acct 1b w1 seminar question
ACCT1511 REVISITING FINANCIAL STATEMENT ANALYSIS (1)
SEMINAR QUESTION: FINAL EXAM SEMESTER 1, 2014
Question 7 (6 marks)
The following information regarding five airlines, were obtained from Yahoo!Finance, reuters.com and company financial statements:
Five year relative stock price chart. (base of zero as at 30 Mar 2009):
Cathay
Singapore
Qantas
China
Southern
Malaysian
Price
EPS
Company
Stock code 24 Mar 2014 (TTM)
Qantas Airways
QAN.AX
AUD1.055
–0.15
Cathay Pacific Airways
0293.HK
HKD15.10
1.01
Singapore Airlines
C6U.SI
SGD10.95
0.34
China Southern Airlines 600029.SS
CNY2.54
0.25
Malaysian Airlines
3786.KL
MYR0.24
–0.07
Note: TTM = trailing twelve months; FYE= financial year end
Performance Ratios (TTM, except for Leverage at most recent FYE)
Profit
Company
Sales Growth Margin
ROE
Qantas Airways
–2.237%
–2.18%
–5.85%
Cathay Pacific Airways
1.11%
2.89%
4.41%
Singapore Airlines
0.96%
3.05%
3.04%
China Southern Airlines
–2.83%
3.37%
7.18%
Malaysian Airlines
9.49%
–8.03%
–38.12
Price-to- MarketCap
Book
(AUD)
0.40
2.27B
0.95
8.39B
0.91
10.64B
0.72
4.12B
0.95
1.26B
Leverage Current
Ratio
Ratio
29.48%
0.69
36.73%
0.96
59.06%
1.34
27.89%
0.46
18.5%
0.79
1
Question 7 (continued)
Required:
(a) You are considering the investment in one of the above airline companies. Choose one (1) of the airline companies listed. What would be your price target and recommendation? Show your calculations and round to nearest cent (2 marks):
Company chosen:
Peer company:
(no marks but for reference purposes in calculating price target)
Price target (2 marks):
Recommendation: (no marks but must be consistent with price target to obtain marks for price target)
DO NOT WRITE OUTSIDE THE BOX
2
Question 7 (continued)
(b) Give TWO (2) reasons in support of the above stock price target (1 marks for each reason): 1.
2.
DO NOT WRITE OUTSIDE THE BOX
(c) In financial statement analysis, it is important to consider special situations or context that may affect your analysis. Give TWO (2)
SEMINAR QUESTION: FINAL EXAM SEMESTER 1, 2014
Question 7 (6 marks)
The following information regarding five airlines, were obtained from Yahoo!Finance, reuters.com and company financial statements:
Five year relative stock price chart. (base of zero as at 30 Mar 2009):
Cathay
Singapore
Qantas
China
Southern
Malaysian
Price
EPS
Company
Stock code 24 Mar 2014 (TTM)
Qantas Airways
QAN.AX
AUD1.055
–0.15
Cathay Pacific Airways
0293.HK
HKD15.10
1.01
Singapore Airlines
C6U.SI
SGD10.95
0.34
China Southern Airlines 600029.SS
CNY2.54
0.25
Malaysian Airlines
3786.KL
MYR0.24
–0.07
Note: TTM = trailing twelve months; FYE= financial year end
Performance Ratios (TTM, except for Leverage at most recent FYE)
Profit
Company
Sales Growth Margin
ROE
Qantas Airways
–2.237%
–2.18%
–5.85%
Cathay Pacific Airways
1.11%
2.89%
4.41%
Singapore Airlines
0.96%
3.05%
3.04%
China Southern Airlines
–2.83%
3.37%
7.18%
Malaysian Airlines
9.49%
–8.03%
–38.12
Price-to- MarketCap
Book
(AUD)
0.40
2.27B
0.95
8.39B
0.91
10.64B
0.72
4.12B
0.95
1.26B
Leverage Current
Ratio
Ratio
29.48%
0.69
36.73%
0.96
59.06%
1.34
27.89%
0.46
18.5%
0.79
1
Question 7 (continued)
Required:
(a) You are considering the investment in one of the above airline companies. Choose one (1) of the airline companies listed. What would be your price target and recommendation? Show your calculations and round to nearest cent (2 marks):
Company chosen:
Peer company:
(no marks but for reference purposes in calculating price target)
Price target (2 marks):
Recommendation: (no marks but must be consistent with price target to obtain marks for price target)
DO NOT WRITE OUTSIDE THE BOX
2
Question 7 (continued)
(b) Give TWO (2) reasons in support of the above stock price target (1 marks for each reason): 1.
2.
DO NOT WRITE OUTSIDE THE BOX
(c) In financial statement analysis, it is important to consider special situations or context that may affect your analysis. Give TWO (2)