Share market assignment (part 2 & 3) PDF

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VICTORIA UNIVERSITY, SYD SYDNEY NEY SCHOOL OF BUSINESS

BAO1101 Accounting for Decision making

Assi Assiggnme ment: nt: De Decisio cisio cisionn M Maki aki aking ng iinn the Share M Marke arke arkett (Part 2 & 3)

Prepared by: Habib Salem

Student ID: s4627464

Class: Monday, Tuesday, Wednesday (11:30 am to 2:30pm)

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Table of Content Part 2 Company research (Brief description)…………………………………………………………………..3 Graph and share price movement of Woolworths group limited…………………………..4 Graph and share price movement of ASX all Ordinaries…………………………………………5 Evaluation of share price performance…………………………………………………………………..6 Portfolio Gain and Loss…………………………………………………………………………………………..7 Recommendation of the share portfolio…………………………………………………………………7

Part 3 Identification of key financial data ………………………………………………………………………….8 Ratio analysis……………………………………………………………………………………………………9 &10     

Current ratio Debt ratio equity ratio Asset turnover Profit margin



Return on total assets.

Reference………………………………………………………………………………………………………………11 Appendix……………………………………………………………………………………………………....12 to 16 Assessment Declaration…………………………………………………………………………………………17

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Share Market Assignment (Part 2) [Company Company research/Graphs/Investor Information Information] (A)

A Brief Description of Woolworths Group

Products and Services

Woolworths Group Limited works retail locations. It works through Australian Food, Hotels portions, New Zealand Food, BIG W and Endeavour Drinks. The Australian Food portion secures and exchanges nourishment and related items to clients in Australia. It works 1,024 Woolworths grocery stores and Metro stores. It is the second-biggest organization in Australia by income. Discount general product items, Drinks, leisure and hospitality, nourishment and beverages, accommodation, amusement, and gaming are some of the services provided by Woolworths limited group.

Chief Executive Officer

Bradford Banducci

Chief Executive Officer’s Salary

7.7M (AUD$)

Profit and Loss after Tax for the year ending 2019

2759M (AUD$)

Latest Dividend paid –  Dividend per share  Date paid Size of the business by total assets

57C (cents per share) 30/09/19 23,491M (AUD$)

Number of Employees

196,000+

Share Price – 52 week High And Low at the end of trading Monday 24 February 2020

High - 42.97 Low - 42.51

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(B)

(i) Daily Share price movements of Woolworths (24-FEB-2020 to 01-APR2020)

Close

45 40 35 30 25 20 15

10 5

Date 01-Apr-2020 31-Mar-2020 30-Mar-2020 27-Mar-2020 26-Mar-2020 25-Mar-2020 24-Mar-2020 23-Mar-2020 20-Mar-2020 19-Mar-2020 18-Mar-2020 17-Mar-2020 16-Mar-2020 13-Mar-2020 12-Mar-2020 11-Mar-2020 10-Mar-2020 09-Mar-2020 06-Mar-2020 05-Mar-2020 04-Mar-2020 03-Mar-2020 02-Mar-2020 28-Feb-2020 27-Feb-2020 26-Feb-2020 25-Feb-2020 24-Feb-2020

24-Feb-20

25-Feb-20

26-Feb-20

27-Feb-20

28-Feb-20

02-Mar-20

03-Mar-20

04-Mar-20

06-Mar-20 05-Mar-20

10-Mar-20 09-Mar-20

11-Mar-20

12-Mar-20

16-Mar-20

13-Mar-20

17-Mar-20

18-Mar-20

19-Mar-20

20-Mar-20

23-Mar-20

24-Mar-20

25-Mar-20

26-Mar-20

27-Mar-20

30-Mar-20

Date

01-Apr-20 31-Mar-20

0

Close 36.01 35.1 38.14 34.8 36.73 36.42 36.18 36.45 37.47 39.9 39.6 39.85 36.32 37.05 34.71 36.05 37.34 37.47 38 37.73 37.04 38 38.63 38.8 40.22 40.73 41.85 42.65

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(ii) Daily Movement of All Ordinaries Index (24-FEB-2020 to 01-APR-2020)

Close 8000 7000 6000

5000 4000 3000 2000

1000

Date

Close

01-Apr-20 31-Mar-20 30-Mar-20 27-Mar-20 26-Mar-20 25-Mar-20 24-Mar-20 23-Mar-20 20-Mar-20 19-Mar-20 18-Mar-20 17-Mar-20 16-Mar-20 13-Mar-20 12-Mar-20 11-Mar-20 10-Mar-20 09-Mar-20 06-Mar-20 05-Mar-20 04-Mar-20 03-Mar-20 02-Mar-20 28-Feb-20 27-Feb-20 26-Feb-20 25-Feb-20 24-Feb-20

5,290.75 5,110.56 5,193.95 4,874.16 5,135.19 5,006.21 4,753.33 4,564.13 4,854.32 4,809.42 4,998.77 5,332.82 5,058.16 5,590.68 5,370.92 5,789.33 5,995.78 5,822.42 6,287.51 6,472.44 6,398.55 6,511.62 6,461.14 6,511.53 6,737.44 6,790.74 6,953.81 7,065.41

24-Feb-20

26-Feb-20 25-Feb-20

27-Feb-20

28-Feb-20

03-Mar-20 02-Mar-20

04-Mar-20

06-Mar-20 05-Mar-20

09-Mar-20

11-Mar-20 10-Mar-20

12-Mar-20

16-Mar-20 13-Mar-20

17-Mar-20

18-Mar-20

20-Mar-20 19-Mar-20

23-Mar-20

25-Mar-20 24-Mar-20

26-Mar-20

30-Mar-20 27-Mar-20

31-Mar-20

Date 01-Apr-20

0

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(c) Evaluation of the Share Price performance

 On the first day of tracking period (24th Feb) both the Woolworths and all Ordinaries shares were at their highest at 42.65 & 7065.41 respectively.  Woolworths lowest share price during the tracking period came on 11th March (34.71), whereas the lowest ASX all ordinaries during the same period was recorded on 23rd March (4564.13).  Australian Foundation Investment Co Ltd. (ASX: AFI) is the biggest recorded venture organization (LIC) on the ASX. Its main responsibility is to put resources into different offers on the ASX for its investors. At the end of March 2020, Woolworths was one of its largest share allocations. The shares of Woolworths were holding up quite well during the tracking period.(See Appendix A)  "Financial specialists [are looking] to gain by exchanging openings hurled by instability and less expensive stock costs after the ASX posted first-quarter decreases unheard of since the '87 accident," Saxo showcase planner Eleanor Creagh revealed to Business Insider Australia.  Easily recognized names like Woolworths are usually alluded to as bluechip stocks. They're the organizations that are broadly unmistakable, settled and will in general climate most tempests. It's maybe nothing of a surprise that these have been a portion of the main stocks that Australians have been gobbling up as the market tanks. "There's been a great deal of significant worth putting going on as of late as speculators search for organizations they can place their trust in," CMC Markets head of deals exchanging Ash Glover said. "Many individuals have been purchasing those blue chips like banks and retailers that have been hit extremely hard by the present condition." (See Appendix B)

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(D) Calculate portfolio gain and loss

Company name

Investment

No of Share

Closing price 1 April 2020

Proceed from sale of share

Woolworths Group limited

4213.17

117

36.01

-776.88

Explain: The share price has gone down from (42.65) on the first day of tracking period to (36.01) on the last day. Therefore the Proceed from sale of share would be a loss of $776.88 at the end of the tracking period.

(E) Recommendation of the share portfolio



In reference to the evidences that I have provided in part C, It is best to keep hold of the present shares and buy more shares if possible. Wait for the share prices to go up and then sell the shares.

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(Part 3) Ident Identification ification of key financial data and ratio analysis

(A) Key Financial Data

Woolworths Group Limited

$M (AUD)

Revenue/Sales Interest Expense EBIT Net Profit Before Tax Net Profit After Tax

59,984 126 2,353 2,227 2,759

Current Assets Total Assets Current Liabilities Total Liabilities Total Equity

6,298 23,491 8,620 12,822 10,669

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(B) Ratio Analysis (See Appendix C & D)

1. Current Ratio

* Current Assets ÷Current Liabilities 6,298 ÷ 8620 = 0.73

 Coverage of $2 of CA to cover $1 of is a generally accepted benchmark. 

It has bad liquidity with $ 0.73 of current assets.

2. Debt Ratio * Total Liabilities ÷ Total Assets 12,822 ÷ 23,491 = 0.54  

Woolworths has used $0.54 of debt to finance each $1.00 of assets. The greater reliance on debt, the greater the financial risk undertaken.

3. Equity Ratio Total Equity ÷ Total Assets 10,669 ÷ 23,491 = 45.5 %  

Woolworths has used about $0.46 of equity to finance each $1.00 of assets. The greater reliance on equity, the lesser the financial risk undertaken.

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4. Asset Turnover Sales ÷ Total Assets 59,984 ÷ 23,491 = 2.55 

Woolworths has an asset turnover of $2.6 for sales generated from each dollar of assets.

5. Profit Margin EBIT ÷ Sales 2,353 ÷ 59,984 = 3.9 %  

Woolworths has earned 3.9 cents in the dollar of sales. It has not been effective enough in generating profit from sales.

6. Return on Total Assets (ROA) EBIT ÷ Total Assets 2,353 ÷ 23,491 = 10 %  

Woolworths has earned a return on assets of 10 cents for each dollar invested in assets. 15% ROA annually is generally considered very good for an active investor. It falls short by 5%, having a 10% ROA.

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REFERENCE  Wikipedia 2020, Woolworths Group (Australia), viewed on 16th April 2020, < https://en.wikipedia.org/wiki/Woolworths_Group_(Australia)>  Wallmine 2020, Bradford Banducci net worth, viewed on 17th April 2020, .  Woolworths Group 2020, Investors (Shareholder Information-Dividends), viewed 17th April 2020, .

 ASX 2020, Woolworths group limited (annual report 2019), viewed 18th April 2020, < https://www.asx.com.au/asx/share-price-research/company/WOW>.  Dow Jones Factiva 2020, Companies/markets (quotes), viewed on 18th April 2020, .

 The Motley Fool 2020, Triston Harrison, viewed 22nd April 2020, .

 Business Insider Australia 2020, Jack Derwin, viewed 22nd April 2020, < https://www.businessinsider.com.au/australian-investing-coronavirus-asx-money-fundsstocks-companies-2020-4>.

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Appendix A

12

Appendix B

13

14

Appendix C

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Appendix D

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ASSESSMENT DECLARATION COLLEGE OF BUSINESS THIS FORM MUST BE COMPLETED, SIGNED, DATED AND ATTACHED TO EACH ASSESSMENT TASK THAT YOU SUBMIT FOR MARKING.

1. ADMINISTRATIVE DETAILS Unit of Study

Habib salem

Student name

s4627464

Habib Salem

Student ID number

S4627464

BAO1101 Accounting for Decision making

Title of

Decision making i n share mark et (part 2 &3)

Date due

Assessment

Date submitted

23/04/2020

Lecturer’s name (Higher Education only) Prakash Sapkotaa Teacher/tutors name Prakash Sapkota

Tutorial/class time Mon/Tue/Thu 11:30am-2:30pm

2. COMPULSORY STUDENT DECLARATION Plagiarism means using another person’s intellectual output and presenting it (without appropriate acknowledgement of the author or source) as one’s own.

Plagiarism constitutes academic misconduct. Where there are reasonable grounds for believing that this has occurred, disciplinary procedures as outlined in the Policy for Academic Honesty and Preventing Plagiarism will be instituted.

PLEASE TICK TO INDICATE THAT YOU HAVE SATISFIED THESE REQUIREMENTS I hav have e rea read d the poli policy cy o on n Academic Honest Honestyy and Prev Preventing enting P Plagia lagia lagiarri sm a and nd the rel releva eva evant nt referenc referencing ing guide guides s (or have had tthis his

expla explained ined to me by my teac teachers) hers) a and nd understa understand nd the conseque consequences nces of ccommitti ommitti ommitting ng academ academic ic mi misconduct sconduct as o outlined utlined iin n tthe he policy. This assig assignment nment iis s my ow own n wor work, k, I have not parti participated cipated iin n collusion, nor hav have e I prev previously iously sub submitted mitted th this is or a ve version rsion of it for asse assessme ssme ssment nt in any ot other her Unit of Stud Studyy at tthe he Univers ity or a any ny other inst institution itution wit without hout hav having ing obta obtained ined tthe he approva approvall of the teac teacher. her. I hav have e ta taken ken proper a and nd reas reasonable onable care to prev preve e nt this work from bei being ng copied by a anothe nothe notherr stude student. nt.  So that the a ssesso ssessorr can properly assess my work work,, I g ive this person pe permi rmi rmis s sio sion n to act a ccord ccording ing to Univers University ity poli policy cy a nd practice to reprodu reproduce ce thi this s wor work k a nd prov provide ide a copy to a nother member of sta staff ff for the purpo purpose se of cross che checking cking and modera moderatio tio tion n and to take steps to authenticate the a sse ssessment, ssment, including subm submitting itting a copy to a c heck hecking/detectio ing/detectio ing/detection n sy system stem that in tur turn n may retai retain na copy o off this w work ork o on n a da database tabase for ffuture uture cchecking. hecking.   I have carefully read the assessment criteria that will be used to evaluate my work as given below

- 

ASSESSMENT CRITERIA

Written Assessment on decision making in the share market. I certify that the statements I have attested to above have been made in good faith and are true and correct. I also certify that this is my work and that I have not plagiarized the work of others and not participated in collusion.

Student signature..............

vu.edu.au cricos Provider No. 00124K

Date .......23.../...04. /.20 ....