Masters in Finance for Business - Assignment

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Finance for business - Masters

Origin energy Ltd
Executive summary
Structure of ownership and governance is vital for a company to develop in the future. With
the help of this report, the overall structure and operations of Origin energy Ltd has been
taken into account to evaluate whether the company possesses the capability to expand in the
future. Besides, its dividend policies and ratios are also discussed that assists in enhancing the
discussion. This report starts with the company’s overview that is followed by its governance
and ownership structure. Thereafter, key ratios have been computed to ascertain the
company’s overall performance. Lastly, key significance is offered to the company’s debt and
dividend policy that is a major factor of future performance.
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Origin energy Ltd
Contents
Contents................................................................................................................ 3
Introduction........................................................................................................... 4
1. Company overview.......................................................................................... 4
2. Structure of ownership and governance..........................................................4
3. Fundamental ratio........................................................................................... 5
- -Liquidity ratios................................................................................................ 5
- -Long term solvency........................................................................................ 5
- -Efficiency ratio............................................................................................... 6
- Profitability...................................................................................................... 6
4. All ordinaries index.......................................................................................... 7
i. Graph.............................................................................................................. 7
ii. Computation of share prices with all ordinaries index.....................................7
5. Announcements.............................................................................................. 7
6. Beta and computation..................................................................................... 8
a. Beta computation............................................................................................ 8
7. Weighted average cost of capital (WACC).......................................................8
8. Debt ratios....................................................................................................... 9
9. Dividend........................................................................................................ 10
Recommendation................................................................................................. 11
Conclusion........................................................................................................... 12
References........................................................................................................... 13
Appendix.............................................................................................................. 14
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Origin energy Ltd
Introduction
Origin Energy has been opted for the purpose of this discussion as to whether the overall
structure and policies of the company are suitable for future developments or not. Besides,
the company’s internal state of affairs like its dividend policy and debt has also been taken
into account to ascertain its financial capability. In this context, it must be noted that internal
state of affairs must be duly supported by effective management processes so that the
company can pave a path for future progress. Furthermore, this is not feasible in the
prevalence of an ineffective ownership and governance structure as it may facilitate in
interrupting smooth flow of operations. Nevertheless, analysis of a company’s affairs through
computation of significant ratios can also assist in determining whether it has been
performing effectively in various segments or not, thereby highlighting the significance of
such ratios.
1. Company overview
Origin Energy was established in the year 2000 and was an output of the demerger of the
Australian conglomerate that is Boral Limited. Origin Energy is an energy company if
integrated nature and is mainly engaged into energy retailing, generation of power and
production of natural gas located in New Zealand, Australia and international domain. Origin
energy is helping the household of Australia by ensuring they d o not have to pay for the
increase in the price of energy. The motto of the company is to simply energy and enables
customers to compare offers easily. The focus of the company is on the LED lighting and the
sales together with the marketing are established around the efficiency in energy, proper
designs and best class service. The business strategy is mainly concerned towards growth in
the LED lighting products and touching new scales of achievement.
2. Structure of ownership and governance
The Board of Directors of the company has established high level for the employees and
officers of the company. The concept of corporate governance is provided stability though the
string principles. The board of directors serve as a support to the shareholders to have an
insight into the management of the company. To ensure a normal functioning, it is important
that the BOD follows the standards laid in the guidelines (Origin Energy, 2017). The Board
comprises of three committees that is the Audit and Finance Committee, Compensation
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