Topic:
Choose one of the companies from the industrial sector listed on the ASX and prepare a credit rating report for the company. Please write your selected company name, your name and your student ID on your report’s front page. The current list of industrial companies can be found at the following link: https://www.listcorp.com/asx/sectors/industrials. If your chosen company is not on the list, your mark for this assignment will be zero.
Instructions:
- In this assignment, you must conduct a capacity analysis and the Altman Z score analysis for the company’s overall creditworthiness. Your capacity analysis should include the following three parts: a) Industry structure analysis
- Industry fundamental analysis
- Ratio analysis
- In the part of ratio analysis, you are required to compute the eight historical financial ratios, as shown in the table below. You should also forecast these ratios for the next year, compare your predicted ratios to the ratios shown below in the table, and recommend an appropriate credit rating I recommend using at least the past three years’ financial data for your analysis.
- You should make your forecast based on the company’s fundamental information and the industry report obtained from databases such as DatAnalysis Premium and IBISWorld.
- You need to choose an appropriate Z score model to compute the current Z score and forecast the Z score for the next year. You should also indicate the company’s financial status based on your forecasted Z score.
Note: To make your result comparable to the debt ratios shown in the last two columns, please use net debt for your calculation. Net debt is a company’s interest-bearing liabilities minus cash or cash equivalents.
Reference Materials:
| ▪ | The lecture slides (Lecture 6). |
| ▪ | Databases (see the resources uploaded in LMS), such as DatAnalysis Premium and IBISWorld. |
| ▪ | Financial statements and other information provided by the company. |
| ▪ | Other reliable Internet resources – e.g. ratings agencies, stock market analysts. |
| ▪ | Newspaper reports. |
| ▪ | Any other publicly available and reliable information. |
Format:
Typed in 12-point font using Times or Times New Roman at 1.5 or double spacing. Left and right margins should be set to 3.5 cm or 1.5 inches. Pages should be numbered consecutively. Figures and tables should be presented in a professional way. You should cite all the references (i.e. the sources of the information) correctly in your text and list all the references at the end of your report.
Word Limit:
2000 words. This is a guide, and there will not be an explicit penalty for exceeding this word limit. Assignments with insufficient information (i.e. well under 2000 words) and assignments that are unnecessarily long will receive fewer marks within the marking scheme.
Marking scheme
| Introduction | 5% |
| Industry structure analysis | 10% |
| Industry fundamental analysis | 10% |
| Ratio analysis | 40% |
| Altman Z score | 20% |
| Overall presentation | 15% |
Marks:
The assignment will be marked out of 100 and comprise 30% of your final grade.
Submission:
Students must submit the assignment via Turnitin in the LMS. Email submissions will not be accepted. Please write your name and ID on the front page of your assignment.
Penalties for late submission:
Please refer to the subject learning guide.
Plagiarism
Plagiarism will be treated very seriously. If you are found guilty of plagiarism, you will get zero for the assignment, and you will be charged with Academic Misconduct, which has serious penalties. If you plagiarise, you will be caught.
Rubric:
| < 50% | 50% – 64% | 65% – 79% | 80% – 100% | |
| Content and argument
(70%) |
Present an unclear argument for the recommendation which is not supported by logical and clear analysis. Supporting information is irrelevant and inaccurate. | Present an appropriate argument for the recommendation which is supported by some information
and analysis throughout the presentation. |
Present a relatively strong argument for the
recommendation which is supported by sufficient information and reasonably clear analysis throughout the presentation. |
Present a compelling argument for the recommendation which is supported
by logically sequenced information and clear analysis throughout the presentation. |
| Visual aids (30%) | Use irrelevant visual aids to support key points and engage the audience. Slides contain too much information and hard to read. | Use limited or sometimes
distracting visual aids to support key points and engage the audience. |
Use relevant visual aids to enhance key points and engage the audience. | Use appealing visual aids to enhance key points and engage the audience. |
