Recent Question/Assignment

Assignment 1
25743 Corporate Financial Analysis SPRING 2015
Cochlear Ltd (COH.AX) –
Sector: Healthcare | Industry: Medical Appliances & Equipment

Write a recommendation report for a potential client on your company. The report shall be structured in 5 Sections (preceded by a brief executive summary) to address the following questions of your client:
1. What are the competitive forces behind the industry’s structure? How does industry competition affect the margins of the industry and the company? What is COH’s business strategy? (Lecture 1 and 2)
2. What is the position of the firm in the industry life cycle? Please highlight potential investment risks the company could face in the future. (Lecture 1)
3. How does the company’s profitability compare relatively to its industry peers (select between 3 and 5 industry peers among those provided)? Please examine COH’s liquidity ratios. (Lecture 2)
4. Quantify the level of earnings management by calculating the firm’s total accruals (TA), non-discretionary accruals (NDA) and discretionary accruals (DA), and draw some conclusions on your findings. (Lecture 4)
5. Analyse how the market is pricing COH using different relative valuation techniques. (Lecture 3)
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• Team Structure: The number of students in a team MUST be equal to 5 (neither more nor less). You can form teams across different classes.
• Submission Date: Your assignment is due by 5pm 31 August 2015 (Week 6). Please check UTS online for more information on page constraints.
• Submission Place: Please submit your assignment in the assignment box FDG1 located on level 5 in Building 8 (please refer to the map with the location of FDG1). No late submission will be accepted.
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REMEMBER to indicate clearly in the Cover Page: (1) your Lecturer’s name; (2) the name and number of each team member and his/her allocated section of Assignment 1; and (3) the class time.
Marking Criteria Marks (out of 10)
Industry analysis 3
Ratio analysis (profitability, liquidity, etc.) 2
Relative valuation analysis 2
Assessment of accounting quality 1
Overall quality of the report (format, structure and language) 2
Total 10