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In groups of 3 - 4, students should choose firstly an industry and secondly two (22)) ASX listed companies in this same industry upon which to undertake a fundamental analysis. Fundamental Analysis...

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In groups of 3 - 4, students should choose firstly an industry and secondly two (22)) ASX listed companies in this same industry upon which to undertake a fundamental analysis. Fundamental Analysis seeks to identify factors that are likely to influence directional changes in the value of a company and hence its share price. These factors may be macro or micro in context. Requirements. The assignment comprises two related sections: a)) Conduct a Top Down analysis of the overall economic environment and consider how forecast changes in economic fundamentals will impact on the performances of companies in the industry your group has chosen. Consider questions including, but not limited to: What is the current interest rate?? What is the current value of the $AAUD?? What is current GDP? What is the inflation rate?? What business cycle is the economy currently operating in?? b)) Conduct a Bottom Up analysis of companies’’ current financial situation. Consider accounting ratios and measures of a firm’s performance, how these needs to be compared to the industry and company history, All of the required information for calculation and often the actual ratio//number can be found on various websites on the internet. http:////www.investsmart.com.au// Note: When your group is performing the fundamental analysis take a less is more approach. Select a few key performance measures then define each measure; explain what the measure is supposed to show and then what it is showing for the industry//your companies. Refer to both your textbook and information available on the internet. This assignment involves research to finding the information and then analysing this resulting information. When writing the report, imagine that your audience are people that know nothing about finance or the financial markets. At each stages, you will need to carefully explain what do are analysing and why. Do not think that just because your lecturer will know what this ratio means that you do not have to define it. You should also give a brief introduction of the industry and the history, mission statement of your chosen companies. Your paper should conclude with a summary of your findings and recommendations for each of your companies. Word length is 25 00 (++// - 10%%)).
Answered Same Day May 19, 2020

Solution

Abr Writing answered on May 24 2020
142 Votes
Introduction
There are two types of approaches for the financial analysis which are used by analyst worldwide. The first approach is top down approach which involves analysis from the topmost level to the bottom-most level. The top-down approach initially involves the analysis of the macroeconomic scenario in the country, after the Macro Economic scenario the analyst then drill down to the various industries and factors which are performing well and once they have analyzed industries and sectors therefore the drill down to the individual companies and analyze them.
The second approach is the bottom-up approach in the bottom up approach financial analyst usually select certain high performing stocks and then compare their financial performances with each other.  In this discussion we will consider both the top down and bottom-up approach. Bierman Jr, H., & Smidt, S. (2012)
 
Top-Down analysis
Australia is one of the developed countries in the world and it is considered as the largest mixed market among the economies of the world. Australia has Gross Domestic Product of 1.69 Australian dollars as of 2017and 1.379 trillion US dollars as of 2017. Australia is considered as the second wealthiest country in terms of wealth for adult the country only legs behind the sizzling. The total wealth of Australia is 8.9 trillion Australian dollars. Bierman Jr, H., & Smidt, S. (2012)
Australia is 14th largest economy by the nominal GDP and 20th largest economy by purchasing power parity adjusted Gross Domestic Product. Australia is 25th largest exporter and 20th largest importer of the goods. Australia has a record of longest uninte
upted GDP growth in the developed countries as of March 2017.
Key economic indicators
The first factor which is used to analyse the key economic indicators of an economy is Gross Domestic Product growth GDP growth is considered as one of the primary factors to assess the performance of the economy. The GDP growth of Australia is cu
ently 2.8 % as calculated at your on your basis, despite the decline of the commodity prices the growth is only slightly below the expected trends. 
Second most important factor which impacts the performance of the economy is the retail trade the growth in the retail trade has been 3.9% on year on year basis this growth has been derived by the strong performances of certain department stores and other household goods including the retailing so stop the growth in the given three sectors which involves house goods, retailing and department stores have formed the basis for high growth in the retail trade.
The third factor which influences the economy is manufacturing index in the GDP, therefore, the performance of the manufacturing sector has a significant effect on the overall performance of the economy. In case of Australia the manufacturing index has slightly declined but there is a forecast which states that the manufacturing sector is bound to increase due to several investments is undertaken in the sector for the expansion and this expansion in the manufacturing sector is further aided by the decline and Australian dollars which has improved the export of the country. Bierman Jr, H., & Smidt, S. (2012)
IV macroeconomic factors which influence the economy of the country is the business investment. Business investment is the amount of money invested in the existing businesses in order to grow them. The growth of the existing business for the leads to the growth of the economy. In the cu
ent year, the business investment in Australia has declined by 20% a year on year basis the main reason for the decline in the business investment is the cu
ent resource boom in the Australia where the majority of the investment is directed towards the resources. In any economy
V economic factors are the unemployment rate unemployment rate is one of the major economic as well as the political factors. The unemployment rate in Australia has dropped to 5.8 % as of the cu
ent year this decline in the unemployment rate has been mainly due to the new full-time and part-time jobs created in the economy. The cu
ent Outlook for the unemployment rate remains neutral but the positive impact of the unemployment rate indicates that the economy of Australia is going to perform well in the near future.
V factor which is a key indicator in analyzing the performance of the economy is the inflation rate inflation rate measures the increase in the consumer prices inflation rate of Australia is cu
ently below the target of Reserve Bank of Australia which is in the range of 2 to 3%.
6 factor in analyzing the performance of the economy is the exchange rate the exchange rate of Australia has slightly appreciated in the past 3 months and is cu
ently pack that 0.75 USD. The exchange rate is expected to continue the upward Trend in the near future.
Important Sectors
We have analyzed important factors in the Australia 1st sector we have analyzed is the banking sector the banking sector in...
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