Template for Assessment 3 – Final Report Delete all information in red italics before submitting the report

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Template for Assessment 3 – Final Report

Delete all information in red italics before submitting the report.

TASK: You are an investment analyst preparing a report for a potential investor – should they buy or not buy shares in a particular listed company? Analyse the listed NZ stock exchange (NZX) company allocated to you in workshops, and write a report, using the template sections to guide you.

Support your discussion with references to appropriate literature sources. Provide in-text citations and a reference list, using APA 7^th edition style (https://aut.ac.nz.libguides.com/APA7th). The library guide will help you with this, along with videos on APA referencing and paraphrasing in the Assessment tab on Blackboard.

Remember this is an INDIVIDUAL assessment, however you will be working in groups in workshops to help collect the information you will need to complete the assessment.

Write in the 3^rd person (using professional, business-appropriate language)

Title Page (be as creative as you like!)

• Include Student Name and ID, also in header or footer
• Name of company investigated (allocated NZX company)
• Date of submission
• Word count: 1,500 words from the beginning of Introduction to end of Conclusions and Recommendations

Table of Contents (use Word to create this – new page required)

Introduction

• Introduce the company being investigated with a brief background
• Steel & Tube was formed in 1953 and listed in 1967. It is now one of New Zealand's leading providers of steel solutions, allowing access to the widest range of steel products in the market, through its nationwide network of distribution centers. The company distributes and processes a range of steel products and operates through two divisions - Distribution and Infrastructure - and offers an end-to-end customer experience, advising, sourcing, and supplying customers with their steel requirements.
  
  The acquisition of complementary businesses over the years has led to Steel & Tube owning a portfolio of strong heritage brands. The company is focused on delivering quality service and products, safely to customers.
  
  Today, Steel & Tube operates in the New Zealand market, primarily in the construction, manufacturing, and rural sectors.

 

• Introduce the purpose of the report

150 WORDS

Discussion

• Financial Performance
  • Comment on the trends shown in the profitability graph in Appendix A. (The graph can also be shown in the main body of your report)
  • Outline ROE: the basic ratio used to assess financial performance
    • Refer to the appendix where you have obtained the ratio
    • Briefly comment on the trends shown by the ratio
  • Use information obtained from relevant sources to explain the trends shown, and any particular peaks or troughs.
  • Make a conclusion about the companies’ financial performance

300 WORDS

 

• Share Price Performance
  • Outline the CURRENT listed price of the company (mention the date you obtained the price) – are their current prices high or low, compared to past price performance?
  • Discuss the share PRICE performance of the company (over the previous 5 years).
    • If you had bought shares 5 years ago and sold them today, what is the holding period return?
    • Refer to the appendix with your share price graph and holding period return (The graph can also be shown in the main body of your report)
  • Detail any events that may have had an impact on the performance of the company (either positive or negative)
  • State how this impacts your investment recommendation
  • Cite at least 2 news media reports to support your discussion (2 minimum to pass (C grad

 

450 words

• Value
  • Compare the market value (capitalisation) of the company to their book value of total equity (also called net assets) using the Market-to-Book ratio.
    • Refer to the appendix where you have obtained the ratio
  • Outline Price-Earnings Ratio: Calculate the P/E ratio for the company
    • Refer to the appendix where you have obtained the ratio.
  • Discuss the M2B and P/E ratios as part of a suite of tools for an analyst – what are they showing for this particular company?
  • Is there a brokers’ recommendation for this company? If so, do you agree?
  • Conclude whether the company appears to be “good value” based on its Market-to-Book ratio AND P/E ratio.

300 words

 

• Topical Issues
  • Choose to discuss either:
    • Non-financial reporting
    • Corporate Governance
    • Intelligent Automation
  • State how this information affects your decision.

150 words

 

Conclusions & Recommendation

• Summarise the main points from your discussion. New information should not be part of the Conclusions section.
• Make a recommendation to the prospective investor
  • You can recommend buying shares, or to not buy shares in the company being investigated
  • Your recommendation must clearly flow from the discussion and conclusions

150 WORDS

 

 

References

• New page required for References
• This title should be centred on the page

• Use APA 7^th edition referencing
• The following should be included in your reference list, if cited
  • Textbook, for definitions, if required
  • NZX.com
  • NZX company research database
  • Annual report of the company
  • Website of the company
  • Any newspaper articles used

Examples only

Craig, G., & Scott, A. (Ed.). (2019). BUSS503 Financial Decision Making for AUT University (Custom e-textbook). Sydney, Australia: Wiley. Custom publication for Faculty of Business, Economics & Law, Auckland University of Technology.

NZX company research. (n.d.). Brokers Forecasts - Hallenstein Glassons. Retrieved from NZX Company research: http://companyresearch.nzx.com.ezproxy.aut.ac.nz/deep_ar/newpage.php?pageid=fcst&default=HLG

 

 

 

Appendices

• New page required for Appendices – should always be after References section
• The following should be included in the appendices (see Appendix template following):
  • Appendix A
    • Profitability graph prepared using Excel
  • Appendix B
    • Holding period return
    • Share price graphs
  • Appendix C
    • ROE ratio
    • Market to book ratio
    • P/E ratio
    • Brokers’ recommendation

 

• Ensure that you reference sources used to obtain this information

 

Appendix A – Financial performance

Example of graph, using Michael Hill International Ltd

 

 

 

 

Return on Equity

Michael Hill International Ltd

	2022	2021	2020	2019	2018
ROE Ratio	23.94%	23.53%	1.99%	9.33%	0.89%

 

 

 

 

 

 

(NZX company research, n.d.)

 

 

 

Appendix B

Holding Period Return

Share Price 14^th September, 2022:            $1.27

Share Price 14^th September, 2017:            $1.23

Return: (1.27 – 1.23)/1.23 = 3.25%

 

Share Price Performance

Example of graph (using Michael Hill International Ltd)

 

 

 

 

(NZX company research, n.d.)

Or

 

 

 

 

(Google Finance, obtained 21^th September, 2022 )

 

 

Appendix C – Finance Ratios

Example of ratios, using Michael Hill International Ltd

 

(NZX company research, n.d.)

Market to Book Ratio

Michael Hill International Ltd

market price (date)	$1.27
market capitalisation	493,166,554
total equity	195,095,000
market to book ratio	2.53

 

(14^th September, 2022)

 

 

Price-Earnings Ratio

Michael Hill International Ltd

market price (date)	$1.27
Profit	$46,712,000
# of shares	388,320,121
EPS	$0.12
P/E ratio	10.56

 

(14^th September, 2022)

(NZX company research, n.d.)

 

Brokers’ recommendation

Not covered