Corporate Finance Analysis of A2 Milk Company

Running head: CORPORATE FINANCE
Corporate Finance
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CORPORATE FINANCE
Executive Summary
The main purpose of this assignment is to analyze the financial statements of A2 Milk company
for the year 2017. The assignment will be providing a detailed overview of the company
outlining the major shareholders of the company. The assignment will also be calculating
important ratios of the company and analyze the same. The assignment will be also presenting
beta and graph which depicts the share price of the company.

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CORPORATE FINANCE
Table of Contents
1 Background of A2 Milk Company...........................................................................................3
2 Ownership Governance Structure of the a2 Milk Company....................................................3
I Substantial Shareholders of A2 Milk Company........................................................................3
II Major roles involved in Corporate Governance.......................................................................3
3 Key Ratios of the Company.....................................................................................................4
4 Graphical Presentation of Stock Prices....................................................................................6
5 Factors which influences the Share Prices...............................................................................6
6 Computation of Required Rate of Return.................................................................................7
7 Computation of Weighted Average Cost of Capital................................................................7
8 Debt Ratio and Capital Gearing Ratio of the Company...........................................................8
9 Dividend Policy........................................................................................................................8
10 Letter of Recommendation...................................................................................................9
Reference.......................................................................................................................................10

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CORPORATE FINANCE
1 Background of A2 Milk Company
This company was known previously known as A2 corporation. A2 Milk Company is
engaged in the production of milk and milk related products. A2 milk Company also makes milk
products which are related to infant formula. The company was founded by Dr Corran
McLachlan and it was founded in 2000 in New Zealand. Dr Corran McLachlan was engaged in
the research of health effects of Milk Protein of A1 Beta-casein. The company carried out
genetic test to identify which cows which can produce milk with A1 protein. The company
started its operations on farm breeding programs in order to breed cows which can produce A2
milk. The company has its headquarter in Sydney, Australia and the total revenue of the
company as per 2016 figures is $ 337.3 million (The a2 Milk Company", 2018). The core
activities of A2 Milk Company consist producing A2 Milk, other related dairy products and
infant formula.
2 Ownership Governance Structure of the a2 Milk Company
I Substantial Shareholders of A2 Milk Company
The main shareholders of the company who have a majority shareholding in the total
shares of the A2 Milk Company which is greater than 5% are USB Group AG and its related
parties which has a shareholding of 8.10%. The other shareholders which have a shareholding of
more than 5% are challenger Limited, Colonial First State Asset Management (Australia)
Limited, Commonwealth Bank of Australia, Greencap Capital Pvt Limited, Harbour Asset
Management Limited. There are no shareholders who holds more than 20% shares in the
company. USB Group AB is not in any way related to the A2 Milk Company and thus it is not a
family company.