UTS_JB HI-FI LTD PROSPECTIVE ANALYSIS AND MANAGERS CONSULTANT REPORT

UTS_JB HI-FI LTD PROSPECTIVE ANALYSIS AND MANAGERS CONSULTANT REPORT

Paper details:

Assessment task 2: Assignment (Individual)
Objective(s): This addresses subject learning objective(s):
1, 2 and 3
This addresses program learning objectives(s):
1.1, 1.2, 2.1 and 2.2
Weight: 40%
Task: Individual Assignment (40 Marks)
Due: Beginning of Lecture 11
Using the company and analysis from your group assignment, provide the following:
1. Reformatted Financial Statements and Financial Analysis (10 marks)
Reformat at least the last 5 years of your company’s financial statements. Use ratio analysis and
cash flow
analysis to evaluate the current and past performance of the business and assess its sustainability.
2. Prospective Analysis (15 marks)
Forecast future financial performance. Use the four valuation models outlined in class to produce an
estimate of
firm value, and compare to stock price. Perform sensitivity analysis and discuss the results.
2. Application (15 marks)
Using your sensitivity analysis, and as a potential management consultant to your chosen firm,
provide a
discussion as to the possible opportunities for improvement, and potential challenges for your firm.
Provide
remedies for these concerns. You should be quite specific in any recommendations you make.
Length: The project write-up should be a readily comprehensible and condensed report on your work
(i.e., not a detailed
compilation of all the various valuation scenarios you considered, and all the information you
collected). Your
write-up is limited to 10 pages of text and 10 pages of supporting material. Please use a minimum
font size of 12
and 2.5cm margins. ( Note: If you choose to use double spacing for text, then the write-up extends to
eight pages).
You must provide a hard copy to be handed in as directed as well as a soft copy submitted via UTS
Online. UTS
reserves the right to run student assignments through plagiarism detection software. If you do not
submit
both copies (soft copy and hard copy) the assignment will be deemed as not submitted and you will
receive a fail grade.For each day (or part day) that your assignment is late, you will lose 10% of
the raw
assignment mark.
Due: See Further information.
Further
information:
Individual Assignment (40 Marks)
Due: Beginning of Lecture 11

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Individual Assignment (40 Marks)
Due: Beginning of Lecture 11
Using the company and analysis from your group assignment, provide the following:
1. Reformatted Financial Statements and Financial Analysis (10 marks)
Reformat at least the last 5 years of your company’s financial statements. Use ratio analysis
and cash flow analysis to evaluate the current and past performance of the business and
assess its sustainability.
1. Reformat at least 5 years
2. Prepare 4 years of ratios
3. Prepare risk ratios for cash flow analysis
4. WRITE UP – what happened AND WHY the ratios/ cash flow changed
2. Prospective Analysis (15 marks)
Forecast future financial performance. Use the four valuation models outlined in class to
produce an estimate of firm value, and compare to stock price. Perform sensitivity analysis
and discuss the results.
1. Prepare your forecasts and write up the reasons for your forecast assumptions
2. Prepare your valuations and write up just the $ answers to your 4 models, as well
as include share price on the date of your valuation (the date of your last set of
reformatted financial statements (table 1)
3. For all of your forecasting and cost of capital assumptions1
, write up your reasons
for your optimistic and pessimistic outcomes (best and worst they ever did in last
5 years perhaps?) and calculate your sensitivity analysis. Only use the AOI model
and Table 2 reports your sensitivity results. Again compare to share price and
discuss your results

1 Sales growth, PM, ATO, cost of debt, dividend yield and cost of capital (firm)
3. Application (15 marks)
Using your sensitivity analysis, and as a potential management consultant to your chosen
firm, provide a discussion as to the possible opportunities for improvement, and potential
challenges for your firm. Provide remedies for these concerns. You should be quite specific
in any recommendations you make.
1. Your sensitivity testing will show you that your firm will be more sensitive to one of:
a. sales growth/cost of capital
b. PM
c. ATO
2. Depending on which of the three above is most important to your firm, come up with
some ideas for specific things that your firm can do. For example, if sales growth
matters don’t just say “increase sales”. You need to come up with creative ideas for
your firm to increase sales. You never know, yours may be the next assignment sent
on to your firm!

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