1.Find a PROFIT related announcement occurring after 1^st May 2020.

Do not use.

Mergers, take-overs or take-over defences

Share issues/splits or bonus issues

Dividend announcements

General COVID conditions

Suggested Sources for Profit Announcement

Newspaper data base (see Library Electronic Resources) and select Factiva (you need to go via the Library webpage because this is a subscription service and the University is a member). You can search the financial press in Australia using key words to find relevant profit articles.

The Australian Securities Exchange (ASX) site, www.asx.com.au

Current financial press such as the Financial Review or The Australian.

You can also find additional data on you chosen company's website.

Continuous disclosure.

2.Select at least one competitor.

If you are unsure about the competitors for your company do a web search. You could go to the ASX website (as above) and look at the various industry sectors and/or find the competitors for a company.

3.Gather the following data series:

Closing Share Price for your company

Closing Share price for Major Competitor - at least one, two preferred

Market Index - All Ordinaries Index

Collect a period of three weeks both sides of the announcement.You could use three weeks before and two weeks after the announcement if it is very recent. (You can access historical share prices from yahoo.com.au, or http://www.comsec.com.au/).

4.Using an Excel spreadsheet (see template below) calculate the return (percentage change in price P or the index M) for all three data series (technically the return is [(P1-P0+ D1)/P0]*100 but it is unlikely you will find a dividend payment in your series) as follows:

RetDay1 = [(P1-P0)/P0]*100

And

Mar RetDay1 = [(M1-M0)/M0]*100

5.Graph your results. You might find the results more informative if you were to plot the Cumulative Residuals for your company. That is, subtract the return on the market index from your company's return. Then get a cumulative total for this difference (we call this difference the residual because it is what is left after we take out the effects of the whole market).Thus the residuals should be calculated as follows:

Cum ResDay 1 =RetDay1- Mar RetDay1

Cum ResDay 2 =RetDay2- Mar RetDay2+ Cum ResDay 1

Cum ResDay3 =RetDay3- Mar RetDay3+ Cum ResDay2

If the changes you see in your company's returns are random then the cumulative residuals should end up at about zero.If the information disclosure has an effect, the cumulative residuals should be positive or negative depending on whether the information was good news or bad news.

6.Write a business report that presents at LEAST the following:

a)A half page executive summary (prior to the main report);

b)The objective of the report;

c)The company and its major industry;

d)The announcement, its date and manner of release;

e)The expected impact of the announcement on the share price (up or down, good news - bad news) - you must justify your expectation. Be sure to put what YOU THOUGHT should happen and not a rationalisation of what did happen;

f)What do you think actually happened based on your analysis? Explain the results by interpreting the cumulative residual graph (use other announcements for the company and industry from the same period to support your analysis).

g)Make sure you integrate your graphs into the body of your report with appropriate scales and labels on the graphs.

h)Attach a copy of the article which displays the date of the article.

i)MAXIMUM OF 1500 WORDS (EXCLUDING Attachments)

It is suggested that you use the headings referred to in the grade sheet:

Executive Summary

Company and Industry

Announcement

Expectation

Actual Impact (Analysis of Residuals)

Conclusion

Sample Spreadsheet Set Up

1.Find a PROFIT related announcement occurring after 1^st May 2020.

Do not use.

Mergers, take-overs or take-over defences

Share issues/splits or bonus issues

Dividend announcements

General COVID conditions

Suggested Sources for Profit Announcement

Newspaper data base (see Library Electronic Resources) and select Factiva (you need to go via the Library webpage because this is a subscription service and the University is a member). You can search the financial press in Australia using key words to find relevant profit articles.

The Australian Securities Exchange (ASX) site, www.asx.com.au

Current financial press such as the Financial Review or The Australian.

You can also find additional data on you chosen company's website.

Continuous disclosure.

2.Select at least one competitor.

If you are unsure about the competitors for your company do a web search. You could go to the ASX website (as above) and look at the various industry sectors and/or find the competitors for a company.

3.Gather the following data series:

Closing Share Price for your company

Closing Share price for Major Competitor - at least one, two preferred

Market Index - All Ordinaries Index

Collect a period of three weeks both sides of the announcement.You could use three weeks before and two weeks after the announcement if it is very recent. (You can access historical share prices from yahoo.com.au, or http://www.comsec.com.au/).

4.Using an Excel spreadsheet (see template below) calculate the return (percentage change in price P or the index M) for all three data series (technically the return is [(P1-P0+ D1)/P0]*100 but it is unlikely you will find a dividend payment in your series) as follows:

RetDay1 = [(P1-P0)/P0]*100

And

Mar RetDay1 = [(M1-M0)/M0]*100

5.Graph your results. You might find the results more informative if you were to plot the Cumulative Residuals for your company. That is, subtract the return on the market index from your company's return. Then get a cumulative total for this difference (we call this difference the residual because it is what is left after we take out the effects of the whole market).Thus the residuals should be calculated as follows:

Cum ResDay 1 =RetDay1- Mar RetDay1

Cum ResDay 2 =RetDay2- Mar RetDay2+ Cum ResDay 1

Cum ResDay3 =RetDay3- Mar RetDay3+ Cum ResDay2

If the changes you see in your company's returns are random then the cumulative residuals should end up at about zero.If the information disclosure has an effect, the cumulative residuals should be positive or negative depending on whether the information was good news or bad news.

6.Write a business report that presents at LEAST the following:

a)A half page executive summary (prior to the main report);

b)The objective of the report;

c)The company and its major industry;

d)The announcement, its date and manner of release;

e)The expected impact of the announcement on the share price (up or down, good news - bad news) - you must justify your expectation. Be sure to put what YOU THOUGHT should happen and not a rationalisation of what did happen;

f)What do you think actually happened based on your analysis? Explain the results by interpreting the cumulative residual graph (use other announcements for the company and industry from the same period to support your analysis).

g)Make sure you integrate your graphs into the body of your report with appropriate scales and labels on the graphs.

h)Attach a copy of the article which displays the date of the article.

i)MAXIMUM OF 1500 WORDS (EXCLUDING Attachments)

It is suggested that you use the headings referred to in the grade sheet:

Executive Summary

Company and Industry

Announcement

Expectation

Actual Impact (Analysis of Residuals)

Conclusion

fxfcsz