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Advice for Wealthy Investor PDF

   

Added on  2021-06-14

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ADVICE FOR WEALTHYINVESTORStudent Name: Student ID:FAR Limited

ContentsEXECUTIVE SUMMARY.................................................................................................................................3INTRODUCTION...........................................................................................................................................4COMPANY’S DESCRIPTION...........................................................................................................................5IDENTIFICATION OF STRUCTURE FOR OWNERSHIP GOVERNANCE.............................................................5MAJOR AND SUBSTANTIAL SHAREHOLDERS............................................................................................6COMPOSITION OF GOVERNANCE............................................................................................................6ACCOUNTING RATIOS AND ITS ANALYSIS....................................................................................................7ANALYSIS OF SHARE PRICES.........................................................................................................................9EVENT IMPACT ON THE SHARE PRICE..........................................................................................................9CALACULATION OF BETA VALUES AND EXPECTED RATE OF RETURN..........................................................9MAJOR ACCOUNTING RATIO – DEBT RATIO..............................................................................................11DIVIDEND PAYMENT AND ITS POLICY ANALYSIS........................................................................................11CONCLUSION.............................................................................................................................................11RECOMMENDATION LETTER.....................................................................................................................12REFERENCES..............................................................................................................................................12EXECUTIVE SUMMARYThe company shall present its annual report in such a, manner that even the common lay man canunderstand the financial position and the financial performance of the company and an take the

decision thereon. This report entails the details of the company not only the basis of the annualreport only but also have the historical data through which the worth of the company has beenanalysed in detail. The report has been framed with the four major purposes. The first and mainpurpose is to give the recommendation to the investors including the potential investors of thecompany as to whether they should make the investment in the company or not. For theachievement of the first purpose, the second purpose of the report has been laid down. It is toanalyze the financial statements of the company with the different accounting ratios as applicableand interpreting the results thereon about the company. The third major aim of the report is toconsider the non financial facts so as to provide the detailed information to the investors. Thenon financial fact includes the composition of the board and what types of the activities are beingcarried out by the company. The last major purpose of this report analyze the dividend policy ofthe company with regard to the financial performance of the company as to whether the companyis regular in paying the dividends and that too with the irrespective basis of the profits earned bythe company. The report containing the recommendation has thus been presented and has beendivided into different headings and sub headings so as to enable the investors to take useful andmeaningful decision.

INTRODUCTIONAs the title of the report is Advice for wealthy investor, this report has been basically envisagedfor the investors of the company and that too includes the investors who are not the real investorsof the company as on date but will become in future and is known by the name of the potentialinvestors. For the purpose of the preparation of this report, the company that has been madeavailable is FAR Limited, an Australian registered company. The annual report for the financialyear ending 2017 and 2016 has been considered. The report has been started with the detail ofthe description of the company including the history and its main activities. Along with thedescription the owner ship and the structure of the governance has been described with respect tothe shareholders who are substantial and the composition of the governance of the company.After that the detailed analysis has been made for the accounting ratios of the company and howthe same has helped in interpreting the results for the investors of the company. Then the factorshave been discussed with respect to the share price of the company and the same has beenpresented in the excel sheet with the graphs. Also the calculations has been made of theimportant factors which are relevant for determining the weighted average cost of capital whichis required for the next section. Apart from the accounting ratio, one ratio – debt ratio has beenanalysed in detail with regard to whether the company is having the adequate capital structure orany improvement is required. Thereafter the policy adopted by the company for the declarationof dividend has been detailed. The report has then concluded and ended with the due and properrecommendation to the investors.

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