Corporate Finance

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

1CORPORATE FINANCE
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Answer (a)....................................................................................................................................2
Answer (b)....................................................................................................................................3
Answer (c)....................................................................................................................................3
Answer (d)....................................................................................................................................4
Answer (e)....................................................................................................................................4
Answer (f)....................................................................................................................................4
Answer (g)....................................................................................................................................5
Answer (h)....................................................................................................................................5
3. Capital budgeting.........................................................................................................................6
Answer (a)....................................................................................................................................6
Answer (b)....................................................................................................................................6
Answer (c)....................................................................................................................................6
Answer (d)....................................................................................................................................7
Answer (e)....................................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

2CORPORATE FINANCE
Introduction
Incorporated on 18 March 1954, Santos is an Australian independent oil and gas
producing company which supplies the energy needs for major parts of Asia and Australia. The
main aim of the organisation is to create value for its shareholders. The company’s three fold
strategy focuses on three aspects called transforming, building and growing. Its activities are in
accordance with meeting its vision and mission. This task will discuss various aspects of the
financial performance of the company and form an idea of the efficiency of its operations
(Santos.com 2019).
Discussion
Answer (a)
Working capital is the difference between current assets and current liabilities in a given
financial year. Working capital efficiency is used to measure whether the company has adequate
cover for short term assets in meeting its short term obligations. In case of Santos, the working
capital efficiency has decreased from 1.204 to 1.061. In general, a current ratio of 1.2 and higher
is considered to be efficient. It can be said that the capital efficiency of Santos in 2014 is not
adequate and the operating style of the company is quite risky. It should be improved upon for
the next financial year (Robinson et al. 2015). This can be done by focussing on improving its
share of current assets and by reducing its dependence on the short term borrowings. Due to the