Finance for Business - Assignment Sample

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

FINANCE FOR BUSINESS1
Table of Contents
Description of Company:...........................................................................................................3
Ownership governance structure:...............................................................................................4
Substantial Shareholders of LBT Innovations Ltd:................................................................4
Main people involved in LBT Innovations Ltd governance:.................................................4
Computation of Fundamental Ratios:........................................................................................5
Short Term Solvency Ratios:.................................................................................................5
Long Term Solvency Ratios:.................................................................................................6
Asset Utilization Ratios:........................................................................................................6
Profitability Ratios:................................................................................................................6
Market Value Ratios:.............................................................................................................7
Description of Results:...............................................................................................................7
Graph of Monthly Share Price Movements:..........................................................................7
Comparative analysis with share price index to All Orders Index:.......................................8
Factors influencing share price movement of LBT Innovations Ltd:........................................9
Computation of Beta Value and Expected Rate of Return using CAPM:...............................10
Computed Beta for LBT Innovations Ltd:...........................................................................10
Computation of Required rate of return:..............................................................................10
Rationale for Conservative Investment:...............................................................................10
Computation of Weighted Average Cost of Capital:...............................................................11
Weighted Average Cost of Capital:.....................................................................................11

FINANCE FOR BUSINESS2
Explanation of WACC implications on management evaluations perspective:..................12
Debt Ratio:...............................................................................................................................12
Dividend Policy:.......................................................................................................................13
Letter of Recommendations:....................................................................................................13
Reference List:.........................................................................................................................15

FINANCE FOR BUSINESS3
Executive Summary:
The current report is based on understanding of the LBT Innovations Ltd operations, its core
business activities and the market it operates. The report would be providing a highlight of
ownership and governance structure of LBT Innovations Ltd. A fundamental analysis of the
ratios would be performed over the past two financial years to understand the financial
position of LBT Innovations Ltd. The share prices of the company over the last two years
will be compared against the all ordinaries index to understand the movement in the share
prices of LBT Innovations Ltd. The report would further providing an analysis of the factors
that impact the share price of LBT Innovations Ltd by placing emphasis on the industry wide
factors. Additionally, an understanding of the conservative environment would be provided
by placing focus on the weighted average cost of capital that would be derived by using the
CAPM model. Further emphasis would be paid on debt ratio and the dividend policy of LBT
Innovations Ltd.