Corporate Governance and Liquidity Ratios for BUSINESS

FINANCE FOR BUSINESS FINANCE FOR BUSINESS 19 19 Finance for Business Name of the Student Name of the University Authors Note Course ID Introduction: 2 Description of the Company: 2 Corporate Governance Structure and Ownership: 3 Substantial Shareholdings: 3 Major people involved in the governance of the Firm: 4 Calculations of the Fundamental Ratios: 5 Liquidity Ratios: 5 Financial Leverage Ratios: 6 Efficiency Ratio: 6 Profitability Ratios: 7 Market Value Ratios: 7 Description of Results through

Running head: FINANCE FOR BUSINESS
Finance for Business
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Introduction:...............................................................................................................................2
Description of the Company:.....................................................................................................2
Corporate Governance Structure and Ownership:.....................................................................3
Substantial Shareholdings:.....................................................................................................3
Major people involved in the governance of the Firm:..........................................................4
Calculations of the Fundamental Ratios:...................................................................................5
Liquidity Ratios:.....................................................................................................................5
Financial Leverage Ratios:.....................................................................................................6
Efficiency Ratio:....................................................................................................................6
Profitability Ratios:................................................................................................................7
Market Value Ratios:.............................................................................................................7
Description of Results through Share Price Movement:........................................................8
Significant factor influencing the share price movement of the company are stated below:....9
Calculations of the Beta values and the anticipated rate of return by employing CAPM:......10
Computation of Beta Values................................................................................................10
Computation of Required Rate of Return:...........................................................................10
Conservative Investment:.....................................................................................................11
Computation of the Weighted Average Cost of Capital:.....................................................12
Implications of higher WACC on the management evaluations of investment prospects:..12
Debt ratio of KYCKR Ltd:.......................................................................................................13

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Dividend Policy:.......................................................................................................................14
Letter of Recommendations:....................................................................................................14
Conclusion:..............................................................................................................................15
Reference list:...........................................................................................................................16

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Introduction:
The report is based on understanding the financial performance of the KYCKR Ltd
and providing the necessary financial advice to the investors so that a viability related to
sound investment can be provided. The report would be focusing on the segments of
ownership of the KYCKR Ltd along with a descriptive summary of the overall existence. To
better gauge into the financial performance of the KYCKR Ltd a computation of ratios has
been performed to understand the liquidity, profitability, solvency, market leverage and
gearing of KYCKR Ltd. The movement in the share prices would be reflected with the help
of the graphical description of the results for KYCKR Ltd.
The study would also place emphasis on the significant factors that would be creating
an influence on the share price of the KYCKR Ltd. Additionally, to support the identified
factors of share price movement a weighted average cost of capital will be computed that
would highlight the required the rate of return for KYCKR Ltd. Emphasis would also be
placed on the debt ratio for the KYCKR Ltd to understand whether the company has followed
debt structure in the management of its capital. Analysis of the dividend policy would be
made for KYCKR Ltd and a letter of recommendations would be provided to address the
potential investors regarding the viability of making investment in KYCKR Ltd.
Description of the Company:
KYCKR Ltd is regarded as the worldwide business register that is established in
Waterford, Ireland from the year 2007. KYCKR Ltd is controlled and publicly traded
company on the Australian Securities Exchange (Kyckr 2018). The business of KYCKR Ltd
began with the simple idea of creating a business for the customers that could obtain the
access in real time from several countries across the Europe. Ben Cronin and Robert Leslie

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are regarded as the founder of the KYCKR Ltd with the initial idea of creating a Global
Business Register Limited in the year 2007.
The website of GBDR initially went live for the first time in the year 2009 went about
in eighteen European countries. From thereon, the company rapidly grew and turned out to be
leader in the providing the official live company information to electronically source the
single point admission (Kyckr 2018). The GBDR Direct recognized the rising demand for the
instant access of the real time company information that are sourced from registered business
across the world. The company became the largest authoritative company that searches the
company network that is available online and connects more than 150 business registries
across the world through API or the web portal.
Corporate Governance Structure and Ownership:
Substantial Shareholdings:
In the annual report of the KYCKR Ltd the substantial shareholders of the company
are laid out and the same is stated below;
Name of the Shareholders Total Number of Ordinary
Shares Held
Percentage of total shares
issued
Mr. Robert Leslie 9,619,247 9.53%
Citicorp Nominees Pty Ltd 9,031,760 8.95%
Mr Benjamin Cronin 8,519,129 8.44%
As evident from the above stated tabular representation of the substantial
shareholdings of the KYCKR Ltd stood below the 20% holdings as the table represents that
none of the shareholders held 20% or more of the total ordinary shares (Kyckr 2018).
Nevertheless, the three shareholders that are presented in the table holds more than 5% of the

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total ordinary shares. This included Mr Robert Leslie that held 9,619,247 number of total
ordinary shares and comprised of 9.53% of the total shares.
The Citicorp Nominees Pty Ltd held 9,031,760 of total ordinary shares and that
constituted 8.95% of the total shares that was issued (Kyckr 2018). Other shareholders
include Mr Benjamin Cronin held 8,519,129 held total number of shares that constituted
8.44% of the total shares. Based on the overall analysis of the substantial shareholdings an
argument can be bought forward by stating that the company cannot be classified as the
family company since none of the shareholders held more than 20% of the substantial shares
in KYCKR Ltd (Kyckr 2018). Additionally, the three substantial shareholders that stood for
the company held greater than 5% of the shares but not higher than 20% of the total shares.
Major people involved in the governance of the Firm:
Name Position Held Interest in
Shares
Interest in
Options
Interest in
Rights
John Van Der
Weilen
Chairman 734,404 2,000,000 Nil
David Gerard
Cassidy
Chief
Executive
Officer and
Managing
Director
4,930,212 1,500,000 3,000,000
Benjamin
Michael Cronin
Executive
Director
8,529,129 Nil 6,500,000
Robert Leslie Executive
Director
9,619,247 Nil 6,500,000
Albert YL Non- 4,930,213 1,500,000 3,000,000

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Wong AM Executive
Director
John Walsh Non-
Executive
Director
300,000 Nil Nil
Patrick Curry
O.B.E
Non-
Executive
Director
Nil 1,000,000 Nil
As evident from the above stated table it can be stated that main people that are
involved in the governance structure of the company does not hold more than 20% of the
shareholdings. An argument can be presented by stating that there is no such presence of
family members in the corporate governance of the company (Kyckr 2018). Additionally,
only Robert Leslie and Benjamin Cronin held more than 5% of the total shareholdings in the
corporate governance of the company with each holding 9.53% and 8.44% of the total
shareholdings.
Calculations of the Fundamental Ratios:
Liquidity Ratios:
Particulars` 2017 2016
$000 $000
Current Assets A 2967672.0 656304.0
Current Liabilities B 469170.0 146585.0
Inventory C Nil Nil
Prepayments & Other Assets D 101268.0 181344.0
Cash & Cash equivalents E 2670859.0 266943.0
Current Ratio F=A/B 6.33 4.48
Quick Ratio G=(A-C-D)/B 6.11 3.24
Cash Ratio H=E/B 5.69 1.82

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Table 1: Table highlighting Liquidity Ratios of KYCKR Ltd
(Source: As Created by Author)
Financial Leverage Ratios:
Particulars` 2017 2016
$m $m
Total Assets A 15314948.0 817743.0
Total Equity B 12289456.0 671158.0
Total Liabilities C 3025492.0 146585.0
Debt-to-Equity Ratio D=C/B 0.25 0.22
Debt Ratio E=C/A 0.198 0.179
Equity Ratio F=B/A 0.802 0.821
Table 2: Table highlighting Financial Ratios of KYCKR Ltd
(Source: As Created by Author)
Efficiency Ratio:
Particulars` 2017 2016
$m $m
Total Assets A 15314948.0 817743.0
Fixed Assets B 26259.0 Nil
Revenue C 1381728.0 14904.0
Trade & Other Receivables D 180686.0 19671.0
Total Asset Turnover Ratio E=C/A 0.09 0.02
Fixed Asset Turnover Ratio F=C/B 52.62 Null
Receivables Turnover Ratio G=C/D 0.13 1.32
Table 3: Table highlighting Efficiency Ratios of KYCKR Ltd
(Source: As Created by Author)

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Profitability Ratios:
Particulars` 2017 2016
$000 $000
Profit/Loss for the year A -3473328.0 -731808.0
Revenue B 1381728.0 14904.0
Total Assets C 15314948.0 817743.0
Total Equity D 12289456.0 671158.0
Net Profit/Loss Margin E= A/B -2.51 -49.10
Return on Equity (ROE) F=A/D -28.26% -109.04%
Return on Assets G=A/C -22.68% -89.49%
Table 4: Table highlighting Profitability Ratios of KYCKR Ltd
(Source: As Created by Author)
Market Value Ratios:
Particulars` 2017 2016
Earning per Share (TTM) A 0.04 0.02
Dividend per Share B Nil Nil
Market Value per Share C 0.20$ 0.20$
Dividend Payout Raio D=B/A Null Null
Dividend Yield Rate E=B/C Null Null
Price-to-Earning Ratio (TTM) F=C/A 5.10 8.97
Table 5: Table highlighting Market Value Ratios of KYCKR Ltd
(Source: As Created by Author)

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Description of Results through Share Price Movement:
5/1/2016
6/1/2016
7/1/2016
8/1/2016
9/1/2016
10/1/2016
11/1/2016
12/1/2016
1/1/2017
2/1/2017
3/1/2017
4/1/2017
5/1/2017
6/1/2017
7/1/2017
8/1/2017
9/1/2017
10/1/2017
11/1/2017
12/1/2017
1/1/2018
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
Stock Price Movements
Percentage Monthly Change Kyckr Limited Percentage Monthly Change ^AORD
Figure 1: Figure representing Stock Price Movement of KYCKR Ltd
(Source: As Created by Author)
As evident from the graphical representation for the company shares price movement
against the all ordinary index reflects that the KYCKR Ltd has reported a highly volatile
movement. The company in the month of July reported a higher share price against the all
ordinary index (Scott 2015). This share prices of the KYCKR Ltd went as high as 67.65%
during the month of June whereas the all ordinary index stood as low as 6.28%. While in the
subsequent month of July the share price movement of KYCKR Ltd reflected decline as the
share prices stood negatively at -14.04% (Moffett et al. 2014). Though the company has
managed to claw its way back in the month of August to stand positively at 2.04 against the
all ordinary index of -0.08 but in the following month of September the company reported a
major decline in the share prices of -24.00%.
The share price since then have considerably reflected a declining trend with the share
prices standing negatively against the all ordinary index (Robson, Young and Power 2017).

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The share prices throughout the course of 2016 stood negatively except in the month of June
where the company reported a highest positive share price movement against the all ordinary
index of 67.55 whereas the company also recorded as low as -24.00% in the month of
September. There is a higher amount of volatility in the share price movement throughout the
financial year of 2016 (Schaltegger and Burritt 2017). Moving to the next financial year of
2017 the share price have reflected more or less the identical volatility as the company
recorded some positive as well as the negative instances of share price movement against the
all ordinary index.
The share price for the KYCKR Ltd in the month of February stood positively at
11.76% while in the following month of March 2017 the share price declined to negatively
stand at 5.26%. Instances obtained in the latter half of the financial year suggest that the share
price movement stood higher against the all ordinary index (Macve 2015). As in the month of
August 2017 the share price of KYCKR Ltd stood positively at 41.38% against the all
ordinary index of -0.54% after recording a low of -17.07% in the previous month of July at -
14.71%. In the subsequent month of September, the share prices increased to stand at 46.34%
while the all ordinary index stood 4.03% (Hoyle, Schaefer and Doupnik 2015). However, in
the later months the declining trend in share prices continued its way.
Significant factor influencing the share price movement of the company are stated
below:
There are certain important factor that govern the share price movement of the
company. This includes the change focus of the company. KYCKR Ltd has uniquely placed
its focus on the business of technology that provides the solution to the people to protect them
against the money laundering and fraud along with tax evasion (Martin and Roychowdhury
2015). The company is trading in the direction of raising the capital and ASX consequently
has granted a trading halt in the preparation of the market entry. This ultimately created a

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significant impact on the share prices of the company resulting the share prices to fall
negatively against the all ordinary index.
Macroeconomic factors include the currency and the exchange rate fluctuations. The
current financial contribution of the group is largely reliant on the movement in the exchange
rates among the Australian dollar and certain number of overseas currencies (Hoitash and
Hoitash 2017). The exchange rate among the numerous nations fluctuates substantially and
this results in fluctuations that adversely create an impact on the operating results of the
group and the financial position. As a result of this share prices of the company is
considerably impacted.
The industry factors include the market risks as the KYCKR Ltd is exposed to the risk
of currency because of the foreign exchange fluctuations in rate of currency (Henderson et al.
2015). The foreign currency risks originate from the future commercial transactions and the
same that is identified in the financial assets of the KYCKR Ltd. As a result of this there is a
significant movement as well as volatility in the share price movement of KYCKR Ltd.
Calculations of the Beta values and the anticipated rate of return by employing CAPM:
Computation of Beta Values
The calculated amount of beta for the company stood 0.00.

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Computation of Required Rate of Return:
βa 0.00
Risk Free Rate (Rf) 4%
Expected market return of
Emmerson Resources (Rm1) 6%
Required rate of return 4.00%
Table 6: Table representing the Required Rate of Return
(Source: As Created by Author)
As evident from the above stated tabular representation the required rate of return of
the company stood 4.00%.
Conservative Investment:
KYCKR Ltd in the last two financial year reported a significant volatile in price. The
share price of the company been relatively low (Horton 2018). The future cash flow of the
company is poor and this can be primarily reflected on the dividend data as company has not
provided any divided in the past nor there is any plan of providing dividend to its
shareholders in the future. Gauging into the data of the company it can be stated that KYCKR
Ltd is a loss making company and comparatively the share price of the company stands
below Australian internet industry average.
Gauging into the past performance of the company the KYCKR did not reported an
instance of profit making and the company’s yearly average earnings growth stood negative
over the period of five years (Horton 2018). Due to the unavailability of the growth over the
past five year the company has not reported any instances of profit. Findings from the

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analysis represents that the it is not possible for the company to establish if KYCKR Ltd has
efficient shareholders as the company is a loss making (Lallemand and Strauss 2016). The
rationale behind the analysis of the financial health is that the company does not has the
instances of providing dividend to its shareholders. Furthermore it is difficult to establish the
efficiency of the company in making an effective use of its assets in comparison to the last
year Australian internet industry average because the company has reported loss (Engel
2016). The capital structure of the company also stood negatively as over the last three years
the company is presently viewed as the loss making firm. Hence, the overall analysis suggest
that the company is viable option of making an investment.
Computation of the Weighted Average Cost of Capital:
Re Cost of equity
Rd Cost of debt
Equity Market value of the firm’s equity
Debt Market value of the firm’s debt
E/V
Percentage of financing that is
equity
D/V
Percentage of financing that is
debt
TC Corporate tax rate
Re 4.0%
Rd 6%
Equity 12289456
Debt 3025492
E/V 0.802
D/V 0.20
TC 30%
WACC 4.04%
Table 7: Table representing the Weighted Average Cost of Capital
(Source: As Created by Author)

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As evident from the above stated tabular representation the weighted average cost of
capital for KYCKR Ltd stood 4.04%.
Implications of higher WACC on the management evaluations of investment prospects:
The entire source of capital along with the common stock, preferred stock, bonds and
any other forms of long term debt are involved at the time of computing the WACC
calculations (Gleim, Kustanovich and Irwin 2017). An organizations weighted average cost
of capital rises with the rise in the beta along with the increase in the rate of return on the
equity. With the rise in the weighted average of cost of capital there is a fall in the value and
rise in the risk. A higher WACC has higher implications on the management assessment of
the investment prospects and that typically provides a signal that there is a higher sum of risk
related with the operations of the organizations.
The WACC of the organizations is usually used to project the anticipated costs
relating to most of its debt financing sources. This comprises of the payments that is made on
the debt obligations or cost associated with the financing of the debt (Thomson 2017). The
WACC is regarded as the vital aspect in the considerations of the company loan request and
for functional valuation. Therefore, there are organizations that look forward to reduce the
WACC with the help of cheaper sources of financing (Chen, Shroff and Zhang 2017). As a
result of this the investors may express their concern relating to higher WACC and may move
somewhere else in the market for deriving better return.
Debt ratio of KYCKR Ltd:
The debt ratio can be defined as the financial ratio that is used in measure the degree
to which the company extends its leverage (Toms and Fleischman 2015). The debt ratio for
the company stood during the financial year of 2016 0.17 while the debt ratio for the
company stood 0.19 for the financial year of 2017. KYCKR Ltd does not has any debt and

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the company over the past five years have not taken any debt. The capital structure of the
company is efficiently maintained by the directors.
In an attempt to amend their gearing ratio the company has issued to its vendors
46,297,500 of fully paid shares as a consideration of acquisition (Maheshwari 2015). There is
no such changes in the capital structure of the company.
Dividend Policy:
During the financial year of 2017 there were no dividends paid by the KYCKR Ltd to
its shareholder neither did the company recommend or declared present or the earlier
financial year.
Letter of Recommendations:
To Client Company
From Financial Advisory Team
We would like to draw your attention from the above stated analysis that the company
is not suitable for making investment. The share prices of the company over the last 12
months have reported a higher amount of volatility against the all ordinary index. The future
cash flow of KYCKR Ltd appears to be low and the share prices of the company been trading
at a low of A$0.17. The company is a loss making firm and its value is not comparable
against the value of the Australian internet industry average.
The growth of the KYCKR Ltd is also uncertain and with limited availability of the
information the earnings of the company stood relatively lower in comparison to the
Australian internet market. KYCKR Ltd does not generates profits and their yearly average
growth rate has been negative over the period of five years. The company has also not

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reported dividend payment to its shareholders neither the company recommend in future of
paying any dividend. A recommendations can be drawn by stating that the company is not
suitable for making investment and the investors are request to abstain from making any
investment in the KYCKR Ltd.
We anticipate that the information provided in analysis is helpful in meeting your
anticipation and look forward to provide you service in future.
Thank You
Conclusion:
The report can be concluded by stating that company has been a loss making venture
over the period of five year trend. The share prices of KYCKR Ltd has traded in the ASX as
low as A$ 0.17 and there is no such instances of providing the returns to the shareholders
appear. With the limited availability of the information the efficiency in the areas of return on
assets is not adequate as the company is a loss making venture. On a conclusive note it can be
stated that the company does not provide any dividends to its shareholders and hence it is not
a suitable venture of making an investment for the shareholders.

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