FINM7409 Financial Management for Decision Makers
Creation date:2024-05-04 15:28:04
Financial Management for Decision Makers
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FINM7409 Financial Management for Decision Makers
Assignment 1
Background:
Qantas and Virgin Australia are the two largest Australian airlines. Qantas has made a remarkable
turnaround and was one of the most profitable airlines in the world prior to COVID. On the other hand,
Virgin Australia has been loss making consistently.
As an investment manager, you would like to add one of these two companies to your portfolio, as you
believe the current share price is cheap (assume you are making the investment decision in March 2020).
However, before you make the decision, you would like to do a bit more research on both companies. In
particular, you want to analyse both companies for their performances in the past 5 years (2015 to 2019).
You are also interested in knowing why Virgin Australia was not able to make a profit, when compared to
Qantas. More importantly, given the current downturn, you want to know which company is more resilient
before you make a decision. In this assignment, you are required to use the tools you have learned in
FINM7409 including common size and ratio analysis, to analyse the financial statements of these two
companies. Also, you are required to write a short report summarising your key findings. Detailed
requirements are provided below.
Files Provided:
You will find the following files on Blackboard:
Assingment_Template.xlsx
o The income statement and balance sheet information has been provided.
o Complete this file for requirements 1 below.
Qantas FY19 Annual Report.pdf
Virgin Australia FY19 Annual Report.pdf
Both Qantas and Virgin Australia annual reports are for your background information. You do not need
them to conduct the analysis.
Required:
1. Complete the ‘Ratio Analysis’ worksheet and the common size analysis for income statements in
the file ‘Assignment_Template.xlsx’. In doing so, you will need to fill out the missing numbers in
‘Other Inputs’ worksheet. You can use Yahoo Finance to obtain the share price and dividend
information. Note: Do not change the order or the name of the worksheets.
2. Using the ratio and common size analysis computed above, write a short essay (no more than 700
words) addressing the following questions. Submit your answer as a pdf file.
a. For Qantas and Virgin Australia respectively, what are the trends in gross profit margin,
operating income margin and net income margin from 2015 to 2019? What have been the
key drivers for these trends? You will need to incorporate graphs showing the trends in your
analysis.
FINM7409 Financial Management for Decision Makers Semester 1 2022
Assignment 2
b. Compared to Qantas, why Virgin Australia has been loss making for the period between
2015 and 2019? Which areas should Virgin Australia focus on to improve the profitability of
the business? You will need to incorporate graphs showing the comparison between these
two companies over time.
c. When COVID hit in early 2020, which company was in better position to weather the
downturn (based on FY19 numbers)? Provide justification for your answer.
Mark Allocation:
Excel Computations (Part 1) 30
Report (part 2) 60
Presentation and Grammar 10
Total 100
Final Submission
The ‘Assignment Submission’ folder on Blackboard contains three submissions:
Part 1 Excel Submission: Submit an excel file containing the answers to parts 1 (use the template
above and re-name the file to “Assignment_xx.xlsx”). This is the version which will be marked and it
is the one you will see in “My Grades”. Note: xx is your student number.
Part 2 Pdf Submission: Submit the pdf answer to part 2 here (name the file to “Assignment
_xx.pdf”). You may re-submit as often as you like, and the last version should be submitted here
and will be marked, and it is the one you will see in “My Grade”. Note: xx is your student number.
Part 2 Pdf Turnitin Submission: Submit the pdf answer to part 2 here as well (name the file to
“Assignment_xx.pdf”). Each time you submit the file to Turnitin you will get a report for the
purpose of plagiarism detection. You may re-submit through Turnitin as often as you like, and the
last version should be submitted here and will be marked, and it is the one you will see in “My
Grade”. Note: xx is your student number.
Late submission will incur penalties as outlined in Section 5.3 of the Electronic Course Profile. For
submission extension, please refer to the same section.