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Financial Performance Analysis (doc)

   

Added on  2020-05-16

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Running Head: FINANCE
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Finance 2ContentsIntroduction...........................................................................................................................................3About Webster Limited.........................................................................................................................3Structure- ownership and Governance...................................................................................................3Calculating Key ratios...........................................................................................................................3Stock prices...........................................................................................................................................5Announcements.....................................................................................................................................7Stock details..........................................................................................................................................7Weighted Average Cost of Capital........................................................................................................8Debt ratio analysis.................................................................................................................................9Dividend policy.....................................................................................................................................9Recommendation letter........................................................................................................................10References...........................................................................................................................................11
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Finance 3IntroductionThe report includes an overall financial analysis of an Australia based company Webster Limited. The analysis consists of the calculations of ratios like ROA, ROE and Debt ratio. It also includes examination of trend in the stock prices of the company along with the estimation of WACC. A gearing ratio and dividend policy analysis is done at the end of the report. The objective of this study is to recommend the client about the reasons for including this company in an investment portfolio.About Webster LimitedIt is a leading Australia based agriculture company which functions in two segments, Agriculture and Horticulture. It operates in agriculture sector of Australia and is one of the largest producer of walnuts that accounts almost 90% of Australia’s annual walnut corp. in agriculture, the company is one of the largest irrigated farming producers having more than 40000 hectares of fertile land. It mainly focuses on the corn, cotton and other cereals and livestock. Webster also owns a diverse portfolio of more than 200,000 mega litres of water entitlement. It is listed on ASX with a symbol ASX: WBA (Webster Limited, 2018).Structure- ownership and GovernanceMain substantial shareholders More than 20% shareholdings: no shareholderMore than 5% shareholdings: AFF Properties No 1 Pty Ltd (14.41%), Verolot Limited (8.92%), Peter Robin Joy (8.43%), Belfort Investment Advisors Limited (5.89%) and Bevan David Cushing (5.60%).Firm governance The Chairman: Chris Corrigan(Executive Chairman)Board Members: David Cushing, Chris Langdon and Mr Joe Robinson(all are non-executive directors).The CEO: Maurice Felizzi (Webster Limited, 2018).Calculating Key ratiosROA & ROEData has been taken for the past three years only, because the annual reports available on company’s website is for the year 2017 and 2016.
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Finance 4Webster Limited Financial Statements for year 2015-17Particulars201520162017AUD$'000 AUD$'000 AUD$'000 EBIT11,851-88,48157,035Net profit5,147-80,66958,284Total Assets748,954651,593634,300Total Liabilities247,863234,737149,523Shareholders' Equity501,091416,856484,7771.Rate of Return on Assets201520162017A. Net income5,147-80,66958,284B. Total assets748,954651,593634,300(A/B)0.69%-12%9%2.Rate of Return on Equity201520162017A. Net income available to equity shareholders5,147-80,66958,284B. Shareholder’s Equity501,091416856484,777(A/B)1.03%-19.35%12.02%3. Debt Ratio201520162017A. Total Liabilities247,863234,737149,523B. Total assets748,954651,593634,300(A/B)33%36%24%Proving the equationEBITTAXNPATEBITXTAOE=NPATOE201520162017AUD$'000 AUD$'000 AUD$'000 EBIT11,851-88,48157,035NPAT5,147-80,66958,284OE501,091416,856484,777TA748,954651,593634,300EBIT/TA (1) 0.02- 0.14 0.09NPAT/EBIT (2) 0.43 1.02
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