This assessment is an individual assignment. Each student will submit the assignment electronically in a single file via Turnitin on the unit Moodle site. Please include a cover page mentioning the student name and student ID.
The task consists of a number of questions to be answered in your own words, with supporting material to be provided in the appendix. The report must be written as an academic essay. Please include a Table of contents at the beginning of your report. You will be assessed on not just the completeness of your answers but also the level of academic literacy.
If it is believed that a student has copied material from another student or any other source without appropriate referencing, the necessary action will be taken under the Institute’s Student Academic Integrity and Honesty Misconduct Policy’.
Late penalties will be applied for assignments submitted after midnight on the due date without an approved extension. More details on late penalties are provided in the Unit Outline.
Zip Co Ltd has announced plans to raise $400m via bonds (i.e. debt financing) to finance expansion pans(The Australian, 15 Apr 2021, page 16).
Using knowledge acquired in this unit, you decide to investigate the financial statements of Zip Co for the year ending 30 June 2020. Using ratios covered in this unit and associated analysis, your aim is to analyse your choice of elements of liquidity, asset mix and solvency, and then use this analysis to draw a conclusion regarding the strength of the financial position of the company and whether this is strong enough to support the debt financing and future growth ambitions.
Note: marks will be deducted if instructions for preparation, and submission, of report are not followed.
Part A (8 marks): 1. Overview (guideline approximately 5% of report) Briefly identify the purpose of this report, the potential users of the report and outline the information required by the users.
2. Balance Sheet Analysis (guideline approximately 35% of report)
Analyse the 2020 (and 2019 if needed) financial statements, and supporting notes from the Annual Report, for Zip Co Ltd and allocate the assets and liabilities from the balance sheet into current and non-current. Provide brief supporting justifications for your allocation.
Part B (12 marks): 1. Financial Statement Analysis (guideline approx. 55% of report)
Using the 2020 (and 2019 if needed) Annual Reports of Zip Co Ltd (links available from ‘Additional Assignment Resources’), prepare an analysis of the most relevant set of ratios to achieve the purpose identified in Part A: Overview. A maximum of 6ratios only can be used (this does not include any common size or percentage analysis of the financial statements if you wish to also use this). Justify (using authoritative sources) how your choice of ratios will achieve the purpose of there port.
Clearly identify any assumptions made and justify conclusions reached. Include only a summary of the ratio values in the body of the report. Any detailed calculations should appear in Appendix 1.
2. Recommendation (guideline approximately 5% of report) Provide a summary of your conclusion regarding the ability of Zip Co to successfully undertake future growth ambitions
