You are to choose 1 company from the Australia securities exchanges (ASX) and write an analysis report of their stock including a recommendation to buy or sell. (I choose Rio Tinto company)

 

Note: You are to pick a company that provides a dividend yield.  

 

The first part of your report is a qualitative analysis of your company. This should start with an introduction that gives a summary of the company's business. This section should also include an analysis of the company's strengths, weaknesses, opportunities and threats (SWOT). (See https://www.youtube.com/watch?v=9-NWhwskTO4) You will then finish this section with a discussion of the company's a business and future growth prospects, (what the news and people say it?). 

 

Your report must also include a quantitative analysis of the company's Leverage, Liquidity, Profitability, Efficiency and Market ratios. Also, include a discussion of the market-book ratio. Please refer to the mark allocation table below for the range of ratios to use and the format for our report. In your analysis, please use comparison data from the year ending 2022 with the year ending 2021. Please provide a brief discussion of your analysis of each ratio.

 

Determine the intrinsic value (Po) of the company share for the case where (i) there is no growth in dividends and (i) there is a constant growth of dividends of 2% per year. Check with your lecturer for the current discount rate. You Should use the company's most recent annual report for your analysis and include all assumptions and forecasts. Please submit this annual report and highlight on the report the data used for your ratio calculations.

 

Your conclusion will include your recommendation summarizing your finding in support of your recommendation.

 

Mark allocation Part 1

 

- Summarty of company's business

- SWOT analysis

- Growth forecasts

- Liquidity ratio and analysis (Working capital/current)

 

                                                      Current assets 

                                                      Current liabilities

                 

  Quick asset/liquidity 

 

(Current assets (excluding inventory and prepayments))

       Current liabilities (excluding bank overdraft) 

 

- Stability /financial leverage ratios and analysis  (Times interest earned)

                                                

                                     Profit before income tax + interest expense                                                                                                                                                                              Interest expense

 Debt to equity (Gearing ratio) 

                                                          Total liabilities 

                                                             Equity (end) 

 debt ratio = total assets 

                        total liabilities

 

- Profitability/Investment return ratios and analysis 

 

 Net profit margin = Total sales 

                                    Net profit

ROE = Net Profit/Book Value of Equity 

ROA = Net Profit/Total assets

 

Transcribed Image Text:

Efficiency ratios and analysis Sales Asset Turnover = Inventory Turnover = Total Assets Sales Accounts receivable days = EPS Market ratios and analysis Net Income = Shares Outstanding Share Price Inventory Conclusion P/E= EPS Note: For share price, use close price at 30 June 2021. Account receivable Average daily sales Market to Book ratio and analysis market-to-book ratio= Market value of equity Book value of equity Dividend Discount Model (Po) References (Chicago style) Presentation and layout (formatting) Cover page, Table of Contents, Headings and Subheadings Font: Calibri Font Size: 11 Efficiency ratios and analysis Sales Asset Turnover = Inventory Turnover = Total Assets Sales Accounts receivable days = EPS Market ratios and analysis Net Income = Shares Outstanding Share Price Inventory Conclusion P/E= EPS Note: For share price, use close price at 30 June 2021. Account receivable Average daily sales Market to Book ratio and analysis market-to-book ratio= Market value of equity Book value of equity Dividend Discount Model (Po) References (Chicago style) Presentation and layout (formatting) Cover page, Table of Contents, Headings and Subheadings Font: Calibri Font Size: 11

Answer rating: 100% (QA)

RioTinto Stock Analysis Report 1 Introduction Rio Tinto Group RIO is a leading global mining and materials companyThey mineprocessand refine iron orecopperaluminiumdiamondsand other minerals critical ... View the full answer