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Financial Investment Advise Eden Consultancy Ltd

Question

You have recently been hired as a part time trainee analyst by Eden Consultancy Limited (ECL). Sonia Fisher, the owner of the firm and your immediate supervisor has been approached by a client, Aroha Toi for financial advice. Aroha has recently received $10,000 from her grandmother’s estate and would like to invest this money in the share market. She is interested in investing in the electricity industry as friends have advised her that this industry seems to be doing very well. Sonia has asked you to investigate the electricity industry in NZ and ONE company from this industry listed on the NZ Stock Exchange (NZX). She has asked you to write her a report based on your findings. In your report you are to make a recommendation as to whether the electricity industry is a good industry to invest in at present. You are also to make a recommendation as to whether Aroha should buy shares in the company you have investigated. My chosen electricity industry is Trust Power Limited (TPW).

You are required to write a report in which you:

  • Draw conclusion based on your findings
  • Make recommendations based on finding and conclusion

Statistics

  • Retrieve data on electricity generation in NZ from the Ministry of Economic Development website (http://www.med.govt.nz)
  • Go to Energy and Resources > Energy Information > Energy Data > Electricity > Tables > Table 2a: Net Electricity Generation by Fuel Type (GWh) > Table 2a: Net Electricity Generation by Fuel Type (GWh) [80kB XLS] > Quarterly GWh
  • Use the Total generation starting at the March quarter, 2002.
  • Analyze the data to find adjusted seasonal indices for each quarter, and seasonally adjust the data.
  • Forecast quarterly total Electricity generation up to the March quarter of 2011.
  • Present a concise spreadsheet showing your calculations and one full page graph showing the data, centered moving average, seasonally adjusted data and your forecast. You could include a smaller copy of your graph in your discussion of findings. Include on the spreadsheet a justification of any assumptions you make in your analysis.
  • Use the CPI to deflate one of the accounting elements you are using in your Accounting analysis of trends. Show your analysis on a spreadsheet and graph.

Accounting

  • Retrieve the financial statements of your chosen company for a number of periods, including the latest accounting period and analyze the trends shown (by using appropriate graphs) in terms of one or more accounting elements such as income, assets etc.
  • Analyze the financial statements of your chosen company by calculating the key ratios for the two latest accounting periods on business performance (profitability and efficiency ratios), and financial stability (liquidity and financial structure ratios).
  • Analyze the company performance and value from the perspective of a prospective investor such as Aroha by using investor (market) ratios.

Finance

  • Retrieve share market data on the listing of your chosen company and analyze the data in terms of number of shares, share price, market capitalization, type of shares etc.
  • Compare and analyze the shares of your chosen company by finding at least two share brokers valuations/recommendations for the company’s shares.
  • Analyze the share price performance of the company by comparing it with the performance of the stock market index (NZX50). Using a graph show changes in the value of a $10,000 investment in the company shares against the market (NZX50) over a period of time.
  • Analyze the bond listing of the company in relation to how much is owed and the financial risk.

 

Summary

The question belongs to Financial Management. The question is about a financial advisor company which advices people about investing. In this question a person who is interested in investing in electrical industry, approaches the financial advisor company. A research into the background of an electrical company is done on behalf of the person. The solution contains all the details including statistical analysis, financial analysis, etc.

Total word count is 2206

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Comments

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