This part of the project requires you to conduct financial statement analysis of Wesfarmers Limited (Stock Code: WES).
1. What is the industry in which your company belongs to? What is the view of the management of the company about the future outlook and performance of the company? [3 Marks] 2. Identify two (2) pieces of firm-specific information not included in the principal financial statements that you think would be important to someone considering whether to invest in your company. Explain your reasons for believing that this information would be important in making an investment decision. [4 Marks] 3. Assume that, as a credit analyst, you are evaluating the company. Use the most appropriate ratios for the most recent year from the annual report and evaluate whether one should provide loan to this company. [Use at least 4 ratios). [6 Marks] 4. Assume that you want to buy stock of this company. Use the most appropriate efficiency and profitability ratios for the last financial year from the annual report and use these data to evaluate whether this company is a suitable candidate for investment purpose. (Use at least 4 ratios for each category). [8 Marks] 5. Assume that you are also considering to invest in the stock of BHP Billiton. You have limited fund to invest and therefore, you can invest in either of the company (BHP Billiton or your allocated company). Compare your performance (i.e. efficiency and profitability), with those of BHP Billiton. If you were making a decision to invest in one of the two companies, which company would you choose? Discuss. [In evaluating and comparing the companies, use appropriate ratios and other analysis. Provide clear justification as to why you believe your approach to evaluation is appropriate for investment decision purpose]. [4 marks] 1. What is the industry in which your company belongs to? What is the view of the management of the company about the future outlook and performance of the company? [3 Marks] 2. Identify two (2) pieces of firm-specific information not included in the principal financial statements that you think would be important to someone considering whether to invest in your company. Explain your reasons for believing that this information would be important in making an investment decision. [4 Marks] 3. Assume that, as a credit analyst, you are evaluating the company. Use the most appropriate ratios for the most recent year from the annual report and evaluate whether one should provide loan to this company. [Use at least 4 ratios). [6 Marks] 4. Assume that you want to buy stock of this company. Use the most appropriate efficiency and profitability ratios for the last financial year from the annual report and use these data to evaluate whether this company is a suitable candidate for investment purpose. (Use at least 4 ratios for each category). [8 Marks] 5. Assume that you are also considering to invest in the stock of BHP Billiton. You have limited fund to invest and therefore, you can invest in either of the company (BHP Billiton or your allocated company). Compare your performance (i.e. efficiency and profitability), with those of BHP Billiton. If you were making a decision to invest in one of the two companies, which company would you choose? Discuss. [In evaluating and comparing the companies, use appropriate ratios and other analysis. Provide clear justification as to why you believe your approach to evaluation is appropriate for investment decision purpose]. [4 marks]
