Research Report about the ‘Fonterra Australis Pty Ltd”1000 WordsThe objective of this Analysis...

Question

Research Report about the ‘Fonterra Australis Pty Ltd”

1000 Words

The objective of this Analysis Project is to analyse the financial performance and future prospects of ASX listed companies (from same industry – guidance will be provided in class) in a typical (equity) investment decision-making context. Consistent with the Real World objective, assume that you are required to make an investment recommendation to a retail investor (i.e. an individual investor). The retail investor wishes to add a stock (investment in a company) to a diversified Self-Managed Superannuation Fund (SMSF). The retail investor has an investment strategy of maximising the long-term returns to the SMSF.

Consistent with the unit’s objectives, the project is an essential part of the course and aimed at developing your understanding of, and practical skills in, financial statement analysis and valuation. It is also designed to enhance teamwork, analytical and communication skills.

You are expected to use knowledge gained and techniques learnt in the Unit in your analysis, and for timeliness of completion, you are expected to progressively complete the project as the semester unfolds. Your analysis will draw on business strategy, accounting, financial, and prospective analyses tools and techniques covered in the unit. Your analysis should cover the most recent 3 years.

Executive Summary

- Provide a brief overview of the objective, method of analysis, key findings and any recommendations.

Introduction to the Companies and the Industry
- Briefly describe the industry and each company’s position within the industry and

appraisal of their governance structure / reporting quality.

(Industry) Analysis
- the companies’ relative performances, financial strengths and inherent risks

using business environment & strategy analysis.

(Financial) Analysis
- Time-series and cross-sectional ratio analyses and critical commentary / interpretation

of financial performance including accounting analysis.

Forecasts and Valuations
- Using the methods covered in the course, provide a forecast of and comment on

expected earnings and valuation /changes for the company (with appropriate explanation, justification for assumptions. Conclusion and Recommendation
- Summarise your findings,

Appendices
- Include any documentation supporting your findings (e.g. spreadsheet calculations of

ratios, forecasts and valuation estimations, supporting articles, etc.

Neenisha · Accepted Answer

Income Statement
							Forecasted
			2016	2017	2018	2019	2020	2021	2022	2023	2024
		Total revenue	17,199,000	19,232,000	20,438,000	20,114,000	20,916,897	21,751,844	22,620,119	23,523,053	24,462,031	3.99%
		Cost of revenue	13,567,000	15,968,000	17,279,000	17,099,000	17,781,546	18,491,338	19,229,463	19,997,051	20,795,280	85.01%
		Gross profit	3,632,000	3,264,000	3,159,000	3,015,000	3,135,351	3,260,506	3,390,656	3,526,002	3,666,751
		Operating expenses
		Selling general and administrative	2,132,000	2,001,000	2,096,000	1,924,000	2,000,801	2,080,668	2,163,722	2,250,092	2,339,910	9.57%
		Total operating expenses	2,262,000	2,180,000	2,304,000	2,220,000	2,308,616	2,400,770	2,496,603	2,596,260	2,699,896	11.04%
		Operating income or loss	1,370,000	1,084,000	855,000	795,000	826,734	859,735	894,054	929,742	966,855
		Interest expense	434,000	427,000	462,000	434,000	451,324	469,340	488,075	507,557	527,818	2.16%
		Income before tax	932,000	765,000	-154,000	-428,000	375,410	390,396	405,979	422,185	439,037
		Income tax expense	98,000	20,000	42,000	177,000	155,251	161,449	167,893	174,595	181,564	41.36%
		Income from continuing operations	834,000	745,000	-196,000	-605,000	220,159	228,947	238,086	247,590	257,473
		Net income	810,000	734,000	-221,000	-557,000	202,692	210,783	219,196	227,946	237,045	92.07%
		Net income available to common shareholders	810,000	734,000	-221,000	-557,000
		Basic EPS	0.51	0.46	-0.14	-0.35
		Diluted EPS	0.51	0.46	-0.14	-0.35
		Basic average shares	1,600,825	1,604,744	1,610,005	1,611,980
		Diluted average shares	1,600,825	1,604,744	1,610,005	1,611,980
		EBITDA	1,936,000	1,718,000	852,000	567,000
		 
Balance Sheet
			2016	2017	2018	2019	2020	2021	2022	2023	2024
		Assets
		Current assets
		Cash
		Cash and cash equivalents	369,000	393,000	446,000	550,000	571954.52706612	594785.420057144	618527.661153831	643217.628931915	668893.154102444
		Other Short Term Investments	-	580,000	-	-
		Total cash	369,000	393,000	446,000	550,000	571954.52706612	594785.420057144	618527.661153831	643217.628931915	668893.154102444
		Net receivables	1,282,000	1,992,000	1,965,000	1,900,000	1975842.91168296	2054713.26928831	2136731.9203496	2222024.53631025	2310721.80508117
		Inventory	2,401,000	2,593,000	2,917,000	2,944,000	3061516.59578665	3183724.13936042	3310809.88079433	3442968.54468283	3580402.62850472
		Other current assets	145,000	181,000	141,000	116,000	120630.409344854	125445.652230234	130453.106716081	135660.445374731	141075.647047061
		Total current assets	5,091,000	6,082,000	5,965,000	5,832,000	5,729,944	5,958,668	6,196,523	6,443,871	6,701,093
		Non-current assets
		Property, plant and equipment
		Gross property, plant and equipment	10,767,

Research Report about the ‘Fonterra Australis Pty Ltd” 1000 Words The objective of this Analysis Project is to analyse the financial performance and future prospects of ASX listed companies (from same...

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