Tas Food Ltd: Computation of Beta and Required Rate of Return: 5 Rationale for Conservative Investme

Running head: FINANCE
Finance
Name of the Student
Name of the University
Authors Note
Course ID

FINANCE1
Table of Contents
Description of the Company:.....................................................................................................2
Organization structure of ownership and governance:...............................................................2
Computation of the Performance Ratios:...................................................................................3
Graphical representation of the results:......................................................................................4
Significant factor influencing the share price of Tas Food Ltd:................................................5
Computation of Beta and required rate of return:......................................................................5
Rationale for Conservative Investment:.....................................................................................6
Weighted average of cost of capital:..........................................................................................6
Implication of the WACC on Prospective investment projects:................................................7
Debt ratios for the last two years:..............................................................................................7
Gearing ratio:.............................................................................................................................8
Dividend policy:.........................................................................................................................8
Letter of recommendation:.........................................................................................................8
Reference List:.........................................................................................................................10

FINANCE2
Description of the Company:
The Tasmania food company is regarded as the brand endorser with the help of which
the artisan of the company promotes the brand to the wider group of audience. The
Tasmanian food company endorses those brands that falls within the business meeting the
promise of brand and value that is represented by the company (TasFoods Ltd 2018). The
sub-brands under the Tasmanian Food Company will have their effect on their own set of the
unique attributes which would meet the needs of the target market. This would enable the
Tasmania food company to tell the story of the provenance of their products. It enables the
company in developing the new and exciting range of goods categories namely the ethical
free range chicken which meet the changing anticipations of the customers.
Tasmania usually commands the premium brand in the form of place of origin for the
food and beverage products (TasFoods Ltd 2018). Tas food limited has positioned the
company having head office in Tasmania with senior management team that is connected
with the Tasmanian agricultural and food industry in order to obtain the advantage of the
brand.
Organization structure of ownership and governance:
The management team of the Tas Food Ltd is accountable for the strategic direction
of the organization. The organization structure is so designed that the team works closely to
make sure that the Tas Food Ltd meets the demand of the shareholders however provides the
positive, innovative and better working environment for the employees (TasFoods Ltd 2018).
The organization structure of the Tas Food Ltd comprises of the non-executive chairman,
managing director, non-executive director, chief operating officer, chief financial officer and
company secretary. Additionally, the new food production business of the company has the
strong quality assurance team responsible for quality assurance management system that

FINANCE3
provides consistency of system and procedure across the business. Additionally, the
organizational structure comprises of the food and quality assurance management system that
are subjected to numerous regular audits by the independent certification bodies and
regulations.
Computation of the Performance Ratios:
Trend
Particulars`
20
13
201
4
201
5
20
16
201
3
201
4 2015 2016
Net Profit/(Loss)
after Tax (NPAT) A
30
00
120
00
-
420
3
-
257
7
100
.0%
400.
0%
-
140.1
%
-
85.9
%
Total Assets (TA) B
47
00
0
590
00
672
7
396
72
100
.0%
125.
5%
14.3
%
84.4
%
Ordinary Equity
(OE) C
45
00
0
570
00
555
0
350
73
100
.0%
126.
7%
12.3
%
77.9
%
Total Liabilities D
20
00
100
0
117
7
459
9
100
.0%
50.0
%
58.9
%
230.
0%
Return on Assets
(ROA)
E=
A/B
6.3
8%
20.
34
%
-
62.
48%
-
6.5
0%
100
.0%
318.
64%
-
978.
85%
-
101.
77%
Return on Equity
(ROE)
F=
A/C
6.6
7%
21.
05
%
-
75.
73%
-
7.3
5%
100
.0%
315.
79%
-
1135
.95%
-
110.
21%
Debt Ratio
G=
D/B
0.0
43
0.0
17
0.1
75
0.1
16
100
.0%
39.8
3%
411.
17%
272.
43%
Taking into the considerations the above stated tabular representation TA is regarded
as the total assets while the OE is regarded as ordinary equity. Both the variables can be
interrelated with the return that is generated from the asset (ROA) and the return that is
derived from the equity (ROE) (Scott 2015). An increase in the return on the asset would
ultimately result in making an appropriate use of the asset employed in the business. This
would help in reflecting that there would increase in the net income the total asset would be
higher. Increase in the value of the asset with income being the same would help in lowering