Waste Management and Sustainability Analysis
Added on 2020-02-24
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Running head: BUSINESS VALUATION AND FINANCIAL ANALYSISBusiness Valuation and Financial AnalysisName of the Student:Name of the Student:Author Note:
2BUSINESS VALUATION AND FINANCIAL ANALYSISTable of ContentsIntroduction......................................................................................................................................4Macroeconomic Analysis................................................................................................................5Economic environment of Cleanaway Waste Management Limited..........................................5Macroeconomic factors that influence the performance of Cleanaway Waste ManagementLimited.........................................................................................................................................6Global Economy that has an influence on the company over the last 5 years.............................8Future Prediction.........................................................................................................................8Industry Analysis.............................................................................................................................8Examining the level of competition that takes place in industry (Waste management andrecycling) by use of Porter’s five forces model...............................................................................8Rivalry from existing competitors.............................................................................................10Threat from new entrants...........................................................................................................10Threat from substitute products.................................................................................................11Bargaining power of suppliers...................................................................................................12Bargaining power of customers.................................................................................................13Business strategy Analysis............................................................................................................13Accounting analysis.......................................................................................................................18Tracking the primary accounting policies:................................................................................18Analysing the overall accounting flexibility:............................................................................19
3BUSINESS VALUATION AND FINANCIAL ANALYSISAnalysing the overall accounting strategy:................................................................................19Analysing the overall quality of disclosure:..............................................................................20Locating the potential red flags (information distortion):.........................................................20Correcting the accounting distortions:.......................................................................................21Conclusion.....................................................................................................................................21Reference List................................................................................................................................23
4BUSINESS VALUATION AND FINANCIAL ANALYSISIntroduction With the advent of science and technology in the present global environment, all thecompanies that are performing in the global market analyses their own functions in accordance tothe industrial benchmark to the region where the organizations perform. This paper has beenconstructed in order to evaluate the financial and the annual reports of Cleanaway WasteManagement Limited with the help of several authentic sources like the financial statement ofthe organization and various other journals and internet sources. The annual report of the firmalong with the Australian annual report has been useful for attaining best possible data thatwould be useful for the completion of the paper (Ghose, Pizzol and McLaren 2017). CleanawayWaste Management Limited is an Australian Stock Exchange listed company and is associatedwith in the clean and waste industry. The concerned company is one of the renowned companiesthat is associated with the waste management industry and looks to make the country and theregion free from wastes. The company has the aim of creating a waste free environment andmaking the world and the country a better place. For the last few years, the company has been progressing in an effective manner as thecompany has been gaining profits. The need for initiating this analysis has mainly been due tothe rise in the level of competition and the increase in the level of waste in the country. Recently,there has been a rise in awareness among the consumers with respect to the environment (Betz etal. 2015). The annual report of the firm helps in obtaining useful data for the operations of thebusiness. The utilisation of several assessment techniques like the macroeconomic analysis,industry analysis, business strategy analysis and the accounting evaluation would aid inunderstanding the financial position and the business valuation of the organization.
5BUSINESS VALUATION AND FINANCIAL ANALYSISMacroeconomic Analysis Economic environment of Cleanaway Waste Management Limited The word economic environment comprises of the extrinsic variables that are associatedin the business economy and in the vaster global economy that has an effect on the operations ofthe business. The economic aim of the Cleanaway Waste Management Limited has been tocontribute in a positive manner to the concerned industry within which the firm performs andlook to provide a waste management process that is hassle free and free from economic threatsand risks. Zhanget al. (2014) has explained that economic environment can be segmented intotwo divisions namely micro and macro environment. The two mentioned types of the economicenvironment have a significant role to play in evaluating the success rate of the organization. Theperformance with respect to the economy of the community where the company is associatedwith the help of their business is important for Cleanaway Waste Management Limited. The organization concentrates on the crucial precedence that aids them in gaining theinformation with respect to the economic liability for the concerned stakeholders and undertakesconstruct various reports and articles that would be beneficial in creating awareness among thecustomers. The organization even undertakes a review and scrutiny of the waste managementservices that intends in recognising the factors that would be unfavourable and the factors thatwould be useful on the economic extent.
6BUSINESS VALUATION AND FINANCIAL ANALYSISMacroeconomic factors that influence the performance of Cleanaway Waste ManagementLimited The macroeconomic factors have been discovered to be a vast range of economicvariables that can have an impact on the financial growth and performance of the firm. Themacroeconomic factors are inclusive of growth in the population, Gross Domestic Product(GDP), rate of interest, prices of oil, unemployment etc. GDP has been known to be the finalservices and goods that are manufactured within the geographical boundary of a country, whichin this report is Australia as the paper concentrates on the business and financial analysis ofCleanaway Waste Management Limited. The indicators that are macroeconomic in nature areexploited in order to understand and compute the level of economic activity within Australia.The rate of growth in the GDP is a country is directly associated with the financial position andperformance of the company (Luthra et al. 2014). The GDP of Australia has shown a rise of2.8% on the year 2015-2016 and the country has a low rate of unemployment with a percentagevalue of 5.6%. Even though the rate of unemployment has come down, it has been observed that therehas been a rise in the level of part time and underemployment in the country at a significantlevel. The rise in the level of part time and underemployment has mainly been due to theavailability of an increasing number of labour forces in the market. The main factor for theincrease in the labour market has been migration of foreign as well as domestic population insearch of jobs and other factors (Yeheyis et al. 2013). The rise in the level of part tine andunderemployment has motivated Cleanaway Waste Management Limited to increase their labourforce so that they can undertake various plans of actions to improve their operations and expandtheir business to the next level. Another one of the economic factor has been the rise in the value
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