Financial Analysis of Macmahon Holdings Ltd Company

This report evaluates the financial performance of Macmahon Holdings Ltd Company and compares it with its competitor Maca Limited. The analysis includes profitability, liquidity, activity, and capital structure ratios.

Executive Summary
The main aim of this report is to understand the concept of financial data in order to evaluate
the financial performance of the company. The discussion is made on the financial ratio of
Macmahon Holdings Ltd Company. The evaluation of financial ratios of the company and its
competitor Maca Limited reflects that the performance of Macmahon Holdings Ltd Company
is more stable. The investors have to invest in the Macmahon Holdings Ltd Company as its
financial performance is stable and it is improving from the previous year.

Introduction
Financial Analysis is the process of analysing, and evaluating the financial statement of the
organisation. It is essential to identify the financial position of the company while expanding
the business or investing the large amount in the different areas. In this report, the financial
ratio will be evaluated in order to analyse the financial position for the company for
investment. In this report, Macmahon Holdings Ltd Company has been taken into
consideration in order to evaluate the financial ratio and analyse the data on the basis of
evaluation. Macmahon Holdings Ltd Company provides the mining services to miner’s
throughout the Australia and Southeast Asia (Macmahon, 2018).
Part 2
A - Financial Data
Macmahon Holdings Ltd Company
MACMAHON HOLDINGS LTD (MAH) CashFlowFlag
BALANCE SHEET
Fiscal year ends in June. AUD in millions except per share data.
2017-
06
2018-
06
Total cash 63 110
Receivables 9 42
Inventories 32 42
Total current assets 164 312
Total assets 295 723
Liabilities

Current liabilities
Total current liabilities 103 227
Total non-current liabilities 7 86
Total liabilities 110 314
Total stockholders' equity 185 410
Total liabilities and stockholders' equity 295 723
MACMAHON HOLDINGS LTD (MAH) Cash Flow Flag
INCOME STATEMENT
Revenue 360 710
Cost of revenue 315 362
Gross profit 45 348
Interest Expense 0 3
Income before taxes -5 39
Net income -23 33
Net income available to common shareholders -23 33
Earnings per share
Basic -0.02 0.02
Diluted -0.02 0.02
Weighted average shares outstanding
Basic 1190 2041
Diluted 1190 2064
EBITDA 29 120

Competitor of the company- MACA LTD (MLD)
MACA LTD (MLD) Cash Flow Flag INCOME STATEMENT
Fiscal year ends in June. AUD in millions except per share data.
2017-
06
2018-
06
Revenue 496 557
Cost of revenue 456 544
Gross profit 40 14
Costs and expenses
Interest expense 4 2
Income before income taxes 44 32
Net income 32 24
Net income available to common shareholders 32 24
Earnings per share
Basic 0.14 0.09
Diluted 0.14 0.09
Weighted average shares outstanding
Basic 234 260
Diluted 235 264
EBITDA 48 34
MACA LTD (MLD) Cash Flow Flag INCOME STATEMENT
Fiscal year ends in June. AUD in millions except per share data.
2017-
06
2018-
06
Revenue 496 557

Cost of revenue 456 544
Gross profit 40 14
Interest expense 4 2
Income before income taxes 44 32
Provision for income taxes 13 10
Net income 32 24
Net income available to common shareholders 32 24
Earnings per share
Basic 0.14 0.09
Diluted 0.14 0.09
Weighted average shares outstanding
Basic 234 260
Diluted 235 264
EBITDA 48 34
B - Ratio Analysis
Financial
Ratio
Analysis
Macmah
on
MACA
LIMIT
ED
2017 2018 2017
20
18
Profitability
Ratio

Profit
Margin Net Profit -23 33 32 24
Net Sales 360
-
0.0
6 710 0.05 496
0.
06
55
7
0.
04
Gross Profit
Margin Gross Profit 45 348 40 14
Net Sales 360
0.1
3 710 0.49 496
0.
08
55
7
0.
03
Return on
Asset Net Income -23 33 32 24
Total Asset 295
-
0.0
8 723 0.05 396
0.
08
44
6
0.
05
Liquidity
Ratio
Current
Ratio Current assets 164 312 250
25
6
Current liabilities 103
1.5
9 227 1.37 100
2.
50 93
2.
75
Quick Ratio Quick assets 41 84 136
14
4
Current liabilities 103 0.4 227 0.37 100 1. 93 1.

0 36 55
Capital
Structure
Ratio
Debt Ratio Total Liabilities 110 314 129
12
7
Total Assets 295
0.3
7 723 0.43 396
0.
33
44
6
0.
28
Equity Ratio Shareholder Equity 185 410 266
32
0
Total Capital Employed 192
0.9
6 496
0.82
661 296
0.
90
40
3
0.
79
Activity
Ratio
Total Assets
Turnover
Ratio Cost of goods sold 315 362 456
54
4
Average Total Asset 445
0.7
1 656.5 0.55 384.5
1.
19
61
9
0.
88
Market
Performanc
e

Earnings per
share ratio
Net Income before
preference dividend -23 33 32 24
weighted average
number of share
outstanding 2380
-
0.0
1 4105
0.00
804 469
0.
07
52
4
0.
05
As per the evaluation of financial ratios, it has been seen that the financial performance is
improving as compare to its last year financial performance.
The liquidity ratio of Macmahon Holdings Ltd Company reflects that the amount of asset is
enhancing due to which they can easily pay the amount of liabilities. As compare to the
industry and its competitors Maca Limited, Macmahon Holdings Ltd Company has less
capability to pay its all obligations as the ratio of Maca limted is 2.75 and Macmahon
Holdings Ltd Company has 1.37 (Macmahon, 2018).
Activity Ratio of the company reflects the expenses while production of goods and services.
The ratio of the company is 0.55 in the year 2018 and the ratio of Maca limited is 0.88 which
reflects that the company invest the large amount in the expenses (Macmahon, 2018).
Macmahon Holdings Ltd Company is more stable in terms of consuming amount in expenses.
Profitability ratio of the company reflects that the company improving its financial position
due to which it attain the success in the market. As compare to the current year profit with the
competitors, it is observed that the net profit ratio of the company is 0.5 and Maca Limited
has 0.4(Macmahon, 2018). That is why; the Macmahon Holdings Ltd Company is more
stable for the investment as it has high profit.
Capital structure ratio of Macmahon Holdings Ltd Company reflects that the capital position
is improving. The debt ratio of the company is increases from 0.37 to 0.43 in the year 2017

and 2018 respectively. The debt ratio of Maca Limited is 0.28 in the year 2018 which reflects
that the Macmahon Holdings Ltd Company achieving success in the market (Macmahon,
2017). That is why; it is recommended that the Macmahon Holdings Ltd Company is best
decision to invest.
Market performance ratio indicates that the company has 0.01 share value in the market and
the value of per share of Maca Limted is 0.05 due to which the large number of investors in it
(Maca Limted, 2018). But as per the whole performance, it has been seen that the Macmahon
Holdings Ltd Company is improving with its performance but Maca Limited is getting into
the insolvency as its debt ratio is increases.
Conclusion
From the above analysis it has been seen that the financial data of the company is useful in
order to analyse the financial position of the company. While calculating the financial ratio,
the financial data helps to evaluate the ratio. In this report, the financial performance of the
company is evaluated by comparing the performance of its competitors Maca Limited. At the
end, it has been seen that the position of the Macmahon Holdings Ltd Company is more
stable as compare to Maca Limited in financial terms.

References
Macmahon. (2018) About Us. [online] Available from: http://macmahon.com.au/en-au/about-
us [Accessed 28/05/19].
Macmahon. (2017) Annual Report 2018. [online] Available from:
https://www.asx.com.au/asxpdf/20170824/pdf/43lqdsw8fmqbg8.pdf [Accessed 28/05/19].
Macmahon. (2018) Full Year Results 2018. [online] Available from:
https://macmahon.com.au/images/downloads/pdfs/Presentations/FY18-Full-Year-Results-
Final.pdf [Accessed 28/05/19].
Maca Limted. (2018) Annual Report 2018. [online] Available from:
https://www.maca.net.au/Profiles/maca/Assets/ClientData/Documents/Reports/
MACA_AR_2018.pdf [Accessed 28/05/19].