Financial Analysis of The a2 Milk Company and Coca-Cola Amatil

Financial
Analysis

FINANCIAL ANALYSIS 1
Overview of the company
In this report, The a2 milk company has been taken into consideration in order to
analyse the financial situation of the company. The evaluation of financial situation of Coca-
Cola Amatil will also be evaluated to analyse the position of the a2 milk company. Both the
companies are operating under the same industry of Food and beverage industry. The a2 milk
company is a public listed company that offers the A1 protein-free milk with the name of a2
milk brands (The a2 Milk Company, 2018). The Chairman of the company shared the
information with the statements and information about the company financial situation. As
per the Chairman, the company achieved annual growth of three years period 81% in revenue
and 349% in EBITDA. The statement of the Chairman “three dynamics not only create a
strong base for the company but also a bigger opportunity for growth in the future” states
that the Chairman tone is optimistic towards the future.
Income statement
As per the horizontal analysis, the a2 milk company sales is increases as the demand
of consumers is increases. It increases with the amount of 373107 (549247 to 922354) (The
a2 Milk Company, 2018). The increasing sales affect the net profit which is a major part
while evaluating the financial position of the company that is why; the sales account is
selected for the horizontal analysis. According to vertical analysis, distribution expenses of
the company is less as compare to sales due to which net profit is increases.

FINANCIAL ANALYSIS 2
Balance Sheet
The plant and equipment account in the balance sheet of the company is increases
with the 8358 to 9701. The company invest in the fixed asset due to which the total asset is
also increases and that enhance the capability of pay off the debts. Debts ratio is the major
part while evaluating the financial situation of the company. As per the vertical analysis, it
has been evaluated that the trade payable account is also increases due to which the debt ratio
of the company will be affected in the near future. The increasing amount of total asset helps
to recover the debts but as per increases trade payable decreases the capability to pay debts.