PDD Accounting Analysis

AF5115

Group Project Guidelines

Each group will submit one written report representing the group’s efforts. You are required

to analyse one of technology companies’ financial statements by applying skills that you have

learned throughout this course. You will present your group report on week 12 or week 13.

The order of your presentation will be determined by lucky draw. The soft copy of your

written report in MS Word format should be submitted on the date of your presentation (i.e.

either 11:59pm on 22 or 29 November, 2023). A submission link on Blackboard will be

provided on a later date for you to upload the files and no hard copy will be required.

Written Group Report

Written Report (excluding tables and graphs)

1. Max 10 pages (writing only), font (Time New Roman), fond size-12, line spacing -

1.5

2. On the first page, provide the summary of the firm you are analyzing.

3. From the second page, the following analyses must be included in the report: (1) firm

strategy analysis, (2) accounting analysis, (3) financial ratio analysis, (4) cash flow

analysis

▪ Graphs and Tables: graphs or tables should be included in a separate file, not in a

written report.

Assessment:

(1) Analysis (50%)

(2) Presentation (30%)

(3) Question and Answers (20%)

Presentation Guidelines

The details of the presentation arrangement will be announced in week 5.

Indicative structure of the report

Summary

This section should summarize your analysis on the firm’s financial statements.

Basic Information

The report should begin with some basic information about the firm, including the company’s

ticker symbol, the primary exchange upon which its shares are traded, the primary sector and

industry in which it operates, the current stock price and market capitalization.

Business Description

This section should include a detailed description of the company and its products and

services. It should also convey a clear understanding of the company’s economics, including

a discussion of the key drivers of revenues and expenses. Much of this information can be

sourced from the company itself and via its regulatory filings, as well as industry

publications.

Industry and Firm Strategy Analysis

This section should include an overview of the industry dynamics, including a competitive

analysis of the industry. Most firms’ annual reports include some discussion of the

competitive environment. A group of peer companies should be developed for purposes of a

competitive analysis. The “Porter’s Five Forces” framework for industry analysis is an

effective tool for examining the health and competitive intensity and of an industry.

Additionally, production capacity levels and pricing are important considerations, as are the

distribution and stability of market share.

It is important to note that there are different paths to success. Strength of brand, cost

leadership, and access to technology or resources that are protected are just some of the ways

in which companies set themselves apart from the competition.

Accounting, Financial Ratio, Cash Flow Analysis

This section should include a detailed analysis of the company’s historical financial

performance. Financial results are commonly manipulated to portray firms in the most

favourable light. It is the responsibility of us to understand the underlying financial reality.

Accordingly, a careful reading of the footnotes of a company’s financial disclosures is an

essential part of any examination of earnings quality. R&D expenditure, CAPEX, non-

recurring events, the use of off-balance sheet financing, income and reserve recognition, and

depreciation policies are all examples of items that can distort a firm’s financial results.