Individual Project (60%)This is the second part of the equity research analysis
• The word limit is 4,000 words
• It is marked out of 100
You will conduct the following analyses (on the same company that your group selected):
• Accounting Analysis
• Financial Analysis
• Forecasting
• Cost of Capital Analysis
• Valuation
You will include with your individual project the previously submitted group project, after addressing the feedback
provided on that project (you may address the comments with your group mates). The rest of the project must be
completed individually.
Detailed instructions posted on Moodle under “Unit Information”
Individual Project (60%)
Please submit the assignment via Moodle using the Individual Project tool
located under “Assessments”
Your submission should include the following:
• Group project with comments addressed
• A document outlining what changes you have made
pdf
• The individual project report
• All workings and data (.xls or .xlsx)
File naming convention: please name your submission CONAME-NAME.pdf, where:
• CONAME: name of the company
• NAME: your name
Please include a coversheet
A penalty of 1 mark will apply for failure to comply with this naming convention
ACF5130: Financial Statement Analysis and Business Valuation
Monash University: Monday 2:30pm-4:00pm tutorial
TA: Dr. Sandip Dhole
Sebastian Shi Hao Yeo – 32951868, Jain Song – 30229189, Wai Kei Wong – 33414033,
Fanqi Xu – 29193907
Assignment: Group submission for Allkem Limited (Equity Research Analysis part 1.)
Word count excluding references: 2868
Table of Contents
Company Introduction …………………………………………………………………………………………2
Capital Market Analysis ……………………………………………………………………………………….2
Significant events ……………………………………………………………………………………………….3
Business Analysis ………………………………………………………………………………………………..3
Management Quality and Corporate Governance Analysis …………………………………………5
Conclusion …………………………………………………………………………………………………………7
Appendix …………………………………………………………………………………………………………10
1
Company Introduction
Resultant of a horizontal merger in 2021 between Galaxy resources Ltd., and Orocobre ltd.
In 2006, Allkem Ltd., (AKE) is an Australian metals and mining industry currently dual listed
on the ASX and the TSX 1. It is current run by CEO Martin Perez De Solay and has its primary
headquarters in Brisbane and its international headquarters in Buenos Aeries. As part of
their main business operations, they deal with minerals and metals explorations, mining,
processing of lithium through lithium brine operations and lithium hydroxide conversions
(Allkem, 2023). Regarding financials, Allkem reported a market cap of $7.396bn and total
revenue of $1.164bn2 for the trailing twelve months (TTM) where it secured a market share
of 5.4% within the “battery material mining in Australia.” However, it is a relatively small
component of the market as its major competitors include: Windfield Holdings, Pilbara
mines and Mineral resources. Comparatively, Windfield Holdings comprised 23% of market
share and reported revenues of $2.43bn, Pilbara Mines Ltd. comprised 20.7% with a
revenue of 1.19bn and market cap of $11.87bn, and Mineral Resources Ltd., reported 15.6%
of market share, revenue of $3.53bn and a market cap of $15.84bn 3 (Ibis World, 2023).
Despite its small composition within the broader industry compared to its competitors,
Allkem as a newly merged company has set clear goals for growth and increased global
presence. Such of which includes projects like the three phase extensions for drilling at Mt
Cattlin, the James Bay Project as well as the Olaroz project and Sal de Vida projects in the
coming years.
Capital Market Analysis
For the capital market analysis, the basis of comparison will be between the “All ordinaries
index” (AORD) and using monthly values4. From 1st April 2022 to 1st March 2023, reported a
negative return for share price of 14.04% from $12.25 to $10.53 whilst the AORD tracked a
positive return from $7118.20 to $7724.80 TTM yielding 8.52%. Additionally, with a derived
market adjusted return of -22.56%, ’s share price grossly underperformed versus the market
index. With an expected return of 12.27%, ’s abnormal return yielded -26.31% which
showed that underperformed relative to expectations. This however was not surprising as
depicted by the movements from trough to peaks for “Allkem vs AORD” (figure 6.) and
when considering the beta value of 1.44 for Allkem, the volatility compared to the market
was no surprise. Furthermore, when comparing the abnormal return of -26.31% vs the
market adjusted return of Allkem at -22.56%, we can see that Allkem’s underperformance
was congruent with one another regarding its expectations.
1 Listed on ASX in 2007 and TSX in 2010.
2 Referring to as total revenue excluding interest.
3 Note that financial information regarding Windfield Holdings was limited – no reporting of market cap, due to
its position as a private holding company. However, considering its market share, we can assume that it’d be
larger than AKE and its competitors.
4 Share prices are monthly closing values from the 1st April 2022 until 1st March 2023 shown in figure 1.and 2.
2
Regarding the risk adjusted return, the primary means of analysis will be based on the
sharpe ratio. Assuming an average stock return of -0.003415579, the risk-free rate as 0, and
a standard deviation of 0.148237435, the ratio returned -0.079817308 which is consistent
expectations regarding the sharpe ratio. For the bid ask spread analysis, both Pilbara
Minerals Ltd., (PLS) and Mineral Resources Ltd., (MIN) managed similar bid ask spreads
however we can see that MIN has the lowest average spread at 0.9411 compared to AKE
and PLS at $1.0027 and $1.2628 respectively5. As a smaller bid ask spread is assumed to
confer greater liquidity, MIN can be assumed to have more liquidity than Allkem and then
PLS. Finally, regarding average volume, PLS reported the greatest amount at 620729641.3
while MIN reported 22576977.17 and AKE at 86528820 shares. As a measure of the
potential for a stock, high average volume serves as an indication of a stocks interest as the
greater movement. Consequently, there seems to be greater liquidity and interest for
Allkem’s competitors during this time.
Significant events
The two significant events that took place last year were the Allkem’s acquisition of a
strategic lithium tenement on the 16th of December 2022 as well as the federal confirmation
of the James Bay operations on the 13th of January 2023. For the acquisition of the lithium
tenement, it involved the sale of Borax Argentina S.S to Golden Wattle Springs Pty Ltd for
100% ownership of the Maria Victoria Tenement 6. In this case, the share price from
December 16th, 2022, onwards dropped from $12.36 before bottoming out at $11.09 (Yahoo
finance, 2023). Whilst this may have been due to concerns regarding Allkem engaging in less
diversification regarding its services provided, it would in the long term allow to add
efficiency to the development of the Olaroz project and add to future expansion of global
production for lithium brine resources (Allkem, 2023). In turn, leading to a possible increase
in share price during the longer term. Similarly, the Canadian government in January 2023,
approved the operations and opening of the James Bay lithium mine in Quebec. Upon its
announcement, share prices began its increase until reaching a high of $14.03 per share
within the following month. For its longer-term impacts, share price is also expected to
increase as the project takes advantage of the EV boom. Namely, its proximity to EV markets
in NA and Europe along with ESG practices aim to provide sustainable growth prospects
globally.
Business Analysis
The primary focus of the business analysis is comprised of a macroeconomic approach as
well as an industry-based analysis along with Allkem’s business strategy. Macroeconomic
5 See figure 4. and figure 5. for summary and calculations.
6 Note that although both have exchanged full ownership, AKE will still retain portions of the Borax pipelines
for other endeavours such as the Sal De Vida Project.
3
factors being GDP, inflation, fiscal policy, employment, and interest rates (IR). From 2017 to
2021, Australia’s nominal GDP grew by 2.1% from 2021 to 2022 (ABS, 2023), with Allkem
being able to follow suit increasing NPAT from $-89.5m to $337.2m (Orocobre annual
report, 2021; Allkem annual report 2022). Furthermore, inflation from 2017-2022 increased
from 1.9% to 7.8%. However, there was no evidence to prove that Allkem’s revenue
increase was related to the inflation rate. Rather, their increase in revenue can be attributed
to the increased by 1.1 percentage point along with exports (RBA,2023)7. With global
demand for lithium expected to increase by 300% by 2030 for net emission targets, it may
be another plausible reason for their improved performance (Azevedo et al., 2022).
Additionally, the unemployment rate dropped from 6.3% in 2021 to 4.2% in 2022 as
supported by an increase in employment to population ratios of 1.6%. With the current cash
rate target at 0.1 in 2021, the current contractional fiscal stance of the Australian
government has resulted in a new target of 3.6% (RBA, 2023). As Allkem is a mining
company that requires intensive funding and capital, they have been revising their business
strategy by reducing debt liability and increasing free cash flows (FCF) – such that they are
able to expand and scale their projects in a more sustainable manner (Allkem annual report,
2022).
Regarding the macroeconomic factors, other market wide and industry factors should also
be considered – analysis of which is done via Porter’s five forces. Within the battery
materials mining industry, lithium comprises the largest product segment, of which Allkem
is a major supplier of. From 2018-2023, both annual wage growth and annual employment
growth are expected to rise by 6.2% and 5.7% respectively, demonstrating the high upside
should Allkem capitalise on the EV boom. The Australian government too has implemented
the “Critical Minerals Strategy” such that the mining sector grows and expands so
downstream processing ability increases (Thomson, 2023). Whilst lithium in general is in
demand, Allkem shifting its focus on brine operations and lithium hydroxide refineries
would allow them to gain a larger premium versus spodumene exports that its competitors
deal in (IbisWorld, 2023).
With Allkem being the fourth largest dominating company within the industry, there is also
little risk of threat from new entrants due to high barriers to entry and stringent regulation.
With lithium being a major component for batteries and EV, Allkem faces little threat for
substitute products, and even competition from the other firms since it deals in all key
lithium operations8. In the case where there is a substitute for EV and batteries, then there
would be a significant impact on Allkem and the industry’s profitability as the main
justification for lithium were for those two uses. Finally, when concerning the bargaining
power of suppliers against buyers, suppliers like Allkem generally have the upper hand. With
the battery material mining industry being dominated by 4 primary firms competition
7 See figure 8. for graphical depiction of inflation trends.
8 Includes Lithium brine operations, hard rock lithium operations and lithium hydroxide conversions.
4
mainly revolves between them where they collectively act as price setters. Additionally, as
there are only a few suppliers with no substitute for lithium, the bargaining power of
suppliers is high. Consequently, the bargaining power of buyers is considered weak9. In
addition to the reasons supporting strong supplier power, weak buyer power can further be
explained by the inability for backward integration, where they are unable to produce
lithium-based products, minerals, and chemicals on their own.
Management Quality and Corporate Governance Analysis
As disclosed in the FY22 Annual Report, since the successful acquisition of Orocobre and
Galaxy in August 2021, Allkem’s operating performance has surged comprehensively,
exploding with strong asset appreciation and synergy effects. Apart from this, the
restructured management team has become more efficient in the operating aspect, mainly
reflected in three areas. Firstly, the newly restructured board consisting of independent
directors suggests that the business decisions will be more objective and impartial, as
independent directors not involved in internal management can be directly protected from
management’s interests. Secondly, the executive team has become more diverse and open,
in terms of gender equity, with members who are not only experts in different skill fields, but
also have rich international management experiences, which will help to realise benefits of
international division of work after a cross-border acquisition. Finally, by adhering to the
business philosophy of sustainable development to bring long-term investment value for
shareholders. For example, the development of corporate strategies links corporate goals into
profits and focus on corporate social responsibility (CSR) and environmental social
governance (ESG) to build up a good corporate reputation and branding. Furthermore,
Allkem’s positive sustainability performance has been widely recognised with continued
inclusion in the Dow Jones Sustainability Indices (DJSI) Australia Index and an improved ‘AA’
in the ESG Rating assessment by Morgan Stanley Capital International (MSCI). Furthermore
CSR results post-merger improved greatly due to managements implementation of a “safety
and culture program” for employees.
Despite these improvements, the management team’s ability to identify future market trends
and respond quickly to the market was lacking. Particularly, labour and equipment shortages
during Q3-Q4 2022 caused a continued decline in production at the Olaroz and MtCattlin
projects and delays in the planning of new projects. Additionally, in late 2022, a weaker supply
and demand situation due to weak demand in the downstream markets not only results in a
sharp decline in product prices directly, but also negatively impacting Allkem’s inventory.
Nonetheless, Allkem believes that its future success is attributable to quality talent, and they
have been ensuring that they attract and retain key quality people10. In doing so, they aim to
increase growth, profits and ultimately the success of the company as it ensures outstanding
LT returns for shareholders, employees, and other stakeholders.
9 Not to the extent where the lack of buyer’s power is significant as although there are few suppliers, they
have a high customer class concentration that deal in larger purchase quantities.
10 Whilst this was the goal, Allkem underwent a managerial structuring where on the 3 rd of October 2022,
former director Robert Hubbard retired and Peter Coleman was sworn in.
5
In observing the FY22 annual report, the pay framework for executives reflects both equity
and flexibility, being a combination of fixed and variable performance-based pay. The entire
framework encompasses both the assessment of long and short-term performance targets
within the company and considers the competitive nature of remuneration in the peers. With
renumeration being defined as: Total salary/compensation = Fixed salary + STI + LTI + Merger
and Retention Bonus. The individual components here being:
1. Fixed salaries basically consist of basic salary and pension.
Due to the merger synergy, the fixed salaries of key management personnel (KMP) in 2022
have increased significantly compared to the past. For example, the fixed salary of the
MD/CEO increases to 20% and the fixed salary of the CFO increases to almost 17.6% (Allkem
Annual report, 2022).
2. STIs (short-term incentives) comprise cash and performance rights and are designed to
promote actual performance against short-term targets. The STI has clear and quantifiable
targets that are set by the Board. The exact amount of it depends on the actual performance
achieved. Of this amount, 50% is paid in cash and the other half is paid in the form of
performance rights with its expiry date is the first two years after the vesting date.
3. LTIs (long-term incentives) is to incentivise KMP for the long-term development of the
Group, as well as to attract and retain executive personnel. The performance of the MD/CEO
is assessed through the performance rights and option plan. It needs to be voted upon at the
General Meeting of Shareholders in November each year.
4. Merger and Retention Bonus is primarily intended to recognise the contribution of the
additional significant time and effort put in by the MD/CEO prior to the successful acquisition
in August 2021 and also acts as a retention mechanism for key management personnel (KMP).
It expires 2 years after the vesting date and 5 years after the grant date (whichever is earlier).
Although there was resistance with 20% of shareholders voting against the retention
mechanism and the increase in executives’ salaries at the 2022 Annual General Meeting
(AGM), both the retention mechanism and the increase in management compensation
proved to play important roles in incentivising growth and targets post-merger.
With many within the battery and minerals industry trying to maximise benefit from the shift
to sustainable energy, competition for executive talent remains high. Consequently,
companies must aim to be sufficiently competitive, flexible, and incentivised to attract and
retain KMPs. Here there are two Australian listed energy firms with similar business lines (IGO
and MIN) and Allkem (AKE) selected for salary comparison. As shown by all three groups MIN,
IGO and AKE in figure 10., two common categories of remuneration were the fixed and
variable renumerations. In terms of fixed remuneration, Allkem is more aligned with the
international labour market and is slightly higher than the latter two in terms of USD, as
shown in the FY22 annual report. Meanwhile, both STI and LTI are available in the variable
remuneration section. Yet, the differences are twofold. One is that Allkem seems more
competitive as it has an additional special allowance for recruiting and retaining KMPs than
6
IGO 11 and MIN. The other difference is that the LTI for Allkem’s competitors are being
assessed in a different way. Allkem’s LTI is approved by the AGM through performance rights
options plans (PROP), where 60% of the LTI is assessed on productivity hurdle and the
remaining 40% is assessed on relative total shareholder return (RTSR) hurdle. The latter two
companies’ LTIs however are approved by the respective board and are both assessed based
on improving long-term ROI rather than RTSR.
Conclusion
Allkem as a company aims to provide a sustainable future by means of speciality lithium
chemicals and operations useful to battery production. With numerous global projects
approved and underway, their vision involves a global transition towards a net zero carbon
future by 2050 (Allkem annual report, 2022). In doing so, they aim to not just achieve their
performance objectives but to also do so by reducing their own operational emissions in the
coming years. Such examples would include the James Bay project in Quebec where they
plan to utilise hydro energy to subsidise 44% of the plant operations (Allkem financial
results, 2022). Furthermore, in line with many upcoming projects occurring on a global
scale, Allkem has placed emphasis on creating fair workplace environment, respecting the
diversity of its employees without gender discrimination or racial discrimination. Coupled
with a quality working environment employee wellbeing remains well taken care of by
including competitive salaries, additional employee benefits, paid holidays, etc. Moreover,
the company takes employee safety extremely seriously and has developed detailed injury
and illness classifications and solutions for this, which are based entirely on ICAA guidelines.
Thus, we can observe that Allkem’s values and purpose ties in well with their corporate
culture, ensuring sustainability and wellbeing of not just the environment but for their
workplace community as well (Allkem annual report, 2022).
11 Note that Windfield holdings, the top contributor by market share to the industry was not used as a basis for
renumeration comparison due to its status as a private company.
7
References
Australian Bureau of Statistics. (2022, December). Consumer price index, Australia,
December Quarter 2022. Retrieved April 20, 2023, from
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-priceindex-australia/latest-release
Allkem Annual Report 2022. (n.d.). Retrieved from https://www.datocmsassets.com/53992/1664258089-all006-annual-report-2022-v5-final-for-asx-release.pdf
Allkem Corporate Governance statement 2022. (n.d.). Retrieved from https://www.datocmsassets.com/53992/1661821281-5-corporate-governance-statement_fy2022.pdf
Australian Parliament. (2022). Treasury Laws Amendment (2022 Measures No. 1) Bill 2022.
Retrieved from
https://www.aph.gov.au/Parliamentary_Business/Bills_LEGislation/Bills_Search_Results/Res
ult?bId=r6876
Allkem Our Company. Allkem. (2023, January 31). Retrieved March 21, 2023, from
https://www.allkem.co/about/our-company
Allkem Sustainability Reporting 2022. (n.d.). Retrieved from https://www.datocmsassets.com/53992/1678398986-fy22-sustainability-report-allkem-english.pdf
Allkem Financial Results 2022. (n.d.). Retrieved from https://www.datocmsassets.com/53992/1661387600-3-ake-ye-fy22-results-investor-presentation-ir.pdf
IBISWorld. (n.d.). Industry data for the OD5541 Industry – Specialized in Australia. Retrieved
March 22, 2023, from https://my.ibisworld.com/au/en/industry-specialized/od5541/keystatistics#industry-data
Minerals Council of Australia. (2023). Mining towards net zero mining towards net zero.
Retrieved April 20, 2023, from https://minerals.org.au/policies/energy-and-climatechange/mining-towards-net-zero/
Morningstar. (n.d.). Allkem Ltd (AKE). Morningstar. https://datanalysis-morningstar-comau.ap1.proxy.openathens.net/af/company/pricesensmeasures?ASXCode=AKE&xtmlicensee=datpremium
Trading Economics. (2023). Australia unemployment RateMarch 2023 data – 1978-2022
historical – April forecast. Australia Unemployment Rate – March 2023 Data – 1978-2022
Historical – April Forecast. Retrieved April 20, 2023, from
https://tradingeconomics.com/australia/unemployment-rate
Trading Economics . (2023). Australia government bond 10y2023 data – 1969-2022 historical
– 2024 forecast. Australia Government Bond 10Y – 2023 Data – 1969-2022 Historical – 2024
Forecast. Retrieved April 20, 2023, from
https://tradingeconomics.com/australia/government-bond-yield
8
Wikipedia. (2022, September 8). Allkem. In Wikipedia. Retrieved September 10, 2022, from
https://en.wikipedia.org/wiki/Allkem
Yahoo Finance. (2023). Pilbara Minerals Limited (PLS.AX) Historical Data. Retrieved March
21, 2023, from
https://au.finance.yahoo.com/quote/PLS.AX/history?period1=1648771200&period2=167935
6800&interval=1mo&filter=history&frequency=1mo&includeAdjustedClose=true
Yahoo Finance. (2023). Mineral Resources Limited (MIN.AX). Retrieved March 21, 2023, from
https://au.finance.yahoo.com/quote/MIN.AX?p=MIN.AX&.tsrc=fin-srch
Yahoo Finance. (2023). Ark Mines Limited (AKE.AX). Retrieved March 21, 2023, from
https://au.finance.yahoo.com/quote/AKE.AX?p=AKE.AX&.tsrc=fin-srch
9
Appendix
Figure 1. Monthly share prices for AORD AND ALLKEM (2022-2023). From Yahoo Finance.
Retrieved from https://au.finance.yahoo.com/quote/.AX/financials?p=.AX.
Figure 2. Monthly share prices for AORD AND (2022-2023). From Yahoo Finance. Retrieved
from https://finance.yahoo.com/quote/%5EAORD/history?p=%5EAORD.
Figure 3. Regression analysis for the AORD and share prices.
10
Figure 4. Bid – ask spread values as an average, and average volume including competitors
Mineral Resouces Ltd., and Pilbara Minerals Ltd.
Figure 5. Calculations including returns, standard deviation, and the Sharpe ratio.
Figure 6. ASX comparison with AORD YTD. From Yahoo Finance. Retrieved from
https://finance.yahoo.com/quote/%5EAORD?p=%5EAORD.
11
Figure 7. Sharpe ratio calculation.
Figure 8. Australia target cash rate (%). From ABS (2023). Retrieved from
https://www.rba.gov.au/inflation/inflation-target.html
Figure 9. Regional breakdown for Allkem’s sales during 2021-2022. From MarketScreener
(2023). Retrieved from https://www.marketscreener.com/quote/stock/ALLKEM-LIMITED7814271/company/
Figure 10. Renumeration comparisons between AKE, IGO and MIN (2022).
12
Date
AKE
4/1/2022
5/1/2022
6/1/2022
7/1/2022
8/1/2022
9/1/2022
10/1/2022
11/1/2022
12/1/2022
1/1/2023
2/1/2023
3/1/2023
PLS
12,25
13,71
10,31
11,28
13,91
13,85
14,44
13,65
11,24
12,98
11,35
10,28
LTR
2,775534
2,872921
2,230166
2,697625
3,554632
4,440855
4,957007
4,538242
3,652019
4,625891
4,061045
3,428028
market return
1,465
1,415
1,055
1,32
1,735
1,49
1,885
1,935
1,32
1,57
1,36
1,5
7724,8
7455,2
6746,5
7173,8
7226,1
6678,7
7054,8
7480,7
7221,7
7686,1
7458
7142,2
monthly average STD
Rfr
annual std
market annual-0,0754194
return
average monthly return
annual return
annual risk adjusted return
annual return
annual market-adjusted return
annual risk adjusted return
__________
AKE
PLS
LTR
0,119183673
0,035087662
-0,034129693
-0,247994165
-0,223728742
-0,254416961
0,094083414
0,209607267
0,251184834
0,233156028
0,317689449
0,314393939
-0,004313444
0,249314978
-0,141210375
0,042599278
0,116228069
0,265100671
-0,054709141
-0,084479405
0,026525199
-0,176556777
-0,195278921
-0,317829457
0,15480427
0,26666674
0,189393939
-0,125577812
-0,122105341
-0,133757962
-0,094273128
-0,155875397
0,102941176
0,149404363
0,202950062
0,218537697
0,035
1,23697E-10
4,88281E-09
1,18663E-08
-0,005417982
0,037556942
0,024381392
-1,6081632653E-01 2,3508773447E-01 2,3890784983E-02
-1583031385,47
40977948,17
-936196,54
AKE
PLS
LTR
-0,160816327
0,235087734
0,023890785
-0,085396898
0,310507163
0,099310213
-1,5830313855E+09 4,0977948166E+07 -9,3619653992E+05
Date
AKE
3/21/2022
3/28/2022
4/4/2022
4/11/2022
4/18/2022
4/25/2022
5/2/2022
5/9/2022
5/16/2022
5/23/2022
5/30/2022
6/6/2022
6/13/2022
6/20/2022
6/27/2022
7/4/2022
7/11/2022
7/18/2022
7/25/2022
8/1/2022
8/8/2022
8/15/2022
8/22/2022
8/29/2022
9/5/2022
9/12/2022
9/19/2022
9/26/2022
10/3/2022
10/10/2022
10/17/2022
10/24/2022
10/31/2022
11/7/2022
11/14/2022
11/21/2022
11/28/2022
12/5/2022
12/12/2022
12/19/2022
12/26/2022
1/2/2023
1/9/2023
AORD
11.01
7689.9
12.4
7785.9
13.09
7772
13.52
7822.2
12.76
7768.2
12.25
7724.8
12.05
7467.6
11.1
7307.7
13.05
7391
14.01
7413.1
11.87
7472.4
10.84
7145.2
9.85
6663.3
10.09
6762.4
10.25
6720.4
10.46
6877
9.76
6798
10.24
7011.8
11.28
7173.8
11.79
7250.3
12.4
7288.8
12.34
7358.7
13.91
7345.8
13.2
7056.3
15.95
7139
15.07
6975.2
14.86
6788.7
13.85
6678.7
14.74
6976.1
14.56
6948.6
14.65
6869.9
14.07
6973.5
14.94
7089.3
16.18
7305.1
14
7354.7
13.17
7447.6
14.39
7503.5
13.1
7406.3
12.36
7336.5
11.6
7287.8
11.24
7221.7
11.91
7308.8
12.47
7540.1
Date
AKE return
AORD return
3/21/2022
3/28/2022
0.126248865 0.012483907
4/4/2022
0.055645161 -0.001785279
4/11/2022
0.032849503 0.006459084
4/18/2022
-0.056213018 -0.006903429
4/25/2022
-0.039968652
-0.00558688
5/2/2022
-0.016326531
-0.03329536
5/9/2022
-0.078838174 -0.021412502
5/16/2022
0.175675676 0.011398935
5/23/2022
0.073563218 0.002990123
5/30/2022
-0.152748037 0.007999352
6/6/2022
-0.086773378 -0.043787806
6/13/2022
-0.091328413 -0.067443878
6/20/2022
0.024365482 0.014872511
6/27/2022
0.015857284 -0.006210813
7/4/2022
0.020487805 0.023302184
7/11/2022
-0.066921606 -0.011487567
7/18/2022
0.049180328 0.031450427
7/25/2022
0.1015625 0.023103911
8/1/2022
0.045212766 0.010663804
8/8/2022
0.051738762 0.005310125
8/15/2022
-0.00483871 0.009590056
8/22/2022
0.127228525 -0.001753027
8/29/2022
-0.051042416 -0.039410275
9/5/2022
0.208333333 0.011720023
9/12/2022
-0.055172414
-0.02294439
9/19/2022
-0.01393497 -0.026737585
9/26/2022
-0.067967699 -0.016203397
10/3/2022
0.064259928 0.044529624
10/10/2022
-0.012211669 -0.003942031
10/17/2022
0.006181319 -0.011326023
10/24/2022
-0.039590444 0.015080278
10/31/2022
0.061833689 0.016605722
11/7/2022
0.082998661 0.030440241
11/14/2022
-0.13473424 0.006789777
11/21/2022
-0.059285714 0.012631379
11/28/2022
0.092634776 0.007505774
12/5/2022
-0.089645587 -0.012953955
12/12/2022
-0.05648855 -0.009424409
12/19/2022
-0.061488673 -0.006638043
12/26/2022
-0.031034483 -0.009069953
1/2/2023
0.059608541 0.012060872
1/9/2023
0.047019312 0.031646782
1/16/2023
1/23/2023
1/30/2023
2/6/2023
2/13/2023
2/20/2023
2/27/2023
3/6/2023
3/13/2023
3/20/2023
3/22/2023
12.8
13.87
13.13
12.62
11.89
11.88
12.36
11.38
10.53
10.09
10.55
7666.3
7709.5
7771.8
7631.1
7552.2
7512.7
7484
7348.2
7188.2
7142.2
7208.4
1/16/2023
1/23/2023
1/30/2023
2/6/2023
2/13/2023
2/20/2023
2/27/2023
3/6/2023
3/13/2023
3/20/2023
3/22/2023
STDEV
COVARIANCE
Beta
0.026463512
0.08359375
-0.053352559
-0.038842346
-0.057844691
-0.000841043
0.04040404
-0.079288026
-0.074692443
-0.041785375
0.045589693
0.076105731
0.000836333
0.000413125
2.024406119
cyclical(beta>1)
0.016737179
0.005635052
0.008080939
-0.018103914
-0.01033927
-0.005230264
-0.003820198
-0.018145377
-0.02177404
-0.006399377
0.009268853
0.020325478
0.25
0.2
0.15
0.1
0.05
0
-0.05
-0.1
-0.15
-0.2
Topic
N (< 50)
P (50 - 59)
C (60 - 69)
D (70 - 79)
HD (> 80)
Group Project Revision
Responded to less than 50% of the feedback points for
Carefully responded to 50% – 60% of the feedback points for
Carefully responded to 60% – 70% of the feedback points
Carefully responded to 70% – 80% of the feedback points
Carefully responded to more than 80% of feedback points for the Group Project
the group project
the Group Project
for the Group Project
for the Group Project
Limited or no analysis
Basic analysis of earnings quality
Detailed analysis of earnings quality
Some discussion of earnings quality proxies
Comprehensive analysis:
OR
Rudimentary analysis of the relation between net income and cash flow
Analysed the relation between net income and cash flow
Detailed analysis of earnings quality
Properly explained earnings quality proxies
Did not attempt
from operations
from operations
Analysed the relation between net income and cash flow from
Detailed analysis of earnings quality
Provided earnings management tests without proper
Provided earnings management tests without proper
operations clearly
Clearly explained and analysed link between net income and cash flow from operations
explanation or tabulation
explanation
Detailed analysis of earnings management
Clearly explained earnings management proxies
Poor discussion of red flags
Basic discussion of red flags
Some discussion of red flags
Detailed analysis of earnings management
Limited discussion of past leases
Discussion of leases without a clear explanation of assumptions
Clearly explained assumptions about past lease assets, liabilities
Comprehensive discussion of red flag investigations
Little or no discussion of disclosure quality
Some discussion of disclosure quality
depreciation and finance costs
Stated all assumptions for estimating past lease assets and liabilities, lease
Clearly discussed the extensiveness of disclosure in notes
depreciation and finance costs
and line items
Tabulated past lease assets, liabilities, depreciation and finance costs
OR
Did not attempt
Accounting Analysis
Comprehensive discussion of the extensiveness of disclosure in notes and line items
Financial Analysis
Limited or no discussion and analysis
Presented Simple DuPont Results without discussion
Basic discussion of Simple DuPont Analysis and interpretation of results
Some discussion of Simple DuPont Analysis and interpretation of results
Clear discussion of Simple DuPont Analysis with proper interpretation of findings
OR
Presented Advanced DuPont Results without discussion
Basic discussion of Advanced DuPont Analysis and interpretation of results
Some discussion of Advanced DuPont Analysis and interpretation of results
Presentation of Reformulated Income Statement and Balance Sheet
Did not attempt
Basic analysis of asset management ratios
Some discussion of asset management ratios
Explained the choice of some asset management ratios
Clear discussion of Advanced DuPont Analysis with proper interpretation of findings
Basic analysis of liquidity and solvency ratios
Some discussion of liquidity and solvency ratios
Clear comparison of asset management ratios
Lucid explanation of the choice of asset management ratios
Explained the choice of some liquidity and solvency ratios
Clear comparison of asset management ratios
Clear comparison of liquidity and solvency ratios
Detailed explanation the choice of liquidity and solvency ratios
Clear comparison of liquidity and solvency ratios
Forecasting
Limited or no discussion
Carefully explained growth assumptions for 60% – 70% line items
Carefully explained growth assumptions for 60% – 70% line items
Carefully explained growth assumptions for 70% – 80% line items
Clearly explained growth assumptions for 80% or more line items
OR
Presented pro-forma Income Statements and partial Balance Sheets
Clearly explained the choice of forecast horizon
Justified the choice of forecast horizon
Justfied the choice of forecast horizon
Presented pro-forma Income Statements and partial Balance Sheets
Presented pro-forma Income Statements and partial Balance Sheets
Presented pro-forma Income Statements and partial Balance Sheets
Did not attempt
Cost of Capital Analysis Limited or no discussion
Valuation
Incorrect estimation of beta but model is correct and/or
Calculated beta correctly but provided no discussion of methodology
Calculated beta correctly and provided some discussion of methodology
Calculated beta correctly and clearly explained the methodology
OR
Incorrect estimation of cost of equity but model is correct and/or
Estimated the cost of equity correctly but did not discuss the model
Estimated the cost of equity correctly and provided some discussion of the
Estimated the cost of equity correctly and clearly explained the parameters of the model
Incorrect model
Incorrect estimation of cost of debt but model is correct and/or
Estimated the cost of debt correctly but did not discuss the assumptions
model
Estimated the cost of debt correctly and clearly stated the assumptions
OR
Incorrect estimation of weighted average cost of capital but model
Correctly estimated the weighted average cost of capital
Estimated the cost of debt correctly and stated the assumptions
Correctly estimated the weighted average cost of capital
Did not attempt
is correct
Correctly estimated the weighted average cost of capital
Clearly stated the source of data
Limited or no discussion
Basic discussion of the valuation models
Some explanation of the valuation models
Clearly explained the valuation models but did not justify choice of model
Justified the choice of valuation models and explanation of the models
OR
Tabulated the results
Some explanation of the valuation models
Clear discussion of terminal value assumptions and tabulation of results
Clear discussion of terminal value assumptions and tabulation of results
Incorrect model
DCF Valuations differ by more than 15%
DCF valuations are close (+/- 15% of one another)
DCF valuations are close (+/- 10% of one another)
DCF valuations are close (+/- 5% of one another)
OR
Basic discussion of relative valuation
Some discussion of relative valuation
Clear discussion of relative valuation but did not explain choice of multiple
Clear discussion of relative valuation including choice of multiples
Did not tabulate results
Did not provide a stock recommendation
Provided a clear stock recommendation
Provided a clear stock recommendation
Insightful explanation of differences between DCF and relative valuation
OR
Provided a clear stock recommendation
Did not attempt
Conclusion
Identified limitations of less than 2 parts of the analysis in
Did not summarise the project
Brief summary of the project
Clearly summarised the project
Clearly summarised the project
the individual project
Identified limitations of 2-3 parts of the analysis in the individual project
Identified limitations of 2-3 parts of the analysis in the individual project
Identified limitations of 3-4 parts of the analysis in the individual project
Identified limitations of 4-5 parts of the analysis in the individual project
OR
Did not attempt
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