Finance for business - Masters: Analysis of Azure Health Care Ltd and Brain Resource Ltd

Running Head: Finance for business - Masters
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Project Report: Finance for business - Masters

Finance for business - Masters
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Contents
Introduction.......................................................................................................................3
1.Description of company.................................................................................................3
a.AZURE HEALTHCARE LTD..................................................................................3
b.BRAIN RESOURCE LTD........................................................................................3
2.Performance ratio analysis.............................................................................................4
3.Stock price analysis.......................................................................................................7
4.Analysis on the changes into the stock price.................................................................9
5.Calculation on beta and cost of equity...........................................................................9
6.Dividend policies.........................................................................................................10
7.Recommendation letter................................................................................................11
References.......................................................................................................................14
Appendix.........................................................................................................................16

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Introduction:
Evaluation on the financial position and the performance of the company is one of the
important aspects while making the financial investment decision in the company. The
financial analysis process makes a great base and helps the investors to reach over a
conclusion along with some solid reasons. Finance analysis is a broad concept which offers
various types of tools and techniques to the financial analyst and the investors to identify that
whether the position of the company is attractive or the investment into the particular stock
would lead the investment amount towards the loss (Gibson, 2011).
In the given report, the Azure health care limited (AZV) and Brain Resource Ltd
(BRC) has been taken into the concern in order to evaluate the financial analysis and offer a
recommendation to the investors that whether these stocks are good option for the purpose of
the investment or not. The performance ratio analysis, stock price analysis, changes in the
stock prices, beta, cost of equity, dividend policies etc of the stocks have been evaluated in
order to identify that whether the investment into the stock of the company would offer return
to the investors or not.
1. Description of companies:
The description about the history, activities, market area etc of the business has been
measured. The descriptions of Azure health care limited (AZV) and Brain Resource Ltd
(BRC) are as follows:
a. AZURE HEALTHCARE LTD:
AZURE HEALTHCARE LIMITED is an Australian and New Zealand company which
deals in offering the service related to the healthcare to its client. The company offers the
clinical management solution in New Zealand and Australian market. The company offer
various nurse call system such as Tecera (it is for healthcare professionals), Medicom (it is
for hospitals and nursing home), CellGuard (it is for audio communication solutions) etc. the
services of the business also includes the door intercom, discrete monitoring etc. the company
has changed its name in the year of 2012 from YSV holdings limited and the company is
mainly situated at South Australia (Bloomberg, 218). Currently, various changes have been
done by the business in its internal process to improve the overall performance of the
business.

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b. BRAIN RESOURCE LTD:
Further, the BRAIN RESOURCE LTD is also an Australian company which offers the
medical services and brain products in the Australian market and US market. The main area
of service of the company is Australian and US market. The various subsidiaries are run by
the business to manage the activities and operations (Home, 2018). The company has been
founded in the year of 2005 and since then, performance of the company has been changed a
lot. The total number of employees of the company according to the annual report (2017) is
185.
Both the companies are working in the same industry and thus the evaluation and
comparison among the companies could offer better result about the market and the
investment.
2. Performance ratio analysis:
Performance ratio analysis is a financial tool which is applied by the companies, analyst
and their investors to measure the performance and the investment level of the business. It is
a board concept of the business which evaluates the liquidity, investment and profitability
level of the business and compares it with the performance of the last year or with the
competitors to identify that whether the investment into the company would offer long return
to the investors of the company (Higgins, 2012). The below are the calculations and the
analysis of performance ratios:
Liquidity ratios:
Liquidity ratios are the financial performance ratio which focuses on the balance sheet
of the company to evaluate the liquidity risk of the company and measure that whether the
company is able to pay all the current debt of the company on the basis of the available
current assets and fund of the business (Higgins, 2012).
The current assets and current liabilities head of the business has mainly been focused
in order to measure the liquidity position of the business. Current ratio and quick ratio of the
business has been calculated and compared with the other company. on the basis of the
current ratio of Azure health care limited (AZV) and Brain Resource Ltd (BRC), it has been
found that the current ratio level of Brain Resource Ltd limited is higher in the industry which

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is improving continuously and measure that the company has enough funds to repay the debt
8.01 times (Morningstar, 2018).
Further, in case of Azure health care limited, it has been found that the liquidity
position of the company is also improved in order to manage the liquidity risk. Further, the
quick ratio position of the business adds that the position of Azure health care limited is
better and the position of BRAIN RESOURCE LTD could be reduced in order to manage the
cost level of the business and the Brain Resource Ltd is also suggested to reduce to improve
the performance (Yahoo Finance, 2018).
Figure 1: Liquidity ratio
(Morningstar, 2018)
Profitability ratios:
Profitability ratios are the financial performance ratio which focuses on the balance
sheet and the income statement of the company to evaluate the profit generation capabilities
of the company and measure that whether the company has been succeed to ear the sufficient
amount of profit on the basis of the available equity, funds, resources and the sales turnover
of the business (Lord, 2007).
The sales, gross profit, operating profit, equity level, assets level etc of the business
has mainly been focused in order to measure the profitability position of the business. Return
on equity, operating profit margin %, gross profit margin % etc of the business has been
calculated and compared with the other company. on the basis of the return on equity of

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Azure health care limited (AZV) and Brain Resource Ltd (BRC), it has been found that the
ROE level of Azure health care limited is higher in the industry which is improving
continuously and explains that the company is generating 12.5% net profit on the basis of the
equity (Morningstar, 2018).
Further, in case of Brain Resource Ltd, it has been found that the ROE position of the
company has been lowered from the last year and in the industry, the ROE level is also
reduced. Further, the gross profit margin position of the business explains that the position of
Azure health care limited has been improved and position of Brain Resource Ltd has been
reduced from the last year and depict about different profit generation capabilities of the
business. Lastly, the study has been conducted on the net profit margin of the business and it
has been found that the performance of Azure health care limited has been improved from the
last 2 years. However, the reduced profit margin % has been seen in the annual report (2017)
of Brain Resource Ltd.
Figure 2: Profitability ratios
(Morningstar, 2018)
Capital structure ratios:
Capital structure ratios are the financial performance ratio which focuses on the
balance sheet of the company to evaluate the capital management position and the financial
risk of the company (Madura, 2014). This ratio measures that whether the company has