FIN3CFI Corporate Finance Report

.   TASK OVERVIEW

Lecture 1 introduces the traditional and evolving roles of CFOs in public limited companies – highlighting firms' goals and the agency issues in corporate management. Lectures 2 and 3 present the governance and management aspects of capital investment decisions by incorporating risks and real options to ensure positive NPV. Lecture 4-7 introduces the scope of financing opportunities and how to reach a capital structure decision that optimizes firm value, while lecture 10 introduces the dividend decision. Building on the concepts drawn from these lectures, this Corporate Finance Report aims to expand your conceptual understanding, ability to apply and take essential job market transferable knowledge by examining several financial management decisions of a chosen company from the Australian market. The report should -

N Identifying CFO's tasks in the selected organization in the context of the traditional and changing role of CFOs (highlighted in Lecture week 1, Global CFO Research, and 2017 global corporate treasury survey1).

N Conduct temporal analysis of the identified CFO functions listed in the task details section in this document for your selected company.

N Present a 'short and sweet’ discussion of the current practices of how CFOs conduct these functions to contribute to the firm goal.

N Provide comments and suggestions in each section drawn from your analysis.

2.   MAJOR TASK DETAILS:

BACKGROUND TASKS – KNOW YOUR SELECTED COMPANY

FIN3CFI is a subject with 200 plus students. Given that leaving the task of selecting companies to students may create interruption with the schedule and unnecessary email back and forth, the subject coordinator has already allocated a company form the list of companies available in ASX. The selected company and the respective students' details are available in LMS.

¹ Available at https://www2.deloitte.com/content/dam/Deloitte/au/Documents/financial-services/deloitte- au-fs-global-corporate-treasury-survey-report-2017-210817.pdf

Changing the assigned company is not allowed. However, for exceptional circumstances where data availability is an issue (debt amount missing, no dividend payment etc), students can request a change of the selected company to the subject coordinator. Note that the email of such request should have an appropriate subject heading with the company's name from ASX-listed firms. However, the company's name should not be a company that has already been allocated to other students in the cohort. Either way, the process must be completed by the end of week 5.

Before starting the Assignment, you should browse the company's website to familiarise yourself with the company and check the availability of financial and accounting data, annal reports, and other information in the Data Analysis Premium platform for the respective company.

Note that the Data Analysis Premium platform is accessible through a university library database. Moreover, students can also visit the company website and check for investors' relations or the financial section to download the annual report.

3.   REPORT STRUCTURE:

Each student should gather relevant financial and non-financial sources of information about the selected company and assess its financial management policies and practices.

COVER PAGE

The first page should contain a professionally suitable background image of the company's logo/ product/ services and mentions the following:

• Name of consultant (student) and consultant ID (student ID)
• Name of the selected company and its' listed exchange(s).
• Release date of the consultant's

The second page should include the table of content that is hyperlinked (preferably) with various sections of the report to help navigate through the submitted PDF file during the assessment process.

The third page should contain the executive summary (Maximum 150 words not counted against the total word count). The executive summary highlights the report’s contexts, findings, and significant inferences from the analysis.

MAIN BODY OF THE REPORT

a.    Understating the firm and its industry

This section should provide a brief context to help the reader understand the bigger picture about firm's operation and its environmental dynamics. Key points to highlight may include -

• Overview of the market, market shares of key players and your firm, key trends in the past five
• A brief overview of the firm and its core businesses (critical products/services, % contribution to revenues) with the comment on the firm's business model, e.g., how the firm makes a profit, what are the main sources of revenues and costs, and what it tells about the company's future.
• Brief comment on the key strategic/market/financial or other risks through the lens of PEST (Political, Economic, Social, Technological)

b.    Corporate governance

Contents in this section should provide a cohesive understanding of the firm's corporate governance practices. You should comment on the potential of the current governance status to resolve agency problems. Key issues to highlight includes -

• Firm's corporate governance practices with focus on board size, board independence ratio, key committees, independence of key committees, CEO duality (CEO is also chairman of the board), CFO board membership, etc.
• Firm's compensation practices for the top management – salary, bonus, option grant, ownership to top management (CEO and CFO) and elucidate its potential to resolve (exacerbate) any agency Comment on the pay-performance sensitivities of executive (CEO and CFO) compensation design.
• Status of director's remuneration and audit fee over the
• Comment on whether the firm deviates from best corporate governance practices set forth by Australian regulators. Does current practices help the firm in solving agency problem?

c.    Capital structure

Contents in this section should provide a cohesive understanding of the firm's capital structure and financing choice. Key issues to highlight includes -

• Firm's capital structure practices during the past five years.
• Comments on how diversified firms' long-term financing sources
• Whether firms have raised significant additional capital during the What are the main sources of such capital, and how evolving are these sources?
• How does the issue of debt (if any) /bank loan affect the firm's coverage ratio?
• whether any link can be established between the firm's financing policy and its shareholders' wealth through higher(lower) EPS, market performance and stock price reaction to the announcement of the new equity or debt issue or raising of significant long-term bank loan.

d.    Capital expenditure / investment management

Discussion in this section should provide an overview of the firm's investment portfolio strategy and its connection to improved market share and financial performance. Key highlights should include -

• Firm's capital investment practices using historical analysis of long-term investments for the past five
• If there is any significant investment during the period, including investment in fixed assets, restructuring through merger and acquisition, or
• How company's investments in tangible intangible assets are changing?
• The efficiency of investment - contribution to the cash flow stream, profitability, and market performance and announcement effect (if any) of such investment

e.    Distribution decision

Discussion in this section should provide an overview of the firm's distribution policy. Key issues to highlight includes -

• Firm's dividend decision using historical analysis of dividends, such as dividend payout policy during the past five years.
• Firm's dividend practice types - stock dividend and/or cash dividend, frequency - annual interim dividend, etc.
• Comment on the market reaction of dividend announcement using event study, i.e., calculating abnormal return for two dividend announcement events (preferably one increase and one decrease)
• Comment on whether the market reaction is consistent with the nature of the dividend

CONCLUSION

Concluding notes should provide an overall (maximum 150 words not to be counted against the total word limit) comment on the firm's financial management practices and value relevance.

APPENDICES

Appendix to main report (in PDF and word document) should include:

• Notes on any earning quality issues, reporting anomalies – how you handled
• References – Keep it minimum and follow APA formatting

Appendices should include all information/calculations supporting the main text of the research report and should be submitted as an excel file. It should include:

• Financial analysis/data that support the report's contents - numbers, suggestions, or
• Formatted historical investment and financing statements, income statements, cash flow statements,

4.   ADDITIONAL FORMATTING NOTES:

• The report should be 'short and '
• The main body should be around 15002 words + maximum 10% tolerable
• A4 page with a 5-space and Times New Roman font size of 11.
• Ideally should match the format of a professional management consultant report with creative use of visualization Use graphs, figures, pie charts, histograms, tables, etc and apply your formatting knowledge to give the report an impressive look and economize the word count.
• Avoid providing redundant information, e., a table and a graph stating the same.
• Appendices may contain additional detailed analysis, including reasons behind the presented analysis/result in the main report, and all the calculations used in the report must be shown.
• Materials presented in appendices will not be considered for marking You are expected to present a 'professional, fair, and accurate’ report. Markers will consult the appendices to check the authenticity and correctness of the information presented in the main text of the report. The absence of such support in the appendices will count against the mark.

5.   WRITTEN REPORT (SOFT COPY):

• Only the soft copy (PDF – preferred / Word Document file) of the written report will be acceptable for submission via the link in the Assignment section available on The link for submission will be available in LMS one week before the submission deadline. Email a Word version of the report to [email protected] for reference only. Ensure that the email's subject line follows prior instructions (FIN3CFI

– Student ID – Assign Submission).

• For academic integrity and training of future management consultants who will show confidence and independence, Turnitin will be used to report text matching. The students will be able to resubmit the report as many times as they wish until the report's due date. Note that the TurnItIn text-matching report shows the percentage of each team's work matching with other sources, including the work of other students in the cohort, past and present students at La Trobe, and other online materials. TurnItIn matching percentage of more than 25% will result in the rejection of the
• In the case of two matched reports (no determination will be made about the original document) and following the academic integrity module, both students will be equally penalized (or both reports will be rejected).
• During high traffic, Turnitin will take time to generate the matching report. You may want to submit the final report early (before the actual deadline) to allow sufficient time for LMS to generate the Turnitin report.
• Special consideration will not be accepted for this task except for students suffering from COVID-19 within 15 days prior to the submission date for the task or for students who have received special consideration from the university on other valid grounds at the start of the semester.