Analysing Investment Decision Coles Recent Business Essay

Question:

Dsicuss about the Analysing Investment Decision Coles Recent Business.

Answer:

Problem statement:

With the increasing globalisation, the Australian supermarket is becoming fiercely competitive, which is causing issues for the business organisations operating in the sector (Gitman, Juchau & Flanagan, 2015). It has been observed that Coles has experienced a decline in market growth in the initial quarter of 2017. Along with this, an additional buoyant Woolworths and diversification from Aldi has resulted in market share decline in 2016-2017 to 30.90% for the first time (Ausfoodnews.com.au, 2018). The express sales of Coles constituting of fuel have been AUD 1.5 billion for the initial quarter of 2017, which decreased by 13.7% of the prior corresponding quarter of the year.

In the traditional financial theory, the investors are assumed as rational wealth maximisers, since they follow the primary financial rules and they form their investment strategies depending on risk-return consideration in the form of factors estimated in affecting investment decisions (Dangi & Kohli, 2018). The major factors that would influence the investment decisions comprise of dividends, quick profits via trading, rapid growth, professional investment management , investment for saving motives and long-term growth of the business organisations. In addition, the investors are prone to avoid uncertainties associated with the final decisions, in which they are involved and as per the current scenario, there is uncertainty regarding the future business growth of Coles.

Aim and objectives:

The aim and objectives of the study are described briefly as follows:

  • To ascertain whether the influential dynamics associated with organisational image coincidence have impact on the behaviour of the individual investors
  • To ascertain whether the factors pertaining to accounting information have impact on the behaviour of the individual investors
  • To evaluate the financial position of Coles for the past three years in order to arrive at its performance
  • To recommend the potential investors about whether to invest in the shares of Coles

A brief methodology:

For accurate assessment of the variables affecting the analysis of investment decision in Coles, mixed methodology has been selected for carrying out this study.

Literature review:

The literature review section would comprise of the factors mentioned above related to investment decisions, theories of behaviour of the investors. This includes regret theory, mental accounting theory and theory of overconfidence. The explanation of various financial ratios would be made in this section. The sources would take into account academic journals, government data, annual report of Coles and other authentic statistical sites management .

Data collection:

The secondary data would be obtained from the government sources, industrial sources, annual reports and advocacy groups (Lane & Rosewall, 2015).

Interviews:

In order to support the findings of secondary data, the study would carry out interviews with the potential investors. After merging interview results with the primary findings, this would enable in discussing the development of future investment decisions (Satyanarayana, Sidhu & Naveen, 2015).

Secondary data and data analysis methods:

As mentioned above, the current study would use secondary data from the government sources, industrial sources, annual reports and advocacy groups. After obtaining the relevant secondary data, ratios would be computed and depending on such evaluation, analysis could be made effectively. Stress would be provided to the investment ratios for helping the investors to make investment decision in Coles (Mark Hawthorne, 2018). The data obtained from the annual report would be inserted into Microsoft Excel and formulas would be used for computing the ratios. Interviews with the potential investors would be made, which would be explained in a descriptive fashion. Hence, the current study would rely mainly on secondary data, which would be validated further with the help of interviews from the investors.

References:

Ausfoodnews.com.au. (2018). Retrieved 21 March 2018, from

Dangi, M., & Kohli, B. (2018). Role of Behavioral Biases in Investment Decisions: A Factor Analysis. Indian Journal of Finance, 12(3), 43-57.

Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson Higher Education AU.

Lane, K., & Rosewall, T. (2015). Firms’ investment decisions and interest rates. Reserve Bank of Australia management . June quarter, 1-7.

Mark Hawthorne, C. (2018). Coles, Woolworths, Aldi in battle for diminishing shopper dollars. The Sydney Morning Herald. Retrieved 21 March 2018, from

Satyanarayana, I., Sidhu, N. B. C., & Naveen, P. (2015). Analysis of investment decisions. International Journal of management Research and Reviews, 5(6), 351.

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