

Formation of a group is preferred but optional. Students may create groups with a maximum
of 2 (two) members to complete the assignment. To do so, students must complete and sign the
group sign-up form (available under the assessments tab in Bb) and submit it by Sunday, 17th
March, 11:59 pm (AWST) (week 3). This submission must be made via Turnitin, and both
group members must sign the sign-up sheet. Only one submission per group is required;
submitting two separate entries is evidence of a lack of communication between group
members and may incur a penalty. If you have chosen to complete the assignment
individually, you must still submit the group form with only your details and signature.
Failure to submit the group form by the deadline will result in a penalty of up to 10% of the
overall assignment marks, at the UC's discretion.

It is your responsibility to form a group and allocate tasks. Exchange phone numbers and
relevant contact details with your group member. Moreover, you are to discuss and collaborate
with your group member via a cloud platform, e.g., Google Docs. The assignment will be
assessed according to the rubrics and criteria provided at the end of this document.

The presentation of the assignment should be in 1.5 lines spacing and 12pt font. It should not
exceed 4,000 words. A variation of +/- 10% of this limit is acceptable, but you must inform
your tutor before submission. The word count excludes tables, diagrams, charts, and AGLC
references.

4. Group Assignment details

You are to select a publicly listed dividend paying company from the country of your study
location (e.g. Australia for the Bentley campus) and conduct a detailed analysis on it.

Please go through the 5 checklist at the next page before you commence your
assignment. Selection of a company that do not meet the criteria will incur a 30%
penalty.

Australia based students must NOT select Domino’s Pizza (DMP), BHP Group Ltd (BHP),
Fortescue Metals Group Limited (FMG), Wesfarmers (WES), Telstra (TLS), JBHiFi (JBH),
Harvey Norman (HVN), Northern Star Resources (NST), Woolworths (WOW), banks,
insurance companies, REITs and investment companies. If you are unsure, please check with
your tutor/lecturer during tutorial / lecture / consultation hours.

The purpose of this assignment is to use your acquired knowledge from this unit to investigate
the financial strength of a public listed company. Your research should cover the following 4
sections:

 Shareholder analysis (15%) – Who are the owners of the company and the implication
to the choice of methods used to calculate the cost of return.
 Risk-return analysis (15%) – Analyse the return received over the market for the
apparent risks identified in the company.
 Cost of capital (40%) – Calculate the cost of capital using various methods and analyse
your findings.
 Financial statement analysis (30%) – Determine the future of the company by
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 analysing the performance of the company.

In each of these sections, you are to report your findings using the format provided below. If the
information is not from the company’s annual report, you will have to provide details on:
 where you sourced the information; and
 comment on how you have verified its reliability.

If the information is from the annual report, you do not need to reference, but you must include the
page number of the annual report from which the information has been taken, for example: (pg
XX).

The assignment must be written completely by you and your group members. You are not to purchase
or reproduce commercial stock reports.

5. Refinitiv Workspace

All students will receive their own login details for Refinitiv Workspace by week 3. This web-based
database platform is extensively used in the industry and will add value if you could develop some
expertise in using it. The UC will run a workshop during the lecture in week 4. You are also welcome
to see the UC during the consultation hour if you need more assistance in using the database.

6. Group Assignment Requirement

Before you start:

Do not choose the company unless it satisfies the following, otherwise you will get a 30% penalty.
1 Dividend paying: Check if the company has been paying dividends for the last 2 years
and has been listed for more than 5 years
2 Annual report: Check what is the latest available annual report. You must use the
latest report that has been released before 4th March 2024.
3 Reporting currency: Check that the company reports in local currency (AUD for
ASX listed company). Look at the financial statements to verify.
4 Borrowings*: Your company must have long term (non- current) borrowings in
their Balance Sheet (for CAPEX). These are usually loans, bonds, notes or leases.
Ignore accounts or trade payables, deferred tax or claim liabilities, provisions and
employer entitlements and derivatives. Watch lecture 2 for further details.
* In case your targeted/preferred company does not have long-term borrowing in its
latest published annual report, you are allowed to use the 2022 annual report in this
assignment, instead of the 2023 report. This is the only acceptable special circumstance
where a 2022 annual report can be used when the 2023 report is published and
available. Under no circumstances are students allowed to use the 2021 annual report;
they must select a different company in that instance.
5 Positive Earnings per share: Make sure that your company does not have a negative
earnings per share.

7. Important Referencing Information:

 Use referencing sparingly. More reference means less critical assessment. You are not
awarded marks for putting forth opinions of others.
 AGLC (Footnote) referencing is required.
 Referencing must be consistent (5% penalty).
 Do not reference material from textbooks and lecture slides.
 Do not include definitions or theory.
 If the information is from the annual report, do not reference; instead include the page
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 number of the annual report from which the information has been taken from.
 Do not quote directly from the annual report, journal articles, textbook, or lecture slides, or
provide formulas and definitions for equations. Instead, demonstrate your process and explain
your understanding in your own words.
 Appendices without intext page number reference will not be looked at. Do not
reference from stockbroking or investment companies/website/articles; including but not
limited to Simply Wall Street, Intelligent investor, Investsmart, Motley Fool,
investing.com, Investopedia, etc.

Assignment format template. The headings below are the headings of your assignment. Refer to
lecture and tutorial discussions of week 2, 3 and 4.

1. Shareholder analysis:

1. Summary of the business (what they do and how they make money)
1  Short description of the main operations of the business and the services or
products that they offer
 Investigate the business’ revenue sources
 If they have multiple revenue sources, investigate, and summarise them
 Summarise by using table or diagrams
 DO NOT reproduce material from website or annual reports
1. Chairman/Director’s message
2  Determine the potential target audience by assessing the:
i. Tone
ii. Words
iii. Theme
 Compare chairman’s message with 3 other companies (from different industry or
sector)
1. Profile of an investor of the company
3  With the use of graphs and charts to illustrate, describe the characteristics of a
typical investor for your chosen company.

Consider if the typical investor in your company is:

i. seeking regular income or deferred income (capital growth)?
ii. looking to invest for a longer or relatively shorter period of time
(speculating)?
iii. informed (experts) or uninformed (mums and dads) investor?

In your assignment, make comparisons to 3 companies (in other sectors) to

substantiate your reasoning. For example, if you think the investor is looking for
dividend income, show that the company is paying substantially more than other
companies using percentages comparison.

1. Identify Non-Marginal Investors

4 We need to consider the future cash flow of the business to assess the company’s
sustainability and profitability. However, the future cash flows must be discounted
using the appropriate rate.

As discussed in week 2, WACC is often used as an approximation for the rate.

CAPM is often used as an approximation for the cost of equity. However, when
there is a significantly high percentage of non-marginal investors, other methods
must be employed. In this assignment, we are only going to apply DGM as an
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 alternative to CAPM and compare the two models. Your investigation into the type
of investors in your company will assist in determining which model should be
relied upon.

Focus your attention on identifying non-marginal investors, such as founders,

insiders, directors, and related companies like suppliers. Individual names, family
trusts, private companies (mostly), share plans, and DRPs are all considered as
non-marginals. Nominees, custodians, banks, and investment companies are all
considered marginal investors and should be ignored from discussion.

When there is a high percentage of non-marginal investors, other calculation

methods (such as DGM) must be considered in addition to CAPM. No marks are
awarded for identifying marginal investors.

In addition to providing evidence of your research into non-marginal investors,

create a table listing the percentage of marginal vs. non-marginal investors.

% of Marginal % of Non-marginal Total (%)

Top 20
shareholders
Remaining
shareholders
Total (%) 100%

State clearly your assumptions of investors outside the top 20. (you may refer
Refinitive workspace to justify)

2. Risk-return analysis guide

2.1 Review and Evidence of listed risks

Discuss at least 3 external risks pertaining to the normal running of the

business. Some common ones are foreign exchange, interest rate, political and
legislative risks. Review the risks listed in the annual report rather than making
up your own.

Ignore internal risks; such as investment and financing decisions, credit, health
and safety, compliance and human resource management are all internal risks;
ignore them.

Competition and climate change are not risks (although they may appear in
the annual report).

Do not discuss Covid as a risk as there are other factors that must be
considered, such as government assistance and support, reduction of
competitors, difference in state border restrictions, etc.

In your discussion, show evidence of every risk you have identified and
explain why your company is more susceptible to that risk than other
companies. No marks are awarded for risks that are identified without clearly
showing evidence that they have impacted the company.

This can be done in a few ways. Below are some examples, which are not
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 exhaustive:
• relevant newspaper articles,
• correlation with identified variables, trend analysis
• comparison with competitors, etc.
• Share price decrease can be visual way to show the impact of the
risk in the past.
Do not address the steps taken by the company to address or reduce the risks.
2.2 Review of shareholder vs market returns (discrete)

The total return to the shareholder is the capital growth plus the dividend
received.

Use the ending share price for each of the reporting period as stated in the
annual report. If they are not presented there, only then you will source them
from Morningstar DatAnalysis (via Curtin library). Using the closing
unadjusted prices, calculate the one-year change in share price of the stock.

Use the dividend paid for the reporting period as stated in the annual report. If
the share is franked, you will have to gross it up to account for franking credits
and include special dividends. Look at the payment date of the dividends. As
dividends stated on the annual report are often the declaration date, you may
have to refer to the previous year’s annual report.

Use All Ordinaries (AORD) as your index. Follow the same period as your
annual report.

Calculating the total returns for the shareholder must be done paying particular
attention to the following:

• Time frames must match your annual report and index returns
• You have to include both the interim and final dividend and any
special dividends paid for the period.
• Look at payment date
• You have to gross the dividends up to include the franking credits.
Franking credits are only applicable for this section. Do not include
them in your cost of capital section

Use the following formulas:

Franking Credit = ( 1−CorporateTax

Dividend
Rate
−Dividend ) X Franking Proportion

Grossed Up Dividend=Franked Dividend+ Franking Credit

Note: in this equation, Dividend = total dividend paid for the period. If the
franking proportion is different for interim, final or special dividend, you will
need to do it separately and then add them up to get grossed up dividend.

Watch lecture 4 for full details.

2.3 Review of capital projects

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 Detail and present the capital projects that the company is undertaking in a
table:
 Short description
 Capital expenditure amount
 Duration of the projects.

Companies can also be rolling out projects previously announced. You will
need to look back at previous annual reports (include year and page number).
Do not reference commentaries, stock reports or news articles.

If the shareholders deemed that the risk are too high, they would demand a
higher return, and this will often result in the lower share price upon the
project announcement.

Capital projects are not cost savings, such as staff cuts, efficiencies, reduced
cost of inputs, etc. You should look for announcements of investments into
projects like acquiring a business, machinery, new premises, etc.

Discuss how are the risks identified in section 2.1 affect the profitability of the
capital projects?

3. Cost of capital guide

3.1a CAPM calculations

 β: Investigate the company’s beta from various sources (at least 3, eg.
Morningstar DatAnalysis (via Curtin library), Reuters, Yahoo Finance, etc).
 Choose a beta from one (1) provider and discuss the following to explain
your justification.
i. Time period (how far back)
ii. Calculation method (variables used)
iii. Presence of once-off events in the time period
 Rf: Use the yield of a 10-years Australian government bond for the risk-
free rate.
 Rm: Calculate market return using cumulative price return of ASX All
Ordinary index (the period should match exactly with your reporting period).
If it is less than 5%, you have to use an adjusted Rm. Perform the following
steps in sequence and show your findings for each step:

i. Use the financial year instead of reporting period, if they are

different for your company.
ii. Use a total return market index instead of price return index
matching the time period.
iii. As a last resort use the average cumulative total returns of longer
period (say 2-5 years)

(watch lecture 2 for details)

Include a table to show clearly the time frames of the variables used to
calculate CAPM.
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 Variabl Rate Sourced at
Period of (date to date)
e (%) (date)
eg.14/07/2021 -
Rf eg. X% eg.14/07/2021
13/07/2031
eg.01/07/2019 -
Rm eg.14/07/2021
30/07/2020
eg.14/07/2019 -
Beta eg.14/07/2021
13/07/2021

3.1 DGM calculations

b
All figures needed to calculate Re using the DGM can be found in the annual
report’s income statement and balance sheet section.

Use the following formulas:

D1
re= +g
P0

g= 1− ( D1
EPS )(
X
Net Income
'
Shareholde r sEquity )
D1 is the sum of the dividends for the reporting period (check payment date).
Don’t include any special dividends as it is a one-off occurrence.
Don’t include franking credits.
P0 is the beginning price of the share of the reporting period.

Use profit after tax for net income.

Include the page number of the annual report where you have obtained the
figures.

Use statutory not underlying, and do not use adjusted figures.

If your company has many divisions/operations, you have to use the figures of
the main group.

You may use the calculated basic EPS from the annual report, but check if they
have used adjusted figures and note in your report what they have adjusted for.

As per the checklist, Your EPS cannot be negative.

If your g is negative, you will have to take averages for the variables used in
the formula. The choice of which variable to apply an average will depend on
the company’s history. E.g. check company’s Dividend policy:
i. If company follows a constant dividend policy, take the average of 2-5
years the EPS, as needed to make g positive.
ii. If company DO NOT follow a constant dividend policy (varies from
year to year or once off extra dividend), take the average of 2-5 years
of the dividend, as needed to make g positive.

Make a note in your report that as the dividend payments are a few months
apart, the numbers may not fit the DGM formula well.
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3.2 Selection / justification of Re

Identify if there had been major events that occurred that may have caused a
huge fluctuation in volatility: this will affect ‘Re’ through CAPM.

Investigate if there had been a change in the dividend payout policy: this will
affect ‘Re’ through DGM.

Investigate and discuss the appropriateness of the growth rate (g) assumed in
the DGM calculations.

CAPM or DGM? Choose the method you feel is more accurate/appropriate and
justify your choice. (refer to section 1 of this assignment)

Use this to calculate the WACC.

3.3 Calculation of Rd

Identify all long-term borrowings used for CAPEX purposes. These are usually
loans, bonds, notes or leases.

You will need to use the publicly available information as an estimation for the
rate and add appropriate margin. This added margin is to account for the terms
or risks included in the loan contract.

To decide on the suitable margin, you need to identify investigate the maturity,
security and variability of the loan instrument.

Maturity – only investigate long-term debts (longer than 1 year). The

information would be found in the borrowings section of the notes. Longer
term loans would attract a lower margin.

Security – investigate if the borrowings are secured or not. The stronger the
security, the lower the margin.

Variability – identify if the various instruments are fixed or variable loans.

Variable loans are riskier and therefore would attract a higher margin.

Rate - you cannot use the interest repayments to ‘reverse’ engineer the rate.
You are to follow the steps below to calculate your weighted average cost of
debt:

a) Establish your base rate - Investigate the current bank bill swap rate
(BBSW) + credit rating (follow lecture 4 recording)
b) Apply a suitable margin to each loan instrument:
 Rank all your loan instruments in order of risk
 Apply a margin for each loan instrument
 Research publicly available loan rates to ensure that your margins are
reasonable.

Review the annual report to verify if there are any mandates or restrictions to
the amount to debt. A significantly high level of company debt would attract a
higher margin.
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 You still have to go through the above steps and include a margin on each loan
instrument even if a rate is provided in the annual report. However, you can
use that rate to justify your margin applied.

3.4 WACC calculation and analysis

Use market values. However, where market values for debt is not available,
you may use the book value.

How does the calculated cost of capital confirm your observation of the
market’s reaction to the capital projects when announced by the company?

What is your assessment of the cost of capital on the company’s current capital
projects identified in section 2.3?
4. Financial statement analysis guide

4. Calculations

Calculate the following ratios:

 ROA
 Asset turnover
 Operating profit margin*
 ROE
 Net profit margin
 Equity multiplier

Ensure that you show all calculations and footnote the page number of the
annual report where you obtained the figures from.

Conduct a Du Pont analysis and comment on each component the company’s

ROA and ROE.

Compare your calculated ratios with Morningstar DatAnalysis (via Curtin

library). Produce a table to show your comparison. If your calculated ratios
differ more than 10% from Morningstar, provide a short description explaining
the reasons.

* Operating profit margin is not available in Morningstar, so do not worry to

compare and report.

4. Time series analysis:

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 Source and report last 3 years of Morningstar calculated ratios and discuss. Do
not provide definitions for the ratios. Go straight into the discussion.

You are to identify 3 specific events, actions or decisions made by the

company and analyse the impact via financial ratios. These specific events,
actions or decisions are the headings of this section.

Provide a thorough analysis and discussion on challenges or areas that the

company should focus on.

4. Cross-sectional analysis

A company is considered as your peer / comparable / competitor if they are

match in terms of:
1. Size (Market Cap),
2. Age (ASX listing date),
3. Sector (same GICS code) and
4. Scope of operations (same business)

If you find a company that matches with your company across all the above 4
category, then use just that company to conduct a cross section analysis.
Alternatively, to conduct a robust cross-sectional analysis, you will need
to identify 2-3 other companies that can be considered as peer by
matching at least any 2 of the categories at a time. e.g. same age & sector,
or same size & age etc.

Provide a short discussion justifying your selection of companies as peer /

comparable / competitor.

Source and report in a table, 2 - 3 ratios of each of those companies from

Morningstar. Compare with that of your company and discuss.

Do not merely state that the company is performing better or worse than its
competitors.

Identify and discuss 2 - 3 specific events, actions or decisions of those

companies that can be used as logical explanation of the variation in
performance.

These specific events, actions or decisions are the headings of this section.

8. Plagiarism (including self-plagiarism) is a serious offence.

All work above 20% similarity index will be referred to the student disciplinary panel for
investigation. The investigation may take up to two month to finalise. If it is not finalised prior to the
release of the results, you will receive a F-IN grade. If your work is submitted to the student
disciplinary panel, you will be notified directly by the student advisers via your official Curtin Oasis
account. You will be given an opportunity to provide an explanation to the disciplinary panel. Your
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unit coordinator will not be involved in the process and will not be able to provide you with any
assistance in this matter. Interfering with the process will delay the outcome of the investigation.
Please refer to Curtin’s plagiarism guide and utilize the checklist provided below:

http://academicintegrity.curtin.edu.au/local/docs/StudentPlagiarismGuide.pdf
http://academicintegrity.curtin.edu.au/local/docs/StudentChecklist.pdf

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 9. Marking rubrics
Below expectations (0 – 49%)
Shareholders Summary of the business – (weighted 20%)
analysis 15%Reproduced substantial sections of annual report, websites and
commercial reports.
- Largely paraphrased other resources
- Did not elaborate on information from the sources
- No discussion of the annual report
Chairperson message – (weighted 20%)
- No or very limited discussion of chairperson’s message
- Did not provide reasons to justify assumption of target audience
Profile of the investor of the company - (weighted 40%)
not state whether investors are; income vs capital growth, long
vs short term, informed vs uninformed.
- Just stated the profile without justification.
- Did not provide a discussion about the differences in
investors
- Did not compare to other companies in the sector.
Comparison needs to discuss the previous findings
(income Vs capital growth, long vs short term and
informed vs uninformed)
Identify Non-Marginal Investors – (weighted 20%)
- Did not correctly identify non marginal investors
- Did not provide justification of the choice of non-
marginal investors
Meets expectations (50 – 69%) Exceeds expectations (70 – 100%)
Summary of the business – (weighted 20%) Summary of the business – (weighted 20%)
Somewhat described sections of annual report, Went beyond a simple description of sections of annual report:
- Interpreted the data collected - Thorough investigation of the business, subsidiaries and
- Elaborated on information from the sources distribution channels
- Analysis of the annual report - Clear knowledge and presentation of all revenue sources
- Information collected is summarised succinctly in tables and
Chairperson message – (weighted 20%) diagrams
- Not very clear summary of the message Chairperson message – (weighted 20%)
- Did not provide reasons to justify assumption of target audience - Clear summary of the message
- Provided detailed reasons to justify assumption of target
Profile of the investor of the company - (weighted 40%) audience
- Provided justification for the profile of investor.
- Provided a discussion about the differences in investors.
- Provided a comparison to other companies in the sector.
Profile of the investor of the company - (weighted 40%)
Comparison needs to discuss the previous findings (income Vs
capital growth, long vs short term and informed vs uninformed) - Provided clear and strong assessment of the profile of the invest
- Provided some graphs and charts or of your company.
- Provided a strong discussion about the assumptions of your
Identify Non Marginal Investors – investors' needs (income Vs capital growth, long vs
(weighted 20%) short term and informed vs uninformed)
- Correctly identified non marginal investors - Provided a comparison to other companies (at least 3) to justify
- Provided justification of the choice of non-marginal your assessment
investors - Graphs and charts are clearly labelled with detailed explanations
- Presented a table summarising the percentages of marginal and
non-marginal investors for both on and outside the top 20 list. Identify Non-Marginal Investors –
(weighted 20%)
- Correctly identified non marginal investors
- Provided evidence of research on the top 20
shareholders list
- Presented evidence for the justification of the choice
of non-marginal investors
- Presented a table summarising the percentages of marginal and
non-marginal investors for both on and outside the top 20 list.
- Clear assumptions and strong discussion on the investors
outside the top 20
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Page 14 of 17
Risk-return Review and Evidence of listed risks– (weighted 40%)
analysis 15% - Just identified risk and made some discussion
- Did not show evidence of the potential impact of
the external risk on the company
- Did not provided clear reasoning and evidence
that your company is more susceptible to the risks
than competitors
- Did not showed the past impact of this external
risk on the company
- No graphs and charts
Review of shareholder vs market returns – (weighted 30%)
- Did not calculate return of the All-Ordinaries
Index
- Did not provide all dividends paid in the time
frame including special and one-off dividends.
- Did not identified franked dividends or dividends
with franking not calculated.
- Total shareholder return is wrong
Review of capital projects – (weighted 30%)
- Did not identify any of the company’s major
capital projects
- Did not identify projects that are underway in the
current period that been rollover in previous
years.
- Provided brief concluding discussion with some
linkage to the risk return trade-off.
- Included some page number of annual report
where the information was obtained from
- No diagrams and tables
- Plenty of irrelevant material
Review and Evidence of listed risks– (weighted 40%)
- Showed evidence of the potential impact of the external risk
on the company
- Did not provided clear reasoning and evidence that your
company is more susceptible to the risks than competitors
- Did not showed the past impact of this external risk on the
company
- Appropriate use of graphs and charts
Review of shareholder vs market returns – (weighted 30%)
- Correctly calculated return of the All-Ordinaries Index
- Did not provide all dividends paid in the time frame
including special and one-off dividends.
- Did not identified franked dividends or dividends with
franking not calculated.
- Correctly calculated total shareholder return
Review of capital projects – (weighted 30%)
- Partially identified some of the company’s major capital
projects and provided brief discussion on the description,
amount and duration of the project.
- Did not identify projects that are underway in the current
period that been rollover in previous years.
- Provided brief concluding discussion with some linkage to
the risk return trade-off.
- Included page number of annual report where the
information was obtained from
- Very few diagrams and tables
- Contained some irrelevant material
Review and Evidence of listed risks– (weighted 40%)
- Showed evidence of the potential impact of the
external risk on the company
- Provided clear reasoning and evidence that your
company is more susceptible to the risks than
competitors
- Showed the past impact of this external risk on
the company
- Appropriate use of graphs and charts
Review of shareholder vs market returns – (weighted 30%)
- Correctly calculated return of the All-Ordinaries
Index
- Provided all dividends paid in the time frame
including special and one-off dividends.
- Correctly identified franked dividends or correctly
calculate dividends with franking.
- Correctly calculated total shareholder return
Review of capital projects – (weighted 30%)
- Identified all the company’s major capital projects
and provided an in-depth discussion on the
description, amount and duration of the project.
- Identify projects that are underway in the current
period that been rollover in previous years.
- Presented a concluding discussion with a strong
linkage to the risk return trade-off, examining past
and current projects
- Included page number of annual report where the
information was obtained from
- Appropriate use of diagrams and tables
- Contained no irrelevant material
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Cost of CAPM calculations – (weighted 25%)
capital 40% - Calculated CAPM wrongly
- Did not adjust Rm if it was needed
- Table not provided
- DGM calculation was wrong
- Used negative g
- Assumption used in calculations are not provided
Selection / Justification of Re – (weighted 25%)
- Evidence of research into the past events and
volatility not provided
- Provided clear evidence of research into the
dividend payout policy
- Provided a compelling reason for the choice of
calculation method
- Appropriate use of graphs and charts
Calculation of Rd – (weighted 25%)
- Identified all long-term borrowings for CAPEX.
- No analysis of the maturity, security, and variability of each
instrument.
- Incorrect base rate.
- Margin not applied
- Company’s debt mandate or restrictions not mentionoed
WACC calculation and analysis– (weighted 25%)
- Did not discuss whether you used CAPM or
DGM model
- Did not make any comment on the Rd Vs Re
- Did not correctly calculate WACC
- Did not comment on WACC (how it fitted with your
observations with the capital projects)
- Reproduced substantial sections of annual report, websites,
commercial reports
- Did not show full workings
- Used numbers from websites/research houses/analysts’ reports
instead of the annual report
- Did not include page number of annual report where the
information was obtained from
- Contained irrelevant material
CAPM calculations – (weighted 25%)
- Calculated CAPM partially correct
- Did not show steps taken to derive at adjusted Rm
if used
- Information is summarised in a table format but
not entirely correct
- DGM calculation was partially correct
- Did not show steps taken to address negative g if
present
- Assumption used in calculations are not provided
Selection / Justification of Re – (weighted 25%)
- Some evidence of research into the past events and volatility is
provided
- Provided clear evidence of research into the dividend payout
policy
- Provided a compelling reason for the choice of calculation
method
- Appropriate use of graphs and charts
Calculation of Rd – (weighted 25%)
- Did not identify all long-term borrowings for
CAPEX.
- Did not provide analysis into the maturity,
security, and variability of each instrument.
- Correct base rate.
- Showed correct steps for applying a margin to
each loan instrument.
- Provided clear evidence of research to justify the
margins applied.
- Provided evidence of research into the company’s
debt mandate or restrictions
WACC calculation and analysis– (weighted 25%)
- Gave an discussion whether you used CAPM or
DGM model
- Commented on the Rd Vs Re
- Mostly calculated the correct WACC
- Commented on WACC (how it fitted with your
observations with the capital projects)
- Showed full workings
- Used majority of the numbers from the company’s
annual report
- Provided an argument to link the WACC to company
projects/investments
- Contained no irrelevant material
CAPM and DGM calculations – (weighted 25%)
- Calculated CAPM correctly
- Showed steps taken to derive at adjusted Rm if
used
- Information is correctly summarised in a table
format
- DGM calculation was correct
- Showed steps taken to address negative g if
present
- Provide clear assumptions used in calculations
Selection / Justification of Re – (weighted 25%)
- Provided clear evidence of research into the past events and
volatility.
- Provided clear evidence of research into the dividend payout
policy.
- Provided a compelling reason for the choice of calculation
method.
- Appropriate use of graphs and charts
Calculation of Rd – (weighted 25%)
- Identified all long-term borrowings for CAPEX.
- Provided analysis into the maturity, security and
variability of each instrument.
- Correct base rate.
- Showed correct steps for applying a margin to each loan
instrument.
- Provided clear evidence of research to justify the margins
applied.
- Provided evidence of research into the company’s debt
mandate or restrictions
WACC calculation and analysis– (weighted 25%)
- Calculated WACC with clear workings
- Succinctly discussed the WACC and how it
pertains to the market’s reaction when the capital
projects were announced
- Provided clear analysis of the impact of the
WACC on the company’s current projects
- Clearly provided the assumptions used in your
discussion
- Included page number of annual report where the
information was obtained from
- Contained no irrelevant material
Page 16 of 17
FSA 30% Calculations– (weighted 30%)
- Identified variables and calculated less than 4
ratios correctly.
- Did not provide page numbers or footnotes on
where the figures originated from
- Conducted a Du Pont analysis and provided a
robust discussion on the company’s ROA and
ROE
- Presented the comparison with Morningstar and
provided reason of variation (when appropriate)
- Showed clear evidence of critical thinking and
research
Time series analysis – (weighed 35%)
- No specific events, actions or decisions of company identified
and discussed
- Provided some discussion on challenges or areas that the
company should focus on
- No evidence of critical thinking and research
Cross-sectional analysis – (weighted 35%)
- Identified only 1-2 peer with no discussion on selection.
- Only reported but did not compare ratios of peer.
- Did not identify any events, actions or decisions
of peers that can be used as logical explanation of
the variation in performance.
- Showed clear evidence of critical thinking and
research
Calculations – (weighted 30%)
- Identified variables and calculated 4-5 ratios
correctly.
- Provided some page numbers or footnotes on
where the figures originated from
- Conducted a Du Pont analysis and provided a
robust discussion on the company’s ROA and
ROE
- Presented the comparison with Morningstar and
provided reason of variation (when appropriate)
- Showed clear evidence of critical thinking and
research
Time series analysis – (weighed 35%)
- 1-2 specific events, actions or decisions of company identified
and thoroughly discussed
- Provided a thorough analysis and discussion on challenges or
areas that the company should focus on
- Showed clear evidence of critical thinking and research
Cross-sectional analysis – (weighted 35%)
- Identified 1-2 peers and did not provide
discussion justifying your selection of companies
as peer / comparable / competitor.
- Reported and compared 2-3 ratios of peer.
- Identified and discussed only 1 specific event,
actions or decisions of peers that can be used as
logical explanation of the variation in
performance.
- Showed clear evidence of critical thinking and
research
End of Assessment Booklet
Calculations – (weighted 30%)
- Identified variables and calculated 6 ratios correctly
- Provided page numbers or footnotes on where the
figures originated from
- Conducted a Du Pont analysis and provided a robust
discussion on the company’s ROA and ROE
- Presented the comparison with Morningstar and
provided reason of variation (when appropriate)
- Showed clear evidence of critical thinking and
research
Time series analysis – (weighed 35%)
- 3 specific events, actions or decisions of company
identified and thoroughly discussed
- Provided a thorough analysis and discussion on
challenges or areas that the company should focus
on
- Showed clear evidence of critical thinking and
research
Cross-sectional analysis – (weighted 35%)
- Identified 2-3 peers correctly and provided a short
discussion justifying your selection of companies
as peer / comparable / competitor.
- Reported and compared 2-3 ratios of peer.
- Identified and discussed 2 - 3 specific events, actions
or decisions of peers that can be used as logical
explanation of the variation in performance.
- Showed clear evidence of critical thinking and
research
Page 17 of 17