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Instructions The basic requirement is to undertake a general financial analysis, comparing financial position and performance over the two most recent financial years, of an ASX listed company. Your...

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Instructions The basic requirement is to undertake a general financial analysis, comparing financial position and performance over the two most recent financial years, of an ASX listed company. Your Learning Facilitator will provide the details of the ASX listed company. The annual report for the chosen company should be available on the company website and/or will be provided by your Learning Facilitator. The analysis should consider each of the following financial ratios: - profitability and market performance - efficiency, - liquidity, - capital structure Note: You are to use the ‘consolidated’ data in conducting your analysis. You are only required to look at the most recent financial report. For those ratios which involve averages, you will calculate an average for the most recent year only, the prior year ratio calculation will NOT consider average calculations. This assignment will contain two elements: 1. Schedule(s) of relevant ratios and other useful calculations - The detailed calculation of relevant ratios and other useful calculations should be included, as one appendix, prepared using Excel. An example template is provided under the assessment 2 information, FIN600,FINA6017 Assessment 2 Appendix template.xls. - You will be advised by your facilitator as to which ratios to calculate. - You are advised to show the formulae used in determining particular ratios and other figures. 2. A written report The written report is the main element of this assessment. A sample template is provided under the assessment 2 information, FIN600/FINA6017 Assessment 2 report template.doc. The written report should: - Explain what is revealed by the ratios and other calculations, in the context of the company’s profitability, asset efficiency, liquidity, capital structure, and market performance. - In particular, any important changes over the two financial years should be identified, discussed and, where possible, explained. - Provide an overall assessment of whether the company, over the recent financial year, has been better than the previous financial year, in the perspective of existing equity investors (shareholders). FIN600/FINA6017_Assessment 2_Case Study Report Page 3 of 9 In preparing this report, you should: - analyse the financial statements of the business; - identify key ratios and apply ratio analysis; - argue the case of why the organisation may or may not succeed in the future and what the business should be doing to help it succeed; - consider the impact of the political and competitive environment on the business; - include external factors that need to be taken into consideration and the likelihood of a merger or acquisition; - provide a recommendation, that is, would you invest in this company after your own analysis or under what circumstances would you buy/save the business? The assignment is to comply with the University’s General Guide for the Presentation of Academic Work. Please see more information here: https://laureateau.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_20163_1&co ntent_id=_2498849_1 Points to consider i. You are encouraged to seek and use additional public information about the company from sources, other than the annual report (for example, the internet, journal articles, newspapers, and business magazines). ii. However, it is NOT envisaged that you will be engaged in extensive research of this nature and it is expected that the annual report will be the primary resource relied upon, in completing the assignment. iii. You are asked NOT to try and make direct personal contact with the company or its officers (for example by telephone, fax, letter or email), in an attempt to gather further information. iv. It is important to note that you must NOT reproduce company promotional material from the annual report or company website and represent it as critical analysis. v. You will be provided relevant share price data for the company by your facilitator so that investment ratios (such as a price earnings ratio) can be calculated. vi. You may find it useful to consult accounting references, in addition to the prescribed text, which deals with the analysis and interpretation of company financial reports. vii. As this is a Masters-level subject, students are expected to engage with high quality credible resources (eg. academic journal articles) to support and develop arguments and position statements, using the Torrens University Library: http://library.laureate.net.au. References to ‘Wikipedia’ or similar unsubstantiated sources will not be accepted. FIN600/FINA6017_Assessment 2_Case Study Report Page 4 of 9 viii. It is essential that you use the appropriate APA 6th referencing style, for citing and referencing research. The assignment is to include in-text citations and a reference list following the appropriate APA 6th referencing style. Please see more information on refe
Answered 24 days After Apr 25, 2021 Torrens University Australia

Solution

Harshit answered on May 20 2021
155 Votes
TELSTRA
Student name – ID
FIN600/FINA6017 TX YYYY
Assignment – Company
Executive Summary
This report analyses the company Bega Cheese limited which is an Australian company. The performance of the company is analysed for the year and 2020 and 2019. Whether ratio calculation we can see that the e standard and performance of the company has been an increasing trend but still the company is performing very poorly as per the industry average. Any need to focus on increasing the revenue and decreasing the cost so that the profitability ratios can change.
The company needs to increase the investment in cu
ent assets so that the liquidity position of the company will increase and the suppliers and the short term Finance will gain confidence in the company. We can see that the company has been able to reduce the level of debt in the company which shows that the assets of the company is more financed by equity than to debt making the company less risky from man investor's perspective.
The gearing ratio so select the risk involved in the investment in the company. Ratios of the company husband and freezing which was at the level of that incorporated in the company is decreasing which makes the company less risky therefore investment in this company will be good.
The fundamental to the company are strong therefore investment in the company can be recommended but only for a long term. The company may or may not be able to generate high level of returns in the short term but with the increasing trend the company will generate high returns.
Contents
Page Numbe
1
Introduction - Background and Business
2
2
Company Analysis - Cu
ent financial performance, Key financial highlights,
Economic outlook
3
Ratio Analysis
3.1
Profitability ratios
3.2
Efficiency ratios
3.3
Liquidity ratios
3.4
Gearing ratios
4
Recommendations and overall assessment
5
References/Bibliography
Appendices – Excel Spreadsheet
1
Introduction
1.1
Background and Business
Bega cheese Limited is an Australian company with its headquarters in New South Wales Australia. The company is in the business of manufacturing dairy products. The company was founded in the year 1899 and cu
ently employs more than 1800 employees. The company was incorporated as agricultural cooperative. In the year 2011 the company was listed on ASX. Vegemite, Farmers Table, Zoosh, Picky Picky, Tatura and Dairy Mont are most famous
ands owned by the company. Bega cheese Limited holds more than 15% of the entire retail cheese market of Australia. More than half of its revenue is generated from spreads daily consumer goods and grocery products. Fonte
a is the distributor of Bega.
From the financial statements of the company we can conclude that the company divides itself into segments which are as follows:
Branded segment: Under the segment the company manufactures and bulk and aggregates it in value and customer products for both the internal and external
ands.
Bulk segment: In this the bulk ingredients and bionutrient products are manufactured.
Bega cheese purchased lion dairy and drinks business for $560 million and turned the same in a three billion dollar business I am became one of the top Global leaders in Dairy market. Companies like cadbury, HUL, Saputo Incorporation are its biggest competition.
The company manufacture cheese spreads grocery products and buys nutrient ingredients for health. The company is contract cheddar cheese for multiple companies which it markets under its own
and. The company is also in the presence of farm services which includes supply of milk.
2
Company Analysis
2.1
Cu
ent Financial performance, Key financial highlights, Economic outlook
· The revenue of the company was $1,420 million in the previous year which increased by 5% to become $1,493 million in the year 2020.
· Based on the segment reporting 59% of the sales was generated by the
anded segment and the balance was generated by the bulk segment.
· Export sales made by the company has increased by 15% and exports from 35% of the total revenue of the company which are mounted to $523 million.
· Under the normalised method the EPS of the company he remained the same and both the financial years at $14.9 but under the but the true EPS increased from $2.9 per share to $9.9 per share.
· The net profit of the company increased from $8.5 million to $21.7 million in the cu
ent financial year.
· The marketing expense of the company has been decreased by 25% which amounted to $15.8 million.
· The profit after tax of the company has increased to $31,886,000 in the financial year 2020 from $30,929,000 in the year 2019.
Economic Outlook
· Portfolio of the company has evolved due to the building of strategic plan of diversification of the company in the Australian Dairy market. Focus is to grow high quality foods product.
· The company has invested in the structure where Australian dairy industry rationalization has also played an important role in the portfolio expansion of the company and in the relationship of milk supply.
· The overall production of the company has decreased by 2% that is because of drought and supply competition. The volume went down from 303,252 tonnes to 297,668 tonnes in the year 2019.
· The chairman of the company commented that the board is happy with the performance of the company in the cu
ent financial year.
3
Ratio Analysis
3.1
Profitability and Market ratios
    (see appendix for calculations)
    2020
    2019
    Industry average
    Return on equity
    4.19 %
    1.08%
    15.52%
    Return on assets
    1.37%
    0.34%
    5.03%
    Gross profit margin
    19.36%
    19.76%
    33.43%
    Net profit margin
    1.34%
    0.36%
    20.73%
    Net Interest Income (if applicable)
    NA
    NA
    NA
    Expense ratio or Cost to income ratio
    %
    %
    %
    Cash flow to sales
    9.22%
    7.06%
    %
    Earnings per share
    $9.9 cents per share
    $2.1 cents per share
    $
    Dividends per share
    $5 per share
    $5.5 cents per share
    $
    Dividend payout ratio
    50.50%
    261.90%
    %
    Price earnings ratio
    0.43times
    2.176times
    Times
Return on Equity Company is the profit earned by the company because of the investment of equity share capital by the equity share holder and the company. The return of equity of the company has increased from 1.08% to 4.19% in the cu
ent financial year. the return of equity of the company is way below the industry average but the company's level was increased...
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