MyMBAjourney@MBS, Videos

20200603a – Week 9 – Financial Management, Financial Accounting, Company Valuations and Analysis, Economic News and Analysis

I am in week 9 of term 2 continuing with Financial Management and Financial Accounting. Both are now starting to dovetail into each other as we look at company valuations and analysis.

Financial Management we have been looking at Corporate Payout Policy, namely the types of dividends and share buybacks. The question many company’s will need to ask is whether they should pay a dividend or retain profits in the business.

Financial Accounting we have been looking at Financial Statement Analysis. Our lecturer placed the caveat at the beginning of the class to warn that we are learning enough about financial analysis for investment purposes to be dangerous, by the fact this is only the beginning steps to understanding financial analysis. Financial analysis is not just about ratio’s but understanding the economic / business environment / industry the company is in to then assist to identify ratio’s might be of use. We have focused on the DuPont Decomposition and its components for this class.

The current subjects have also incorporated practical applications given the current economic conditions created by COVID19. For Financial Management we have looked at the financial indicators that can be looked at for both COVID19 and the Global Financial Crisis. For Financial Accounting we have discussed the impact COVID19 will possibly have on financial statements for both the short and long term.

For the last several weeks I have been researching the economic front with the unemployment figures for April released being surprisingly low. As a result I wanted to see where we are going, listening to the view points of economists, CEO’s and investor’s both here and in America. One point that I took note of was ‘is there is a disconnection between main street (economy) and Wall Street (share markets)?” We have predictions of a drawn out economic recovery yet the sharemarket is in a sharp upward trend. What was also mentioned is that the sharemarket is also a leading indicator. An additional factor is the China- America-Australia relationships.