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GUIDELINES ASSIGNMENT 2 Latest - GROUP COMPANY ANALYSIS

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GUIDELINES ASSIGNMENT 2 Latest - GROUP COMPANY ANALYSIS

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2024570065
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Course Code: INV536

Course Name: Financial Statement Analysis and Equity Valuation


Semester: October 2024 – February 2025
Group Project: Financial Position, Financial Performance and Financial Stability Analyses

1. Objective of this project:


To develop the skills in analyzing companies’ financial position, financial Performance,
and financial stability/survival of the public listed companies in Malaysia.
2. Guidelines in selecting the companies:
o Choose ONE (1) industry or sector in Malaysian market.
o Select THREE (3) companies within the same industry/sector and sub-sector of the
Public Listed Companies in Bursa Malaysia (the companies must be different from
other groups).
o The companies selected preferably should have more or less the same size (based
on the total asset/total revenue/market capitalization).
o For each company, download the Statement of Financial Position and Statement
of Financial Performance from 2019 to 2023.

3. Guidelines in conducting the analysis:


Task 1: Vertical Analysis – To Measure Financial Position and Financial Performance

Financial Position: Convert the following items into a common-size form:

1) Current assets 2) Current liabilities 3) Total long term debts


Note: Common-size = each item/total assets of respective year

Financial Performance

1) Cost of goods sold 2) Total operating expenses 3) Net profit or income


Note: Index number = (each year item/ base year item) x 100

o Then make a comparison for the changes of each item for the 5 years' period of
respective company. Justify any possible reasons/assumptions for the changes.
Present any graph(s)/ chart(s) to support your answers.
Hint: Company A from 2019 to 2023
Company B from 2019 to 2023
Company C from 2019 to 2023
o Next, conduct an overall comparative analysis – analyze overall company’s financial
position and financial performance. Focus on the significant items (large %). Present
any graph(s)/ chart(s) to support your answers.
Hint: Compare Company A, Company B and Company C for the 5 years' period
o Draw some conclusions which company performs the best and the worst overall
in terms of financial position and financial performance.

Task 2: Company Analysis-To assess the company financial stability (FS) & survival
o Calculate the following ratios for each year (2019 to 2023) of the respective companies:
1) Working capital / Total assets (X1)
2) Retained earnings / Total assets (X2)
3) EBIT / Total assets (X3)
4) Market capitalization / Total liabilities (X4)
5) Sales / Total assets
o Next calculate the Z-Score for every year of the respective company by putting in the above ratios
into the following equation:
Z-score = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
o Then, identify the respective companies’ financial stability & survival based on the following zones:
Safe Zone: Z-score > 2.99 (High FS & Survival)
Grey Zone: > 1.81 < Z-score < 2.99 EMS (Moderate FS & Survival)
Distress Zone: <1.81 Z-score (Low FS & Survival)
o Compare and analyze the FS & survivability of the respective company and overall.
o Present any graph/ chart to support your answers and analysis.
o Conclude and recommend which company that you are confident with/ advise others to invest
in based on the trend of their FS & survivability.
4. Presentations
o Students (in a group of FOUR to FIVE) are required to deliver either oral or
video presentations (at respective lecturer’s discretion).
o Duration of presentation is within +/- 15 minutes.
o Time to present will be discussed with respective lecturer.

5. Assignment Format
INV536
Cover Sheet/Page Title of Project, Student Name & ID, Course Code & Name,
Class Group, Semester
Font Type Arial, 1.15 spacing
Font Size 11
References Minimum 5 sources (journal articles/reports/news/website)
References Format American Psychological Association (APA) latest Format
Pages Between 15 to 20 pages (excluding the Appendix)

6. Deadline
o Written report should be submitted during the Week 12 (or at lecturer’s discretion).

7. Assignment Content Guidelines


o Table of Contents
o Chapter 1:
1.1 Introduction to Project Assignment
1.2 Background of companies (briefly)

o Chapter 2: Measuring and Analyzing the Company's Financial Position and Financial
Performance (Vertical: Common-Size Analysis & Horizontal: Index Number Trend
Analysis)
o 2.1 Company A Analysis
o 2.2 Company B Analysis
o 2.3 Company C Analysis
o 2.4 Overall Comparative Analysis
o 2.5 Conclusion
o Chapter 3: Assessing the Company’s Survival/ Financial Stability
o 3.1 Analysis of Company A
o 3.2 Analysis of Company B
o 3.3 Analysis of Company C
o 3.3 Overall Comparative Analysis
o 3.4 Conclusion
o Chapter 4: Overall Conclusion and Recommendation for the Companies'
Improvement(s)
o References (APA format)
o Appendix (the copies of companies’ financial statements, formulas &
calculation)

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