Financial Analysis of TasFoods Ltd Executive Summary

Financial Analysis of TasFoods
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Executive summary
The report has been undertaken for providing an understanding of the use of financial
ratio analysis to develop an insight into the long-term performance of a selected company for
analyzing its worth for investment purpose. The company that has been selected for financial
analysis purpose is TasFoods Ltd, an Australian company involved in production of agriculture
and food products. The company is performing well on social and environmental aspects as
analyzed from its social and environment reporting performance analysis. The financial ratio
analysis has examined the profitability, liquidity, efficiency, solvency and market performance of
the company. It has been identified from carrying out financial ratio analysis that the company
financial performance is not sound and there is large financial risk for the investors to invest in
the company.
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Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Overview of the company and its operations..................................................................................4
Corporate Social and Environmental Reporting Analysis...............................................................5
Financial Analysis of Tasfoods Limited over last three years.........................................................6
Overall financial analysis of Tasfoods has been presented below in table:.................................6
Profitability Analysis...................................................................................................................7
Efficiency Analysis......................................................................................................................8
Short-term solvency Analysis......................................................................................................9
Long-term solvency Analysis....................................................................................................10
Market Analysis.........................................................................................................................11
Conclusion.....................................................................................................................................12
Overall Recommendations.............................................................................................................12
Limitations of Ratio Analysis........................................................................................................12
References......................................................................................................................................13
Appendix........................................................................................................................................15
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Introduction
The present report is developed to conduct the financial analysis of Tasfoods Ltd for
facilitating the investor for decision-making. In this context, the report is developed to provide
advice to a potential investor seeking to make an investment in the firm. The financial analysis
has been carried out on the basis of the annual report to facilitate the investors in their decision-
making process. The report has covered the following aspects to provide a solid base for
decision-making of the investors. This includes providing an overview of the selected company
and its operations, critical analysis of its corporate social responsibility reporting, calculation of
the results of financial statement ratio analysis and providing an interpretation of the ratios for
guiding the investor in decision-making.
Overview of the company and its operations
TasFoods Limited is an ASX listed entity that is extremely focused on production of
cream, butter and dairy products. It is also actively involved in processing, manufacture and sale
of agricultural and food products. The company consists of following major segments that are,
dairy cream segment, poultry segment and other segments. The company vision is to create a
reputable source of high quality and innovative food products for achieving customer
satisfaction. Its mission statement is to become a global leader in providing Tasmanian sourced
food products. The company has developed a competent team of business leaders having wide
range of experience in the agriculture and food sector. The company is involved actively in
making investments and has acquired Meander Valley Dairy branded food products business in
the year 2015. The company’s strategic intent is to acquire and develop a portfolio of premium
branded food products. It aims to achieve its strategic priorities by gaining expansion into new
product categories, developing innovative products and expanding its business in the domestic
and international level (TasFoods Limited: About the Company, 2018).
The competitive advantage of the company is developing premium quality product and
meeting the customer demand for fresh food products. It is aiming to sustain its competitive
advantage by developing an efficient and agile business process and systems. The company in
order to attain this is actively promoting capital investment in improving the process efficiency
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