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HI5002 Business Finance Assignment Report

   

Added on  2020-05-28

30 Pages10618 Words76 Views
Running Head: Finance For Business1Project Report: Finance for business

Finance For Business2ContentsIntroduction.......................................................................................................................3Company description........................................................................................................3Ownership governance structure......................................................................................3Performance ratios............................................................................................................4Changes in stock price......................................................................................................6Significant factors.............................................................................................................7Calculation of CAPM and beta values..............................................................................7WACC calculations..........................................................................................................8Debt ratios.........................................................................................................................9Dividend policy..............................................................................................................10Recommendation and Conclusion..................................................................................11References.......................................................................................................................12Appendix.........................................................................................................................14

Finance For Business3Introduction: Evaluating over the financial aspects and the figures of an organization is required to make an improved conclusion about the situation of the company. Financial analysis is the field which express about the stability, volatility, profitability etc. It is mainly performed by the professionals to evaluate the financial position of business through evaluating the financial statements of the company, market stock price of the company, changes in the ordinary share price etc (Phillips and Stawarski, 2016). This report has been prepared to evaluate the financial position and the performance of Elysium resources limited. For evaluating the financial position and investment opportunity in the company, performance ratios have been calculated. Further, stock price hasbeen calculated and changes have been identified. In addition, significant factors of changes in the stock price have been evaluated and lastly, the WACC has been calculated to reach over an improved conclusion. Company description:Elysium Resources Limited is a mineral resource company which is focusing on development and exploration of numerous material and commodities. This company holds the interest in various metal projects as well which offers high return to the company. This company is registered in the security market of Australia by the name of EYM. Currently, this company is recognized as Hardey resources limited. The main project of the company is Burraga copper gold project which is covering around 221 square kilometre of the East Lachlan in Central Western South Wales. Current financial position of the company is quite strong. Mainly this company is situated in West Perth, Australia (Reports, 2018). The mineral industry of Australia has been evaluated and it has been found that there is huge competition of Elysium Resources Limited in the market. Though, the industry is performing too well and the company is suggested to grab the opportunities to enhance the market share. Ownership governance structure:Further, the study has been conducted over corporate governance and the board of members of the comapny to identify the stakeholders of the comapny and the main people which are involved in managing the operations and the performance of the company (Nobes, and Parker, 2008).

Finance For Business4Substantial stakeholders:The below table explains that the Mr Phillip John Collson is the main shareholder of the company. Further, it explains that the 3.74% of total shares are holding by Mr Philip JohnCollson. Below table briefs about other top 20 shareholders of the company which has held 30.60% of total stock of the company. (Shareholders, 2018)

Finance For Business5Main people:Further, the main people of the company have been evaluated who is in the board of member committee of the company and at the same time, who manages a better position of the company in the market. Michael D Tilley, MAXIM CARLING, MARK OHISSON, NEBZURKIC, Dean Pantin are the main executive and non executive directors of the company who manages the better position and the performance of the company in market. MAXIM CARLING is the CEO of the company and manages the operations of the company (Annual report, 2015).Further, the share in the company’s stock has been evaluated and it has been analyzed that no executive and non executive members have the ownership more than 20% and not even 5% in the total shares of the company (Niu, 2006). Performance ratios:Performance ratios are analysis method which is calculated to investigate over the performance of an organization. Performance ratios are calculated by the professionals to evaluate the operating performance of the company. Mainly, return on assets, return on equityand debt ratios is included in the performance ratios (Moles, Parrino and Kidwekk, 2011). These ratios have been calculated over Elysium Resources Limited to evaluate the financial position of the company. Following is the study of performance ratios of Elysium resources limited:Return on assets:Return on assets is a financial ratio which expresses about the total percentage of an organization which has been earn in context with the overall resources of the company. Following is the return on assets of Elysium resources limited:A.Return on assets=NPAT/ total Assets368/37939.702%This above calculation expresses about the total return on total assets of the company, the current ROA of the company is 9.702% which is competitive and express about a good position of the company in the Australian market (Marginson, 2009). Return on equity:

Finance For Business6In addition, other performance ratios have also been calculated to evaluate the position of the company. Return on equity is a financial ratio which expresses about the total percentage of an organization which has been earn in context with the total equity of the company. Following is the return on equity of Elysium resources limited:B.Return on Equity=Net profit after tax/ ordinary equity368/250214.71%This above calculation expresses about the total return on total equity of the company,the current ROE of the company is 14.71% which is competitive and express about a good position of the company in the Australian market (Damodaran, 2011).Debt ratios:Further, a debt ratio is a financial gearing ratio which expresses about the total liabilities and total assets of an organization which is mainly calculated to evaluate the capitalstructure of the company. Following is the debt ratio of Elysium resources limited:C.Debt Ratios = Total Liabilities/ totalassets1291/379334.04%This above calculation expresses about the total liabilities in context of total assets of the company, the current debt ratio of the company is 34.04% which is competitive and express about a good position of the company in the Australian market.Further, for analyzing that the given equation is right, following calculations have been done:EBIT / TA * NPAT / EBIT * TA/ OE = NPAT / OE(352/3793)*(368/352)*(3793/2502)=(368/2502)0.1470823340.147082334(Davies and Crawford, 2011)TA/OE:TA/OE stands for total assets and the ordinary equity of the company. These phenomena makes a direct impact on the position of the capital structure of the comapny and at the same time, profitability position of an organization is also affected by it. Total assets amount makes an impact over the return on assets, more the total assets of an organization

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