Financial Performance Evaluation of Abacus Property Group

This report evaluates the financial performance of Abacus Property Group and suggests investing in smart bins for sustainability. It analyzes the profitability, liquidity, and activity ratios of the company. The report also highlights the importance of investing in sustainable projects to build a strong brand image and attract investors.

Abacus Property group (ABP)

Abacus Property group (ABP) 1
Introduction
In this report, the financial performance of the company will be evaluated. In this, it will be
analysed that the company has to invest in the smart bins with the motive of sustainability. In
this report, Ratio of the company will be evaluated in order to analyse the financial position
of the company. Abacus Property Group has been taken into consideration in the report in
order to evaluate the financial position. Abacus Property Group is a leading diversified
property group which is specialised in core plus property opportunities in Australia.
Ratio Analysis
Financial Ratio Analysis
201
7
201
8
Profitability Ratio
Return on Asset Net Income 285 246
Total Asset
243
7 0.12
279
6
0.0
9
Return on shareholders’
Equity Net Profit 285 246
Net Ordinary Shareholder's
Equity
176
6 0.16
187
0
0.1
3
Short Term liquidity Ratio
Current Ratio Current assets 168 666

Abacus Property group (ABP) 2
Current liabilities 40 4.20 156
4.2
7
Quick Ratio Quick assets 74 124
Current liabilities 40 3.10 156
0.7
9
Operating Cash Ratio Cash Flow from Operations 116 194
Current Liabilities 40 2.9 156
1.2
4
Long-Term liquidity Ratio
Debt Equity Ratio Total Liabilities 622 879
Total Assets
243
7
0.25
5
279
6
0.3
1
Times interest earned Net Profit 285 244
Average Interest Expenses 38 7.5 33.5
7.2
8
Debt Equity Ratio Long-short term debt 622 879
Shareholder Equity
176
6 0.35
187
0
0.4
7
Activity Ratio
Receivable turnover Ratio Net Sales 201 206
Average Account Receivable 18
11.1
7 21
9.8
1

Abacus Property group (ABP) 3
(Source: Abacus Property, 2018b)
According to the evaluation, it has been seen that the company is not stable in terms of
profitability as the net income of the company is decreases from 0.12 to 0.09 in the year 2017
and 2018 respectively. The debt equity ratio of the company reflects that the debt is increases
from 622 to 879 with the value of shareholder equity in the year 2017 to 2018. Increasing the
total liability depict that the company will fall under the loss in the coming future. It has been
seen that the company is not able to borrow the loan as its liabilities are increases and its
capability to get the loan is decreases (Abacus Property, 2017a). The short and long terms
liquidity ratios depict that the asset of the company is increases but the current liabilities are
increases twice in amount as it’s invests in the asset by borrow the loan. The Activity ratio
represent that the net sales of the company is increases from 201 to 2016 in the year 2017 and
2018 respectively. The ratio’s states that the organisation is not able to raise the shares from
outside the company as the liability are increases. It is suggested that the company should
invest in Smart Bins project in order to create the social image in the market to influence the
investor to invest in it and the company will back up with stronger financial position
(Robinson, Henry, Pirie, and Broihahn, 2015).

Abacus Property group (ABP) 4
(Source: Blue Environment, 2018)
It has been seen that the percentage of recycling the wastage is high in Australia but it is
required to collect the waste data so that the recycling companies recycle the waste (Blue
Environment, 2018). It is a social activity as the waste material can be converted into the
energy which is useful for the different areas (Clayton, and Radcliffe, 2018). The company
should invest in smart bins to influence the investors towards it. Investing in smart bins
projects helps the organisation to influence the recycling companies to invest in it in order to
raise the capital. It is essential to invest in sustainable activities to build the high brand image
in the market. It is a fact that the companies invest in the high brand image companies to
reduce the risk of insolvency. That is why; it is recommended that the company should invest
in the smart bins so that its social image in the market will develop and investors will invest
in it for the growth. The net profit amount of the company is also arises which is a beneficial
factors for the company.
Conclusion
At the end, it is concluded that the company should invest in the sustainable project in order
to attain the success in the market. This project helps the company to build the strong relation
with the government and society. The investors would like to invest in the company due to
increases the brand image in the market.

Abacus Property group (ABP) 5
References
Abacus Property. (2017a) Annual Financial Report 2017. [online] Available from:
http://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_ABP_2017.pdf
[Accessed 29/05/19].
Abacus Property. (2018b) Annual Financial Report 2018. [online] Available from:
http://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_ABP_2018.pdf
[Accessed 29/05/19].
Blue Environment. (2018) Australian National Waste Report 2016. [online] Available from:
https://www.environment.gov.au/system/files/resources/d075c9bc-45b3-4ac0-a8f2-
6494c7d1fa0d/files/national-waste-report-2016.pdf [Accessed 29/05/19].
Clayton, T. and Radcliffe, N. (2018) Sustainability: a systems approach. Routledge.
Robinson, T.R., Henry, E., Pirie, W.L. and Broihahn, M.A. (2015) International financial
statement analysis. John Wiley & Sons.