Fundamental Analysis

choose firstly an industry and secondly two (2) ASX listed companies in this same industry
upon which to undertake a fundamental analysis. Fundamental Analysis seeks to identify
factors that are likely to influence directional changes in the value of a company and hence its
share price. These factors may be macro or micro in context.
Requirements. The assignment comprises two related sections:
a) Conduct a Top Down analysis of the overall economic environment and consider how
forecast changes in economic fundamentals will impact on the performances of
companies in the industry you have chosen. Consider questions including, but not
limited to: What is the current interest rate? What is the current value of the $AUD?
What is current GDP etc.?
b) Conduct a Bottom Up analysis of companies’ current financial situation. Consider
accounting ratios and measures of a firm’s performance, how these need to be
compared to the industry and company history,
 All of the required information for calculation and often the actual
ratio/number can be found on various websites on the Internet.
 http://www.investsmart.com.au/

Note: When you are performing the fundamental analysis take a less is more approach. Select
a few key performance measures then define each measure; explain what the measure is
supposed to show and then what it is showing for the industry/your companies.
Refer to both your textbook and information available on the Internet. This assignment
involves research to finding the information and then analysing this resulting information.
When writing the report, imagine that your audience are people that know nothing about
finance or the financial markets. At each stage you will need to carefully explain what do are
analysing and why. Do not think that just because your lecturer will know what this ratio
means that you do not have to define it.
You should also give a brief introduction of the industry and the history, mission statement of
your chosen companies. Your paper should conclude with a summary of your findings and
recommendations for each of your companies. Word length is 3000 (+/- 10%).