ACF5130 Financial statement analysis and business valuation
Business Analysis: Tutorial Discussion Solutions
Question 1: Inflation and Interest Rates
The chart below shows the Reserve Bank of Australia (RBA) cash rate and quarterly consumer price index (CPI) in Australia for the period December 2021 – February, 2024. The Central Bank raises interest rates to combat inflation. Theory suggests that the CPI declines when the cash rate increases. However, the data shows otherwise for this period.
Explain a plausible reason why the RBA was not able to lower inflation with the rate rises until December 2022.
What could be the effect of persistent rate rises on the Australian economy?
Source: The chart is based on data from the Reserve Bank of Australia
Question 2 COVID-19 Pandemic Supply Chains
See the following excerpt from a recent KPMG report:
“The recent pandemic has affected every part of the value chain, from raw material sourcing to end customer. It is testing the commercial, operational, financial and organisational resilience of the majority of companies across the globe, and has highlighted risks and resiliency gaps for many organisations. CEOs are looking to get on the front foot when it comes to disruption and innovation, with 67% saying they will increase investment in disruption detection and innovation processes.”
How do supply chain disruptions affect businesses?
What could be some strategies to deal with supply chain problems?
Question 3 Porter’s Five Forces
See the video below:
Analyse the Australian supermarket industry using Porter's Five Forces framework. Based on the information provided, what are the main forces affecting competition and profitability in the industry? Do you think the industry is attractive for new entrants? Why or why not?
Question 4 Climate change
What are the primary challenges and opportunities that climate change presents for the Australian mining industry? Explore some strategies that mining companies can adopt to address climate risks while capitalising on opportunities for sustainable growth, innovation, and enhanced social license to operate.
Question 5 Woolworths Major Risks (2023 Annual Report)
Which of these :
• Product and Food Safety • Macroeconomic risks?
• Pay and Entitlements • Industry risks?
• People
• Safety, Health and Well-being
• Privacy and Data Management Note that some risk factors could fit into more than one category.
• Customer and Brand
• Technology Availability and Cyber Security
• Sustainability
• Supply chain and Operational Resilience
• Financial
• Legal, Regulatory and Governance
• Strategy and Transformation
Question 6 Business Strategy
Read the article titled “Faster, Cheaper Fashion; Primark”. What business strategy does Primark have? Explain.
Question 7 Business Strategy Analysis
13. There are very few companies that are able to be both cost leaders and differentiators. Why? Can you think of a company that has been successful at both?