Analysis of the Net Working Capital position

BUSINESS FINANCE

Contents
Introduction................................................................................................................................2
Description of the company and the business............................................................................2
Financial analysis.......................................................................................................................2
Analysis of the Net Working Capital position.......................................................................2
Analysis of the cost of capital of the company......................................................................3
Ratio analysis for the liquidity and the capital structure of the company..............................3
Conclusion..................................................................................................................................6
References..................................................................................................................................8

Introduction
The company AGL Energy Limited is a renowned Australian organisation engaged in the
integrated energy business. The business includes the various kinds of energy generation such
as thermal energy, natural gas, renewable energy sources like water and solar energy as well
as the storage of the same. In the complex business world of today, it is significant for the
managers to be aware of the various aspects of the business, and financial analysis is one
such means to evaluate the performance of a business. The following work is aimed at
evaluating the financial parameters of liquidity and capital structure of the company AGL
Energy Limited. The various techniques that would be employed for the said financial
evaluation is that of the ratio analysis, and the computations of the working capital and the
cost of equity.
Description of the company and the business
The company AGL Energy Limited was founded in the year 2006. The company is operating
in the Australia since 180 years and is known to be one of the first limited companies of the
country (AGL Energy Limited, 2020). The registered head office of the company is located at
Sydney, NSW. The organisation is popularly known as the only energy provider that
comprised of full suite of renewable energy production, and is engaged in the provision of the
energy to millions of Australians. In addition, the company has an active participation in the
wholesale markets of gas and electrical wholesale markets and is recognised to serve
numerous customer accounts to the tune of 3.7 million. The company was officially listed on
the Australian Stock Exchange on 12/10/2006 and the trading symbol of the company is
“AGK (Australian Stock Exchange, 2020).”
Financial analysis
The decision making of various stakeholders is dependent on the varied qualitative and
quantitative factors. The financial analysis of a business of a company aids in the
simplification of the financial data and enables easy comparison from the past year
performances as well as the industry benchmarks (Williams and Dobelman, 2017). The
financial analysis of the various key aspects of the business of the AGL Energy Limited is
conducted as follows.