Finance for Business - Masters

Running head: FINANCE FOR BUSINESS - MASTERS
Finance for business – Masters
Name of the student
Name of the university
Author note

FINANCE FOR BUSINESS – MASTERS 1
Table of Contents
1. Company description.................................................................................................2
2. Ownership structure...................................................................................................2
3. Key ratios...................................................................................................................2
4. Information from ASX website..................................................................................4
5. Recent announcement................................................................................................7
6. Stock field..................................................................................................................7
7. WACC (weighted average cost of capital).................................................................7
8. Optimal debt structure................................................................................................8
9. Dividend policy..........................................................................................................9
10. Recommendation..................................................................................................10
Reference.........................................................................................................................11

FINANCE FOR BUSINESS – MASTERS 2
1. Company description
K2fly Limited carries out the activities of asset management technology in
Australia. The company offers the mobility like the app related to task management,
DocMan, HandoverNotes, property Inspector, asset inspection, app for electronic
information and solution for data analysis management. Further, the company offers
asset management for complete infrastructure through the industry specific services and
software. The company has its own IPR and also the company resells the solutions
regarding the market leading solutions from UK, USA and Australia. It allows the asset
management professionals to get the access to centralised system for maintaining and
managing all the asset data for enabling more effective and efficient outcomes. It has
strong track record for allowing the organizations for making better decisions for long-
term period (k2fly 2018).
2. Ownership structure
i) Substantial shareholders
Various shareholders are there among which some are considered as substantial
shareholders. Though no shareholder holds more than 20% shares of the company, some
of the shareholder holds more than 5% shares. They are – “Kalgoorlie Mine
Management Pty Ltd” holds 8.27% shares, “Talos Mining Pty Ltd < Talos Mining A/c
> holds 5.34% shares and “MR Paul Cozzi” holds 5.34% shares.
ii) Name of key persons
 Chairman – Brian Miller
 Board members – other key personnel are –
 Neil Canby – Non-Executive Director
 James Deacon – Non-Executive Director
 Jenny Cutri – Non-Executive Director
 CEO – Brian Miller
3. Key ratios
i. Return on assets (ROA) = (NPAT / Total Assets)

FINANCE FOR BUSINESS – MASTERS 3
Debt ratio = Total liabilities / Total assets
Return on Equity (ROE) = (Net profit after tax / Ordinary equity)
Formula 2017 2016
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
Ratio
Return on assets
Return on equity
Debt ratio
“(EBIT/ TA) x (NPAT/EBIT) x (TA/OE) = (NPAT)/(OE)”
“(EBIT/ TA) x (NPAT/EBIT) x (TA/OE) = EBIT x NPAT/EBIT x 1/OE”
“EBIT x (NPAT/EBIT) x (1/OE) = (NPAT)/(OE)”
Hence, “(EBIT/ TA) x (NPAT/EBIT) x (TA/OE) = (NPAT)/(OE)”
ii. Impact of TA/OE on the management’s decision
The TA/OE variable represents the percentage of total asset of the company that
is owned by the shareholders of the company. The ratio is calculated by dividing TA
that is the total asset by OE that is the owner’s equity (Streby et al. 2014). The company
uses this metric for analysing the solvency of the company. If the company has higher
ratio that will indicate that the equity component is low and debt component is high.
Therefore, at a certain level the company will face the un-sustainability risk as higher