AFIN253: Financial Management- Research Report Writing Assignment

Internal Code: MAS1728

Research Report Writing Assignment:

Task: This is a research assignment and requires the use of independent research using company reports and academic papers. The Chief Investment Officer (CIO) of Rammstein Holdings, one of Germany’s largest hedge funds, Mr Till Lindemann has contracted your company, Accept Consulting to investigate Breville Group Ltd (Breville) and GUD Holdings Ltd (GUD). Both these companies are leaders in the small appliance market in Australia and Mr Lindemann believes that his clients would benefit from the diversification these companies would bring to an international share portfolio. With this in mind, Rammstein is considering investing substantial amounts in either company but is being cautious given the current state of the Australian economy. Lindemann is interested to understand what the cashflow degree of operating leverage (DOL) is for these companies for 2014 and 2015. A copy of these reports has been provided on Ilearn. They have requested that you prepare a report for them that detail the following information. 1. The Cashflow DOL for 2014 and 2015 for GUD and Breville using information contained in their 2015 Annual Reports. (Any calculations and assumptions must be detailed in an appendix and not appear in the body of the report). 2. Where there are significant differences in the DOL between the companies the reason for this should be explained. 3. Where there are significant differences between years for either company the reason for the difference should be explained. 4. A short summary of the reasons that analysis of the accounting and cash flow DOL is useful for a prospective investor. This should be supported by appropriate academic research.