COMM1140 Financial Management – Term 1, 2024
Group Assignment
Instructions:
The group assignment is worth 25% of the total assessment for this course. In your week 4 tutorials,
your tutor will randomly divide you into groups. Each group will be allocated one of the below
companies, which you must use to complete the task below (hereafter, ‘assigned company’). The
2023 annual report of your assigned company must be used to complete this assessment. For
comparative purposes, you may also use other relevant annual reports or public information.
- Nine Entertainment
- Seven Network (Seven West Media)
- The Reject Shop
- Kogan
- Temple & Webster Group
Assignment:
All Australian businesses are currently facing uncertain trading conditions. High inflation and labor
shortages have created sudden cost pressures and forced businesses to pass on cost increases to
their customers. Additionally, rising interest rates pose a growing risk to businesses that have
accumulated high levels of debt and increase the likelihood of a global recession occurring in the
next 12 months.
You are a UNSW Commerce graduate in 2022 who quickly found employment in Felicity Trust, a
financial services company that specialises in providing loans to large Australian businesses. Your
manager has asked you to prepare a presentation to help Felicity Trust decide whether it should
continue lending money to your assigned company. This is the first task your manager has asked
you to complete independently, and you want to ensure that you impress! Luckily, you took notes
when the task was assigned to you, which should be strictly followed to complete this task.
The notes are as follows:
Question 1: Present a description of the business and the nature of its operations. This should
focus on providing a short explanation of the business’s history, how it generates revenue, and
who forms its customer base (5 Marks);
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Question 2: Present a financial statement analysis of the financial performance and financial
position of the company (35 Marks);
Question 3: Identify one risk from reading the reports prepared by key management personnel
(i.e., Board Chair and/or CEO) in the 2023 annual report that may impact the company’s future
financial performance and/or financial position. You should explain clearly how the risk you identify
could affect the ratios discussed in Question 2 above (10 Marks);
Question 4: Using two Firm Multiples and two Equity Multiples of three similar companies to your
assigned company (30 Marks):
a) Compare your allocated company with 3 similar companies and determine which one is
the most similar. For the company that is most similar, provide supporting evidence and
references of the comparison and state any assumptions (if any) you are making for this
comparison. (10 marks)
b) Calculate a range and mid-point (average) valuation of your allocated company’s
outstanding equity (both the market capitalisation value and market share price) based
on the 3 similar companies. Provide evidence of data collected with proper referencing
and calculations to substantiate your valuation. (10 marks)
c) Based on the comparison in part (a), explain from part (b) the reasons for the width of the
range in valuation and why you think the mid-point valuation is accurate or not. Provide
evidence and the sources of the evidence that support your explanation. Based on this
explanation, give a simple but educated guess about the percentage you would adjust up
or down the mid-point valuation to something more reasonable. What would that new mid-
point valuation be? (10 marks)
Question 5: Present a short description of whether you would recommend Felicity Trust to continue
providing loans to your assigned company in the short term. You should clearly describe how and
why you came to this decision. (5 marks)
Submission Requirements
Three separate submissions are required as part of this assignment, as outlined below.
1. Group Contract
All groups must complete a group contract that sets expectations as to how the assignment will be
completed.
The total maximum grade for the group contract is 2 marks.
Submission Requirements:
One member of each group should email a completed group contract to your tutor by 5 pm on
Friday, March 15th. All group members should be cc’d on the email. Late submissions will be subject
to the penalties outlined below.
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2. Video Submission
To answer Questions 1-4, you should prepare a 15 minute pre-recorded video presentation,
clearly following the submission requirements set out below. An additional 5 marks are available for
the following:
a. Structure of the presentation, professionalism and timing. (2.5 Marks)
b. Use of Visual Aids. (2.5 Marks)
The total maximum grade for the video submission is 85 marks.
Submission Requirements:
One member of each group will be required to submit your pre-recorded 15 minute video
presentation via the dedicated submission link on Moodle by Wednesday, April 10th at 5 pm. Late
submissions will be subject to the penalties outlined below.
3. Tutorial Presentation
To answer Question 5, you must prepare and present a 3 minute presentation in your week 10
tutorial, clearly following the submission requirements set out below. An additional 8 marks are
available for the following:
a. Structure of the presentation, professionalism and timing (2 Marks)
b. Quality of responses during your presentation and your questions when critiquing an
allocated peer group (6 marks)
The total maximum grade for the tutorial presentation is 13 marks.
Submission Requirements:
Each group is required to designate one group member who will be responsible for emailing your
presentation to your tutor before your tutorial in week 10. You must include a cover sheet with this
submission, which lists the names and Z-ids of all members of the group. This cover sheet can be
found on the COMM1140 Moodle site. The designated group member must submit this file on behalf
of the entire group.
Late Submission Policy
Late submission will incur a penalty of 5% per day or part thereof (including weekends) from the due
date and time. An assessment will not be accepted after 5 days (120 hours) of the original deadline
unless special consideration has been approved.
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Submission Expectations – Video Presentation
1. To answer Questions 2, 3, and 4, you may only use the ratios provided in the “COMM1140
Ratio List” document (available in the “Group Assignment” Section on Moodle).
2. You must show a copy of the ratios you use to analyse the financial position and financial
performance of the company allocated to your group for Question 2. Tables should be
embedded in your presentation that show all ratios used to interpret the financial performance
and financial position of your assigned company and its peers over the timeframe selected
for your analysis (i.e., 2 years or more). We recommend that ratios be presented in table
format using the categories discussed in the lecture (profitability, efficiency, liquidity, financial
structure). Past students have found the IBISWorld database a useful source of industry
averages (as used in your tutorial homework for week 4).
3. Question 4 is about multiples valuation. Start with a brief overview of the method applied,
then walk your audience through how you used that method to value the firm. Be sure to
explain any assumptions you made and how they might impact your valuation. You need to
explain the rationale for choosing your comparable firms. Gather data on the firm you are
valuing as well as the firm's competitors. There are several sub-methods for multiples
valuation within firm multiples and equity multiples. Choose 4 sub-methods (2 from each
valuation method) that are most appropriate for your analysis. Discuss if there are any
discrepancies between the valuations.
4. You must also show a copy of the calculations you conducted to answer Question 4 during
your presentation.
5. We recommend that groups use data visualisations to support your answer to question two
and question four (or any other question you feel appropriate). A video on data visualisation
has been provided on Moodle to help you in designing your presentation slides. See the
“Support” section of the “Group Assignment” Section on Moodle.
6. We recommend splitting your 15 minutes based on the overall weight of each question. For
instance, question two is worth 35/85 marks (approximately 41% of the total marks). This
means you should spend about 41% of the 15 minutes on this question, or approximately 6
minutes (6/15 = 0.4).
7. You do not need to include a response to Question 5 in your video submission.
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Submission Expectations – In Tutorial Presentation
1. Your in-tutorial presentation should focus on responding to Question 5. Question 5 asks you
to provide a recommendation to your manager and reference evidence for your decision
based on information contained in earlier sections of your presentation. There is no ‘correct’
answer here – students can provide valid arguments of “yes, extend the loan” or “No, do not
extend the loan” for each company. We are interested in the rationale used to support your
decision. You should be clear in your 3 minute pitch to your manager why you came to this
decision. We recommend that you provide 3 to 4 reasons to support your recommendation.
2. Following your presentation, a 5 minute Q&A will take place where you will respond to
questions from your tutor/peers on your assignment and how you came to your final decision.
Each group will be allocated a peer group to which they must pose questions during the Q&A
component of that group’s presentation. Peer groups will be allocated in your week 9 tutorial.
The questions should focus on extracting the information from the group you need as the
manager to understand whether or not the loan facility should be extended.
Other guidance:
1. The assignment primarily covers content discussed in the lectures in weeks 4 and 5. You
should be able to begin answering questions 1-3 after the week 4 lecture/tutorial and question
4 after the week 5 lecture/tutorial.
2. A marking rubric is provided on Moodle. You could be asked to complete this task in a
graduate role in business. Often, for these tasks in the real world, you do not have a sample
to work off; your manager simply gives you the task, and you must respond! The idea of this
task is to prepare you for such a scenario that you will encounter in the future. If you have
questions, please post them in the Q&A forum on Moodle.
3. We encourage groups to spend time preparing their presentation slides – both for your 15-
minute video presentation and in-tutorial presentation. Try not to overload your slides with
information – this is a common mistake we see each term. Please do ensure, however, that
the information you include in your slides communicates the key messages you want to
highlight in response to each question.
4. Working in a group can be a challenging process. We encourage groups to work through any
challenges that they encounter as a team. The COMM1140 teaching team should only be
contacted as a last resort to resolve group conflict.
5. To ensure that you reflect on your contribution and the contribution of your group members,
we will ask you to respond to a short Peer Evaluation Survey on Moodle in week 10. If you
feel member(s) of your group have not contributed to the assignment, you can express your
concerns in the survey. The COMM1140 teaching team will review the student responses,
and students found not to contribute to the group assignment may receive a reduced grade.