Financial Statements and Analysis of Evolution Mining Limited and Fortescue Metals Group Limited

Running head: ACCOUNTING
Accounting
Name of the Student:
Name of the University:
Authors Note:

ACCOUNTING
1
Executive summary:
Financial statements are prepared by business and non-business entities on periodical
basis, generally at the end of each financial year. These statements are prepared by an
organization to portray the true and fair picture of the organization. In order to understand the
financial performance and position of an organization stakeholders use these statements to assess
the state of affairs and performance of the organization as on a particular date. The detailed
discussion in this document shows that Evolution Mining Limited and Fortescue Metals Group
Limited have regularly prepared financial statements to provide their stakeholders with financial
report to assess the state of affairs and performances of these organizations.

ACCOUNTING
2
Contents
Executive summary:........................................................................................................................1
Scenario 1:.......................................................................................................................................3
Background research:..................................................................................................................3
Financial ratio analysis:...............................................................................................................5
Scenario 2:.......................................................................................................................................8
Investment decision:....................................................................................................................8
Conclusion:....................................................................................................................................13
References:....................................................................................................................................14

ACCOUNTING
3
Scenario 1:
Background research:
Evolution Mining Limited is Australian gold mining company. Using the financial
statements of Evolution Mining Limited the financial health of the company shall be assessed to
determine whether the loan applied by the company to Brisbane Bank can be approved or not.
An Australian company, Fortescue Metals Group Limited is the fourth largest iron ore producer
company in the world. Similarly the financial statements of Fortescue shall help in assessing the
financial state of the company to take important decisions (Cohen, 2013). Evolution Mining
Limited is in the business of mining of iron ore whereas Fortescue Metals Group is a gold
mining company.
Company Economy wide factors Industry factors Specific factors
Evolution I. Large
economy
provides huge
opportunity to
expand its
business.
II. Stable
economy in
Australia and
America
gives the
freedom to
the company
to achieve
organizational
objectives.
I. Mining
industry in
Australia
provides
huge
opportunity
for market
expansion.
II. Perfect
competitio
n exist in
the market
with big
players like
BHP and
others.
I. Experienced
and skillful
professionals
are working
tirelessly to
provide
competitive
advantage to
the company.
II. Technological
advancement
within the
business set
up is
impressive.
Fortescue I. One of largest
gold mine
companies it
has a huge