Financial Analysis of ACL Energy and Origin Energy Limited

Business
Finance
Financial Analysis

BUSINESS FINANCE 1
Executive summary
This report is being presented in order to analyze the financial position and performance of
ACL energy and Origin Energy Limited. This report will compare the financial performance
of both the companies with each other in order to identify which company is suitable for
investment.

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Table of Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
ACL Energy...........................................................................................................................3
Origin Energy Limited...........................................................................................................4
Analysis of Financial Statement.............................................................................................5
Ratio Analysis....................................................................................................................6
Conclusion................................................................................................................................13
Recommendation......................................................................................................................15
References................................................................................................................................17
Appendix..................................................................................................................................21
Appendix 1...........................................................................................................................21

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Introduction
The analysis of the financial reports or statements is very important for the stakeholders and
investors like government and lender. The investors look to identify present abilities of a
company and future opportunities by evaluating the financial reports or statements
(Robinson, Henry, Pirie and Broihahn, 2015). Financial analysis is said to be a procedure if
measuring projects, businesses, budgets and other financial entities to define their suitability
and performance. Classically, financial analysis is utilized to examine whether an entity is
steady, wealthy, liquid or lucrative enough to permit a financial investment (Weaver, 2011).
While observing a particular company, a financial expert conducts examination by
concentrating on the balance sheet, cash flow statement, and income statement. Financial
statements are utilized to measure the set financial policies, recognizing companies or
projects for the investment purpose, economic trends, and creating long-term strategies for
the activities of the business (Lee and Lee, 2016).
This report highlights the analysis of financial reports of two companies namely ACL energy
and Origin Energy Limited. Ratio analysis is one of the measures that will help in
understanding the better position of the companies. The ratio analysis is said to be a
quantitative analysis of the data confined in financial statements of a company. Ratio analysis
is utilized to measure different aspects of the financial performance and operations of a
company like its liquidity, solvency, efficiency, and profitability. The investors of both the
companies will get help from the ratio analysis as a reference because it identifies the
financial health of a company. The report will discuss and compare five important ratios i.e.
Liquidity ratio, Solvency ratio, Efficiency ratio, Profitability ratio, and Market value ratio.

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ACL Energy
ACL Limited is the Australian Biotechnology company listed in Australian Stock exchange.
It has specific proficiency in the chemistry that has been involved in the development and
discovery of the products of human therapeutic. Antithrombotic drug and generic
fondaparinux of ALC Limited Company is said to be a near-term opportunity that helps in
targeting the multi-billion dollar market of heparin-drug and is predictable to be creating
company’s revenues in 2012.
One of the most advanced products of ALC energy limited company is HA-irinotecan
anticancer product and is probably to start Phase III scientific trials in 2011. It is formed with
ALC’s HyACT technology which collects the drug i.e. chemotherapeutic drug irinotecan
along with hyaluronic acid (HA). In 2007, ALC reported that excellent outcomes from Phase
II scientific trial: HA-irinotecan not just permitted more irinotecan cycles to be managed of
the cancer patients, but also formed statistically important disease monitor and a repetition in
development free survival.
The platform of VAST drug discovery m of ALC aims at G-protein coupled receptors
(GPCRs). Presently partial of drugs are up to target the market GPCRs and signify around
US$100 billion in sales. VASTTM a said to be a revolutionary drug discovery technology
involves numerous drug entrants in initial development stages. This technology’s main
advantage is that it can be used to target anyone and the target structure is nor important to be
known (Linked In, 2017).
Origin Energy Limited
Origin is a public energy company listed in Australian Stock Exchange with headquarter in
Sydney. The company was established in 2000, due to the demerger of the conglomerate of
Australia i.e., Boral Limited, which observed the energy business shaped as an innovative

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company, distinct from the construction and building material business. The SAGASCO
business is part of Origin Energy Company as part of the demerger. In 2001-02, Origin
Energy acquired a retailer of Victorian electricity license from the distributors CitiPower and
Powercor. In 2004, the SEAGas pipeline was finished and custom-built, which aided to relate
the South Australian and Victorian gas markets. In this time duration, Origin Energy
Company got 50% interest in the Company Kupe Gas Field and accomplished to gain 51.4%
interest in Edison Mission Energy in the Contact Energy of New Zealand. Origin added its
53% shared its shares to the market in Contact Energy in 2015. In 2006 the government of
Queensland broadcast the sale of the company i.e. Sun retail private limited, the former arm
of retailing of Energex to Origin for $1.200 billion. Sun retail comprised 8, 40,000 industrial,
commercial and residential customer accounts and 55,000 LPG customers (Origin Energy,
2018).
Analysis of Financial Statement
The financial report is formed with the help of general or information and requirement of the
user. The information that is transferred by the financial reports is not precise or directed in
the direction of any particular goals like the lending decision or investment decision
(Birchall, 2014). Therefore, it becomes very important to evaluate the financial reports or
statements by applying various techniques and tools to excerpt applicable and exact
information (Stickney, Weil, Schipper and Francis, 2009). The investors are very enthusiastic
to acknowledge the financial weaknesses and strength of the company. In order to know this,
comparative ratio analysis is performed which involves liquidity, solvency, profitability, and
efficiency of the company. The company’s financial ratios are compared with its major
competitor in order to know its financial strength and weaknesses. Further, analysis of ratio is
also very helpful in measuring the trends in the financial report and company’s position,