Graincorp Limited (GNC)

Graincorp Limited (GNC)

Please select one of the following three companies as the company you will study for this Group Project:

• Graincorp Limited (GNC)
• Ruralco Holdings Limited (RHL)
• Select Harvests Limited (SHV)

Take the current share price to be the price at the close of trading on Friday 21st September 2012.
1. Describe what the company’s main businesses are. [This must be done in your own words, not by copying something from the company’s web-site or annual report].
2. Answer the following:
a. Who is the chairman of the company, and what is his/her background?
b. Who is the Chief Executive Officer of the company, and what is his/her background?
c. How many shareholders does the company have?
3. Calculate the following, based on the current share price (i.e. as at 21st September 2012):
a. Market capitalisation.
b. PE multiple (based on full-year earnings for the latest full-year results reported)
c. Dividend yield (based on the dividend for the latest full-year earnings reported).
d. The Bid-Ask spread [This can be done on any day between Friday 21st September and Friday 28th September 2012. In your answer, state what the Bid and Ask prices were.]
e. Enterprise value (EV).
f. EV/EBIT multiple based on the latest set of full-year results.
g. EV/EBITDA multiple based on the latest set of full-year results.
h. The P/NTA multiple based on the latest set of full-year results.
4. Calculate:
a. Days inventory
b. Days accounts receivable
c. Days accounts payable
d. Operating cycle
e. Cash cycle

for at least the last five (5) years for Ruralco and ten (10) years for the other two companies.

Compare your results to the other two companies and draw suitable graphs to compare them. Comment on your results, and in particular on any similarities or differences.

Note, irrespective of which company you choose to do this assignment on, for Question 4 you need to do calculations for Ruralco for at least five years and for Graincorp and Select Harvests for at least ten years.
5. Calculate the Weighted Average Cost of Capital (WACC) for the company, assuming a pre-tax cost of debt of 7.0%.
6. Estimate the value of one share in the company, using the Gordon Dividend Growth Model.
7. Suppose you are an equities analyst working for a stockbroking firm. Would you recommend that your firm’s clients invest in the company? Why or why not?



1. You should not contact any person at the companies to seek information.

2. Essays should be typed in Arial Font Size 12, with double line spacing. There should be ample margins for the tutor or lecturer marking the essay to make comments.

3. The assignment should be printed out single-sided on A4 paper.

4. Your essay should have a title page in addition to the cover sheet required by the Faculty of Business and Economics.
a. The cut-off time for the submission of the essay is 4:00pm on the stated date (Tuesday 2nd October, 2012).
b. Two copies must be submitted for the essay – one paper copy and one electronic copy.
c. All hard-copy essays should be placed into the assignment Drop Box at BESS (Business and Economics Student Services) in E4B 106. A completed cover sheet must be securely attached to essays. Cover sheets can be downloaded from:
d. The Faculty is not responsible for any missing pages due to essays not being stapled properly.
e. In addition, a soft copy must be sent on the due date to Turnitin on iLearn.

5. Quality of presentation and English expression are important. The recommended text for this essay is:
“The Little Penguin Handbook”, by Lester Faigley.2011. Published by Pearson Australia. ISBN: 9781442533783 (pbk.).
This is the Australasian edition of this text. It should help improve your results in writing, documentation and grammar. It should be useful in other units and other courses. There are copies available in the University Library.

6. Each group member should indicate who their tutor is, and the time and day of their tutorial.

7. When calculating debt, take the company’s net debt position, i.e. interest-bearing debt (short-term debt, long-term-debt, overdraft) less cash.

8. As this is a group project, you need to attach the attached cover sheet to your project. This is also available on iLearn. If the contribution column is not completed, then the marks will be distributed equally among group members. The highest mark a student can score is the maximum mark available for the project, which is 30.


9. Any cases of alleged plagiarism detected will be referred to the Director of Students for the Faculty of Business and Economics, and the student(s) will awarded the grade “Incomplete” for the unit AFIN252 until such time as a decision is made on the alleged plagiarism.