FINM7409 Financial Management for Decision Makers Semester 1 2023
Assignment 1
Assignment:
Due: 12pm on Friday 5 May 2023. Submit electronically on Blackboard.
Background:
Both Apple Inc. and Xiaomi Corp. are leading smartphone manufacturers globally. At the end of January
2023, Apple Inc. has a leading smartphone market share of 27.63%, while Xiaomi Corp. ranks 3rd with a
market share of 12.51%. On the other, even with only modest market share lead, Apple Inc. dominates in
terms of profitability, with nearly 85% share of the worldwide smartphone market profit.
As an investment manager, you would like to add one of these two companies to your portfolio. However,
before you make the decision, you would like to do a bit more research on both companies. In particular,
you want to analyse both companies for their performances in the past 5 years (2017 to 2022). You are
also interested in knowing why Apple Inc. is so profitable when compared to Xiaomi Corp. and other
smartphone manufacturer. Apart from profitability, you are also interested to understand the liquidity and
solvency of each company. In this assignment, you are required to use the tools you have learned in
FINM7409 including common size and ratio analysis, to analyse the financial statements of these two
companies. Also, you are required to write a short report summarising your key findings. Detailed
requirements are provided below.
Files Provided:
You will find the following files on Blackboard:
Assingment_Template.xlsx
o The income statement and balance sheet information has been provided.
o Complete this file for requirements 1 below.
Apple Inc. FY22 Annual Report.pdf
Xiaomi Corp. FY21 Annual Report.pdf
Both Apple Inc. and Xiaomi Corp. annual reports are for your background information. You do not need
them to conduct the analysis.
Required:
1. Complete the ‘Ratio Analysis’ worksheet and the common size analysis for income statements in
the file ‘Assignment_Template.xlsx’. In doing so, you will need to fill out the missing numbers in
‘Other Inputs’ worksheet. You can use Yahoo Finance to obtain the share price and dividend
information. Note: Do not change the order or the name of the worksheets. For some ratios that are
not covered in this course, you will need to do some research yourself.
2. Using the ratio and common size analysis computed above, write a short essay (no more than 800
words) addressing the following questions. Submit your answer as a pdf file.
a. Compare the liquidity and solvency of Apple Inc. and Xiaomi Corp. for the period between
2018 and 2022. Do you see any issues in any of the companies? You will need to incorporate
graphs of the appropriate ratios showing the trends in your analysis.
FINM7409 Financial Management for Decision Makers Semester 1 2023
Assignment 2
b. For Apple Inc. and Xiaomi Corp. respectively, what are the trends in gross profit margin,
operating income margin and net income margin from 2018 to 2022? What have been the
key drivers for these trends? You will need to incorporate graphs showing the trends in your
analysis.
c. Examining the Return on Equity for both Apple Inc. and Xiaomi Corp., what are the trends?
Adopting the DuPont Analysis framework, explain why you observe such trends in each of
the companies? Why Apple Inc. has much higher Return on Equity? You will need to
incorporate graphs of appropriate ratios showing the comparison between these two
companies over time. Note: You will need to do some research on DuPont Analysis yourself.
Mark Allocation:
Excel Computations (Part 1) 30
Report (part 2) 60
Presentation and Grammar 10
Total 100
Final Submission
The ‘Assignment Submission’ folder on Blackboard contains three submissions:
Part 1 Excel Submission: Submit an excel file containing the answers to parts 1 (use the template
above and re-name the file to “Assignment_xx.xlsx”). This is the version which will be marked and it
is the one you will see in “My Grades”. Note: xx is your student number.
Part 2 Pdf Submission: Submit the pdf answer to part 2 here (name the file to “Assignment
_xx.pdf”). You may re-submit as often as you like, and the last version should be submitted here
and will be marked, and it is the one you will see in “My Grade”. Note: xx is your student number.
Part 2 Pdf Turnitin Submission: Submit the pdf answer to part 2 here as well (name the file to
“Assignment_xx.pdf”). Each time you submit the file to Turnitin you will get a report for the
purpose of plagiarism detection. You may re-submit through Turnitin as often as you like, and the
last version should be submitted here and will be marked, and it is the one you will see in “My
Grade”. Note: xx is your student number.
Late submission will incur penalties as outlined in Section 5.3 of the Electronic Course Profile. For
submission extension, please refer to the same section. Importantly, AI tools such as ChatGPT is not
allowed as per the University policies. Using such tools will be treated as plagiarism.