Australian Corporate Finance Question Answer 2022

Running head: CORPORATE FINANCE
Corporate finance
Name of the Student
Name of the University
Author Note

CORPORATE FINANCE1
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Answer (a)....................................................................................................................................2
Answer (b)....................................................................................................................................3
Answer (c)....................................................................................................................................3
Answer (d)....................................................................................................................................3
Answer (e)....................................................................................................................................4
Answer (f)....................................................................................................................................4
Answer (g)....................................................................................................................................4
Answer (h)....................................................................................................................................4
3. Capital budgeting.........................................................................................................................5
Answer (a)....................................................................................................................................5
Answer (b)....................................................................................................................................5
Answer (c)....................................................................................................................................6
Answer (d)....................................................................................................................................6
Answer (e)....................................................................................................................................6

CORPORATE FINANCE2
Introduction
Santos (South Australia Northern Territory Oil Search) Ltd. is a 65-year-old Australian
energy producing company. It is also second biggest independent producer of oil as well as gas
in the country. Its main products include gas and petroleum exploration, production and
treatment of CSG and transportation of crude oil and gas by pipelines.
Discussion
Answer (a)
Working capital is amount of capital available to a company for carrying on its operations
after meeting its short-term obligations with assets, which are convertible in the short run.
Working capital efficiency is the measure of whether a company is able to generate sufficient
funds to meet its operational requirements. In 2014, the working capital efficiency ratio of Santos
is 1.061 that is just adequate to meet its short-term obligations. There is not much scope for
generation of a safe amount of working capital in this case. The company was much better off in
2013 as the working capital efficiency was 1.2 that is safer than that in 2014.