AFIN1002 Finance 1B

Assignment
Session 2 2023

Submission details
Weight: 20%
Due date: 15 October 2023 at 11.55pm
What to submit: Submit your whole assignment in the Excel template provided in iLearn
Submission via: Assignment link

Late submissions attract a penalty. Unless a Special Consideration request has been
submitted via https://ask.mq.edu.au/ and approved, a 5% penalty (of the total possible
mark) will be applied each day a written assessment is not submitted, up until the 7th day
(including weekends). After the 7th day, a grade of ‘0’ will be awarded even if the assessment
is submitted. A 1-hour grace period is provided to students who experience a technical
concern.

This is an individual assignment. General discussion of the topic is allowed but analysis,
conclusions and written submission must be your own work. The use of generative artificial
intelligence is not permitted for this assignment.

You may post any questions on the relevant Forum section of iLearn. Please don’t leave your
questions to the last minute as we cannot guarantee to answer questions posted within 24
hours of the deadline.

Purpose
The purpose of this assessment is to apply the skills developed on discounted free cash flow
models and financial statement modelling in weeks four and five to a company listed on the
Australian Securities Exchange (ASX). In this assessment, you will develop your skills in
financial modelling, which is a valuable skill sought by employers.

Outcomes addressed
This assessment addresses the following unit learning outcomes:
3. Apply financial theory to real world and personal financial decisions; and
4. Analyse real financial data to evaluate the well-being of companies.

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Academic integrity
Students must comply with the University’s Academic Integrity Policy:
https://policies.mq.edu.au/document/view.php?id=3. Breaches of this policy include but are
not limited to, copying work, not acknowledging sources, and paying someone else to do your
work. If work is found to be plagiarised, or fraudulently written, there are severe penalties
including exclusion, and revocation of degrees.

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Assignment Instructions
• Download the assignment Excel template under the assignment section of iLearn.
• Do not insert or add rows or columns since the assignment will be auto marked using
formulas which will expect to see your answers in pre-determined cells. Adding rows and
columns will upset this process and result in a zero mark.
• Only the answers entered into the yellow cells of the "Questions" tab and your projected
income statement and balance sheet, which is to be done below row 98 of the spreadsheet,
will be marked.
• Do not link this spreadsheet to other spreadsheets saved in different files since you will
only be able to submit a single file online, so any links will not work and risk scoring zero.

• Choose any one Australian company listed on the Australian Securities Exchange (ASX)
that has the past 4 years of financial statements available, is not a bank, and has no
preference shares.
• Do not choose Metcash Limited since this company was used for the valuation example in
the week 4 and week 5 lectures.
• Try to avoid choosing the same firm as your friends. Doing so and sharing files will result
in serious plagiarism problems.

• You should use Morningstar’s DatAnalysis Premium to access all financial information for
this assignment. It is available through the Macquarie University Library website.
• Go to https://www.mq.edu.au/about/facilities/library.
• In the MultiSearch textbox type "datanalysis premium" and press enter.
• Click on the top search result.
• Under “View Online” click on DatAnalysis premium.
• Search for your company either using its name or ticker then go to “Financial Data” to
access the Profit & Loss (income statement) and Balance Sheet.
• Download the spreadsheet to Excel. The data Excel will display all numbers. Convert this
to the same units (i.e., $ millions, $ thousands) as displayed on the DatAnalysis premium
website profit and loss and balance sheet.
• The Beta of your chosen company can be accessed from DatAnalysis premium by clicking
on “Key Data”.

• You will need to forecast the income statement and balance sheet for your chosen
company for 5 years. This is to be done below row 98 of the spreadsheet.
• You should follow the approach from the week 5 lecture where this process was
demonstrated for Metcash Limited.
• For most items in the income statement and balance sheet, you should apply the percent
of sales method demonstrated in the week 5 lecture. For some items, the percent of sales
method will not be meaningful. This will include interest expense, tax expense,
abnormals, long-term debt, and equity. Follow the approach in the week 5 lecture for these
items.
• Make sure your balance sheet balances.

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Guidance on questions 6, 7 and 8
Question 6:
• If you've got your formulas correct in Question 5, then you can do Question 6.
• You need to find a new WACC in G32, which makes the estimated share price in G43 and
the traded market share price in G44 equal.
• Click "Data" - "What-If Analysis" - "Goal Seek".
• In the goal seek dialogue box, “Set cell” G43 “To value” G44 “By changing” C32.
• Copy the new generated WACC in G32, then paste special by value into G47.
• Copy G31 original WACC then paste special by value into G32, to overwrite the hard-
copied G32.

Question 7:
• If you've got your formulas correct in Question 5, then you can do Question 7.
• You need to find a new long-run growth rate in G35, which makes the estimated share
price in G43 and the traded market share price in G44 equal.
• Click "Data" - "What-If Analysis" - "Goal Seek".
• In the goal seek dialogue box, “Set cell” G43 “To value” G44 “By changing” C35.
• Copy the new generated long-run growth rate in G35, then paste special by value into G54.
• Replace the new hard-coped long-run growth rate in in G35 with the original long-run
growth rate.

Question 8:
• If you've got your formulas correct in Question 5, then you can do Question 8.
• First, set the top left corner equal to the estimated share price with the calculation
formula, that means set "D64=G43.
• Then, set up different long-run growth rates in the yellow line E64-L64. Copy your certain
long-run growth rate value G35 into the middle position (H64), then make the growth
rates increase from left to right at a percent that you think is sensible.
• Then, set up different WACC in the yellow column D65-D76. Copy the WACC value G32
into the middle position (D70), then make the WACC increase from top to bottom at a
percent that you think is sensible.
• Next, select the whole yellow table area of Question 8, from the left top corner D64 to
the right bottom corner L76.
• Check your Excel settings, Click "Formulas" - "Calculation Options" - tick "Automatic".
• Click "Data" - "What-If Analysis" - "Data Table".
• Set “Row input cell” to G35, and “Column input cell” to G32.
• Contains nice conditional formatting colour shading: select and highlight the whole
yellow table area, Click "Home" - "Conditional Formatting" - "Colour Scales" - "Green-
Yellow-Red Scales".

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Assessment Rubric

Criterion High Distinction Distinction Credit Pass Fail

Questions 2, 3, 4, 5, 6, 7, and 8 will be auto marked in the submission spreadsheet.

Question 1 Projected income Projected income Projected income Projected income Projected income
10 marks statement and statement and statement and statement and statement and
balance sheet are balance sheet are balance sheet are balance sheet are balance sheet are
fully accurate. mostly accurate with mostly accurate, partially accurate mostly inaccurate.
minor errors or however contain a and contain some
omissions that do small number of significant errors
not affect the significant errors and/or omissions.
outcome. and/or omissions.

Question 9 Recommendations Recommendations Recommendations Recommendations Recommendations

20 marks are clearly stated, are clearly stated, are clearly stated, are stated but not are not
supported by supported by supported by sound appropriately appropriately stated
extensive thorough arguments. supported. and supported.
arguments. arguments.

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