2- Financial Statement Analysis

Company
You need to analyse the financial statements of Baby Bunting Group Limited (ASX ticker: BBN). The financial statements and notes in Excel format and the annual reports for Baby Bunting for FY 19, FY 20, and FY 21 will be shared with you on Learn.UQ.
Formatting
Your written answers should be in A4 page size, in Times New Roman font, 12pt font size, at least single line-spacing, margins at least 2cm on all sides.
Please clearly separate and label your written answers to each question.
DETAILED PROJECT INSTRUCTIONS AND MARKING GUIDE
A. Understanding the Business
1. Summarise in one-three sentences, what the company does/what is its business model/how does it make money?
2. What are the company’s main brands, products and services? Describe them.
3. Where are the company’s production facilities or offices or stores located? What markets does it sell to?
4. Name two competitors for the company and explain how/why they compete.
Focus on direct competitors first (e.g. Coles is a direct competitor for Woolworths), but if there are no direct competitors, you might have to consider indirect competitors (e.g. Beacon Lighting is the only large, specialist retailer of light fittings in Australia, but it faces competition from retailers that sell a variety of products, including light fittings, such as Bunnings and IKEA).
Page limit: 1 pages (A4; Font: Times New Roman 12pt)
Make sure to include in-text references or footnotes to your sources of information. Make sure to provide answers in your own words, rather than copying-and-pasting from sources.
Tips: See my practical advice for researching a company in the Appendix of Lecture 1 Slides, ‘Researching Australian Companies’ on Learn.UQ. You will need to consult sources such as the company’s website, annual reports, industry reports, etc.
B. Industry Analysis (Class 1) – Porter’s Five Forces
Pick two of the Porter’s Five Forces that you think have the biggest impact on the main industry in which the company competes. Describe how these two forces impact the company and its industry.
Page limit: 1 page (A4; Font: Times New Roman 12pt)
Make sure to include in-text references or footnotes to your sources of information. Make sure to provide answers in your own words, rather than copying-and-pasting from sources.
If the company operates across multiple industries, answer B only for the main industry it operates in, which will generally be the industry where the most revenue is generated (clearly identify what this is in your answer).
Tips: Follow the approach in Class 1 (my JB Hi-Fi example) and in the set reading by Palepu et al. (link on Learn.UQ). You should consult multiple sources of information, such as the company’s annual reports and industry reports from IBISWorld.
Page Limits
I have specified page limits for the questions that are to be answered in the Word document. These are maximum page limits. I will enforce maximum page limits by simply not marking any material that appears beyond the page limit for a particular question. You do not necessarily need to write as much as the page limit if you can provide a correct, but succinct, answer.
Cover pages and references lists are not counted towards the page limit.
Referencing and Research Requirements
Some parts of this assignment require students to conduct relevant research about the company. For written answers, evidence of appropriate research and understanding of the company is included in the marks allocated to the question. Appropriate references help to provide evidence that you have conducted research to support your answers. There are also a small number of marks allocated to proper referencing formats/conventions.
Research
I expect you to conduct research into the company, its industry and its operating environment. To be clear, I do not want you to reference academic research (e.g. journal articles), unless they are highly relevant to the company or the point you are making. This is a practical course, not an academic research course. The emphasis of your research should be on practical materials, such as, annual reports, company presentations, company websites, industry reports, newspaper articles, analyst reports etc.
Referencing
Proper referencing is crucial for two reasons:
• To comply with plagiarism rules
• To provide evidence that you have conducted research in answering your questions
You must follow one of the following two approaches to referencing for the project:
• Brief in-text references AND a reference list. The in-text reference should be brief but clear, while the reference list should provide sufficient detail for me to locate the source information. Use one consolidated reference list for the whole project, rather than a reference list for each answer.
• Footnote references with similar detail to a reference list. You may use standard footnote referencing conventions like ‘ibid’ if you like.
In-text references and footnotes should be included in every sentence where you make a claim that requires supporting evidence. Do not simply put one reference at the end of an entire paragraph or page.
Please include the page number or numbers when referencing a lengthy document, such as an annual report, investor presentation or industry analysis document. If you are referring to a note to the financial statements, you can also mention the note number instead of a page number.
References are essential for direct quotes, for example:
JB Hi-Fi describes its one of the competitive advantages as follows: “#1 player in the Australian
market with the opportunity for further consolidation” (2020 Annual Report, p. 19). References should also be used when you make a claim about a company, its industry or environment
that requires some evidence to support it, for example:
JB Hi-Fi has a 33.2% market share in Domestic Appliance Retailing (IBISWorld Industry Report G4221a, p. 33).
Most of JB Hi-Fi’s revenue is generated in Australia (2020 Annual Report, p. 70).