Company Analysis FNCE 3006 Group Assignment

Added on - 18 Sep 2019

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COMPANY ANALYSISFNCE 3006: GroupAssignmentCOMPANY NAME:________________________________________________________Group # ____________ Members:1. ______________________________________.2.______________________________________3.______________________________________4.______________________________________5.______________________________________EXECUTIVE SUMMARY:
The Algonquin Power & Utilities Corporation (APUC) is a North Americanrenewable energy and well-controlled utility company with an operating asset of about$5 billion. The corporation operates and acquires clean and green energy assets. Theseassets include the wind, solar power facilities, hydroelectric, and thermal. Also, thecompany provides sustainable utility distribution of natural gas, electricity, and water.APUC serves an extensive customer base of more than 564,000 consumers in America.The company has two fully functional subsidiaries, which are Liberty Utilities andAlgonquin Power Company. The Algonquin Power Company has an equity interest inover 33 clean energy facilities that deals with solar, thermal, wind, and hydroelectricenergy. The Liberty Utilities has more than 560,000 customers and serves 11 states inthe United States. This company has over 175,000 customers in wastewater treatmentand water distribution, 92,000 customers in electricity distribution, and 293,000connections in natural gas distribution.APUC transmission group invests in a rate controlled electric transmission andpipeline systems of natural gas in Canada and the United States. APUC being thebiggest utility company in North America, it commits itself to sustainability anddevelopment in economic, environmental, and social values. The company’s corporateresponsibility programs serve to conserve, preserve, and improve the environment. Theprimary pillar of sustainability for the corporation is the planet. APUC prioritize inprotecting the natural environment by funding various projects. The company’s marketvalue as of 18th November 2016 was $2,926.74 million, and it is expected to grow inthe future (Algonquin Power & Utilities Corporation). APUC has a projected growth of
0.47%. The company’s instalment receipts, preferred shares, and common shares aretraded on the Toronto Stock Exchange (TSE) under the symbols AQN.IR, AQN.PR.A,and AQN respectively. By investing in APUC, one is assured of great returns becausethe demand for the products the company offers is rapidly increasing.Profitability RatiosIn the past three years, AQN’s return on equity has augmented. Examining the DuPontIdentity while considering operating efficiency, asset use efficiency, and financialleverage will explain this growth. Refer toEXHIBIT Xfor financial data.Profit MarginAQN’s profit margin gives insight to how efficiently they manage their operations.Comparatively, in AQN’s last two years of operations, the differences between revenuesand costs have been more significant than industry standards. With NPI’s abnormallyhigh outlier ignored, even 2013’s profit margin for AQN is better than the industryaverage.In other words, through its efficient operations, AQN receives more bottomline than it’s competitors.Return on AssetsThe returns on book assets are favourable. Not only have the last two years been abovethe industry average, but since 2013 it has been growing. This is strength since assetusage is becoming more efficient. In 2015, about $0.10 of profit is made per dollar ofasset owned compared to the $0.02 industry average. It is also important to note that the
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