Analysis of Capital Structure and Cash Flow Statement of Champion Iron Limited

ASSESSMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
capital structure of the company..................................................................................................3
Explanation on the statement of cash flow and item in related to the items categorised in the
balance sheet and company’s capital structure............................................................................4
Material movement in the statement of change in equity reflected and reported into the
statement of cash flow.................................................................................................................5
Financial resources requirement..................................................................................................5
Disclosure of financial statement.................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Financial statement is formal document which shows liquidity, profitability and solvency
of the company. This report will be prepared on the basis of financial statement of Champion
Iron Limited. Champion Iron Limited (CIA) is engaged in the exploration, acquisition,
development and production of iron. It is mainly involved in the business of iron ore concentrate
in japan, china, India and world-wide. Headquarter of champion Iron Limited is in Australia and
Rozelle. It is traded on ASX under the symbol of CIA. This report will analyse the capital
structure of champion Iron Limited. Further, this report will also study the cash flow statement of
the company. It will address the financial resources and its requirement of the champion
company.
MAIN BODY
Capital structure of the Champion Iron Ltd.
Champion Iron Ltd. capital structure consist various form of external and internal fund
which is used to finance a business. It includes shareholder equity and debt, right issue etc.
Shareholder capital is the type of external fund which is used by company to raise capital from
the public at large. Champion Iron Ltd has 891.08M (including reserves) shareholder capital
which keep increasing year-on-year basis. Moreover, company also use long term debt fund in
order to pay fixed interest with no dilution of voting right. Optimum capital structure is used by
company to maintain debt and equity proportion. Total debt of Champion Iron Ltd. is 226.53M
which is decrease in the year 2021 as compare to previous year. Champion CEO also said
“modified capital structure will provide suitable cost saving capital structure to the company”.
Champion Iron Ltd. has a strong balance sheet by using low amount financial leverage. CDPQ's
total commitment to the company increases approximately C$57 million long debt to C$185
million preferred share. Perpetual Preferred share is the type of preferred stock which used by the
company in order to pay fixed dividend to their investor as long as company remain in business.
It also has retain earning which is increased from 2020 to 2021 from -151.75M to 284.24M.