EDITH COWAN UNIVERSITY
FUNDAMENTALS OF VALUE CREATION IN BUSINESS
SEMESTER 2, 2016
ASSIGNMENT 1 - ACCOUNTING
S TRATEGIC C HANGES AND F IRM P ERFORMANCE
A SSIGNMENT REQUIREMENTS
1. The following is a list of 10 organisations/ companies, one of which will be the
subject of your analysis.
C ODE C OMPANY
BHP BHP Billiton Limited
MQG Macquarie Group Limited
SUN Suncorp Group Limited
WOW Woolworths Limited
ORG Origin Energy Limited
IAG Insurance Australia Group Limited
RHC Ramsay Health Care Limited
CTX Caltex Australia Limited
CCL Coca-cola Amatil Limited
MPL Medibank Private Limited
2. One of these ten companies will be randomly assigned to you for analysis. For this
information, refer to the Excel spread sheet on Blackboard (Bb).
If working in groups, choose only one company from either partner.
3. Find the Excel files on Bb which contain the past 6 years of the financial statements
Download your selected company data file for the analysis.
4. Research about your company. Find all important and relevant information in
company’s annual reports, company’s websites, or newspaper articles, etc.
A SSIGNMENT Q UESTIONS
1. Analyse the behaviour of any three significant items in the income statement for the
period of six years. Discuss whether your organization’s performance relating to these
items appears to be improving, deteriorating, or remaining stable over this period. Explain
why you selected those items and what you recognize as the most relevant strategic
reasons for the trend/s that you have recognized.
Justify your answer.
2. Analyse the behaviour of any three significant items in the balance sheet for the period
of six years. Discuss whether your organization’s performance relating to these items
appears to be improving, deteriorating, or remaining stable over this period. Explain why
you selected those items and what you recognize as the most relevant strategic reasons for
the trend/s that you have recognized.
Justify your answer.
3. Analyse cash flow statements of the last six years and explain any three major
changes which have occurred in relation to investing, financing and/or operating
activities of the business.
Justify your answer.
4. Calculate two relevant ratios under the four chosen ratio categories (profitability,
leverage, solvency, operational efficiency or market ratios) for the period of six years.
Give conclusions for your ratio analyses based on the figures you have derived.
5. Identify any two items not included in (or derived from) the financial statements that
you think would be important to someone considering whether the organization is
performing well. Discuss your reasons for believing that these two items about the
company would be important in making an investment decision.
(H INT : you might want to consider items discussed in other sections in this unit)
• Your assignment should be in the form of business report (please refer to the document
provided). Your report should include:
− an executive summary (not more than 200 words)
− an introduction (not more than 150 words)
− answers to the given questions written in the body paragraphs, with appropriate
headings, subheadings, etc.
− a conclusion (not more than 150 words)
− an appendix with excel data provided for financial statements and relevant
calculations such as:
a) Horizontal and/or vertical analysis (which outcome should support choice of
discussed items in questions 1, 2 and 3)
b) Ratio analysis (including formulas and calculations)
Use Microsoft Excel to perform the financial statement analysis.
• Your analysis should be limited to a maximum of seven (7) pages and a minimum of five
(5) pages. This is equivalent to no more than 1,800 words (not including the cover page
• Write as if you are a management advisor preparing advice for a client (who is the
manager of the context company).
• Give your report an adequate title and plan appropriate headings for easy reading –
Consider your audience when construction your report.
• The assignment must be prepared using a word processor on A4 paper. Make sure you
choose a legible font face and size (e.g. Times New Roman 12 or Arial 11 would be
sufficient) and double-spaced.
• All graphs (highly recommended for this analysis) should be drawn with the aid of a
suitable software tool or package and appropriately referenced.
• Handwritten assignments will not be accepted.
S UBMISSION R EQUIREMENTS
• Due by Monday 19 th September by 8am via Turnitin.
• Should include the ECU assignment cover page (provided on our BB website).
Note: if an assignment cover sheet is not included your assignment will not be graded.
• The assignment must be submitted
− as one document
− in one copy by a group leader (if completed in a group).
• If you complete the assignment in a group you should:
− submit in person (on campus students) or via email (external students) a completed
and signed FBL5030 assignment contract before starting your teamwork
− submit an assignment peer review form in person (on campus students) or via email
(external students) after submission of the assignment.