FIN5DBS – DEBT SECURITIES ASSIGNMENT
Due Date: 23:55 pm, Sunday, 28th May 2023
Topic:
Choose one of the companies from the industrial sector listed on the ASX and prepare a
credit rating report for the company. Please write your selected company name, your
name and your student ID on your report's front page. The current list of the industrial
companies can be found at the following link:
https://www.listcorp.com/asx/sectors/industrials. If your chosen company is not on
the list, your mark for this assignment will be zero.
Instructions:
1. In this assignment, you must conduct a capacity analysis and the Altman Z
score analysis for the company's overall creditworthiness.
Your capacity analysis should include the following three parts:
a) Industry structure analysis
b) Industry fundamental analysis
c) Ratio analysis
2. In the part of ratio analysis, you are required to compute the eight historical
financial ratios, as shown in the table below. You should also forecast these
ratios for the next year, compare your predicted ratios to the ratios shown below in
the table, and recommend an appropriate credit rating accordingly. I
recommend using at least the past three years' financial data for your analysis.
3. You should make your forecast based on the company's fundamental information
and the industry report obtained from databases such as DatAnalysis Premium
and IBISWorld.
4. You need to choose an appropriate Z score model to compute the current Z score
and forecast the Z score for the next year. You should also indicate the company's
financial status based on your forecasted Z score.
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Note: To make your result comparable to the debt ratios shown in the last two columns,
please use net debt for your calculation. Net debt is a company's interest-bearing
liabilities minus cash or cash equivalents.
Reference Materials:
▪ The lecture slides (Lecture 6).
▪ Databases (see the resources uploaded in LMS), such as DatAnalysis Premium
and IBISWorld.
▪ Financial statements and other information provided by the company.
▪ Other reliable Internet resources – e.g. ratings agencies, stock market analysts.
▪ Newspaper reports.
▪ Any other publicly available and reliable information.
Format:
Typed in 12-point font using Times or Times New Roman at 1.5 or double spacing. Left and
right margins should be set to 3.5 cm or 1.5 inches. Pages should be numbered consecutively.
Figures and tables should be presented in a professional way. You should cite all the
references (i.e. the sources of the information) correctly in your text and list all the references
at the end of your report.
Word Limit:
2000 words. This is a guide, and there will not be an explicit penalty for exceeding this word
limit. Assignments with insufficient information (i.e. well under 2000 words) and
assignments that are unnecessarily long will receive fewer marks within the marking
scheme.
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Marking scheme
Introduction 5%
Industry structure analysis 10%
Industry fundamental analaysis 10%
Ratio analysis 40%
Altman Z score 20%
Overall presentation 15%
Marks:
The assignment will be marked out of 100 and comprise 30% of your final grade.
Submission:
Students must submit the assignment via Turnitin in the LMS. Email submissions will
not be accepted. Please write your name and ID on the front page of your assignment.
Penalties for late submission:
Please refer to the subject learning guide.
Plagiarism
Plagiarism will be treated very seriously. If you are found guilty of plagiarism, you will get
zero for the assignment, and you will be charged with Academic Misconduct, which has
serious penalties. If you plagiarise, you will be caught.
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Rubric:
< 50% 50% - 64% 65% - 79% 80% - 100%
Content and
argument
(60%)
Present an unclear
argument for the
recommendation
which is not
supported by logical
and clear analysis.
Supporting
information is
irrelevant and
inaccurate.
Present an
appropriate
argument for the
recommendation
which is supported
by some information
and analysis
throughout the
presentation.
Present a relatively
strong argument for
the
recommendation
which is supported
by sufficient
information and
reasonably clear
analysis throughout
the presentation.
Present a
compelling
argument for the
recommendation
which is supported
by logically
sequenced
information and
clear analysis
throughout the
presentation.
Visual aids
(20%)
Use irrelevant visual
aids to support key
points and engage
the audience. Slides
contain too much
information and
hard to read.
Use limited or
sometimes
distracting visual
aids to support key
points and engage
the audience.
Use relevant visual
aids to enhance key
points and engage
the audience.
Use appealing visual
aids to enhance key
points and engage
the audience.