You are a financial analyst for YADRA Investment Ltd. You are required to analyze Communication Fiji Limited firm listed on the South Pacific Stock Exchange (SPSE). You are then required to recommend whether or not to invest in the firm based on your analysis.

Assignment Details

The assignment provides an opportunity to get some practical experience applying corporate finance principles to real firms. In the process, you will get a chance to

 Evaluate the risk profile of the firm and examine the sources of risk.

 Analyze the firm’s stockholders.

 Examine the firm’s investment choices.

The Firm

 The firm must be listed on the South Pacific Stock Exchange

(https://www.spx.com.fj/Investing/Already-a-Shareholder/Listed-Entity-Financials)

 Select a firm that has plenty of publically available information with annual reports

published for the year 2021.

 Do not select a firm in the financial services industry.

 Face-to-face: Do not commence your work until your listed firm is confirmed by your

tutor.

 Blended Mode: Company signup will be conducted on Moodle in Week 3. One group per company.

Objectives of Assessment Task

 Develop critical and analytical skills relating to the topic areas addressed in the course

 Develop various research synthesizing skills

 Communicate clearly and effectively

Questions to Guide your Analysis

1. Firm Analysis

 Type of business and nature of operation

 Who is the average investor in this firm (Individual or pension fund, taxable or tax

exempt, small or large, domestic or foreign)

 Is this company where there is a separation between management and ownership? If so, is there evidence of conflict of interest between management and shareholders?

 What were the COVID-19 pandemic effects on financial results and how detailed have

the effects been disclosed in the annual report?

2. Risk and Performance

 What is the risk profile of your firm? How much overall risk is there in this firm? Where is this risk coming from? How is the risk profile changing?

 Based on its stock price, do you think this company has performed well over the past

three years? Why?

3. The following specific industry norms are available in SPSE and used as benchmarks in this analysis:

- Liquidity: Current Ratio

- Leverage: Debt/Equity

- Profitability: Profit Margin, Return on Equity, Return on Assets.

- Market Value: Price/Book value, Price/Earnings, Dividend Yield.

Students will report on how the company performs as compared to the industry norms and where the company stands relative to its competitors in the industry. The company’s weak and/or strong areas of performance must be identified and recommendations for improvement presented. See table 3 below for a sample industry comparative analysis.

Performance Area	Year 2021	Year 2020	Comments
Leverage:
Debt/Equity (%)
Interest Coverage
Liquidity:
Current Ratio
Profitability:
Profit Margin (%)
Return on Assets (%)
Return on Equity (%)
Market Value:
Price/Book Value
Price/Earnings
Dividend Yield (%)

4. Valuation

 Considering the company’s dividends, what growth pattern would you pick for this firm? How long will this growth last?

 Do you think the firm is correctly valued by the market? Why?