Business Finance – Accounting

1. Purpose

The final group project aims to provide students with a basic understanding of the financial statements, in particular, the annual report. Students should be able to analyze and evaluate various aspects of the financial statements, with emphasis on the topics discussed in the course.

2. Assessment and Submission

The final group project report carries 15% of the total marks of the course. It will be graded on the contents and the level of analyses. Each group is required to submit a final group project report

Late submission will not be entertained.

3. Company Assignment

You need to work with an assigned group and choose a firm in the attached list of Korean firms (see Appendix A). Your group needs to analyze its latest available annual report. You can refer to Appendix B to know how to get the financial statement data of Korean firms.

4. Format

Each final group project report must include a cover page, listing the following information: project title, instructor’s name, group number and group members’ names. Your group needs to submit a PowerPoint slide as the final group project report. Photocopies of the various sections of the annual report used in the analyses must be appended.

5. Contents

You are required to answer all questions below. You are welcomed to use other sources of information (e.g., company’s website, press release, newspaper clippings, etc.) but they must be properly sourced and noted. Clearly label the questions you are attempting.

6. Questions

a. What are the principal activities of your company?

b. Evaluate the performance of your company on the year under review.

c. Evaluate the liquidity of your company at the end of year under review.

d. Which non-financial information disclosed in the annual report, such as in the management discussion, is most useful and relevant for a further evaluation of your company? Explain.

7. Tips for Analyses

You can select some relevant analysis tools for your answers from the following list of analysis tools. “Chapter14. Financial Statement Analysis” on the textbook will be helpful for the understanding of these analysis tools.

a. Draw up a common-sized income statement/balance sheet of your company. Then conduct the horizontal/vertical analyses.

b. The skill of benchmarking will be helpful: Choose two or three representative comparable firms of your company within same industry. Then compare the common-sized income statement/balance sheet of your company with them of chosen comparable firms on the year under review.

c. Calculate and analyze relevant ratios, such as current ratio, debt ratio, quick ratio, account receivable turnover, inventory turnover, rate of return on sales, rate of return on equity, etc.

Appendix A: The List of Korean Companies

1

Daewoo Engineering & Construction

2

Daewoo Shipbuilding & Marine Engineering

3

Doosan Heavy Industries & Construction

4

GS Engineering & Construction Corp

5

SK Hynix Semiconductor Inc.

6

Hyundai Engineering & Construction

7

Hyundai Heavy Industries

8

Hyundai Mipo Dockyard

9

Hyundai Mobis

10

Hyundai Motor Co.

11

KCC Corporation

12

Kia Motors Corporation

13

Korean Air Lines

14

KT Corporation

15

LG

16

LG Chemicals

17

LG Display

18

LG Electronics

19

Lotte Shopping

20

NHN Corporation

21

POSCO

22

Samsung C&T Corporation

23

Samsung Electronics

24

Samsung Heavy Industries

25

Samsung SDI

26

Shinsegae

27

SK Energy

28

SK Holdings

29

SK Telecom

30

S-Oil Corporation

Appendix B: How to get the annual reports of Korean companies

1. Please go to http://englishdart.fss.or.kr where the annual reports of Korean companies are available. Then, click on “XBRL Financial Statement” and “XBRL Search” on the top menu to search your company’s annual report using a part (or full) of the company name.

2. After choosing the reporting period and clicking on “Search,” you will see the list of various reports. Choose annual report. Click on “Download” on the top menu to get the excel spreadsheet file including main financial statement data.

3. Repeat above procedure to get the financial statement data for several years.

4. You can download the full annual reports from the homepage of your firm (usually under the webpage of “Investor Relations”)

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