Financial Management: Analysis of OZ Minerals' Financial Performance

Running head: FINANCIAL MANAGEMENT
Financial management
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Table of Contents
Introduction................................................................................................................................2
Financial statement analysis.......................................................................................................3
Ratio analysis.............................................................................................................................4
Comparison with industry peer..................................................................................................9
Impact of competitive and political environment on business.................................................10
Ethical considerations while becomes insolvent......................................................................11
External factors........................................................................................................................11
Likelihood for merger and acquisition.....................................................................................12
Recommendation......................................................................................................................12
Reference..................................................................................................................................13
Appendix..................................................................................................................................16

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Introduction
The main objective of the report is to focus on the financial position and financial
performance of ASX listed company OZ minerals for the year 2017 and it will compared
with the performance of the year 2016. In analysing and comparing the financial performance
of the company the report will analyse the company’s financial statements for the year ended
2017. Various key ratios those will be considered under the report are profitability ratio,
liquidity ratio, market performance ratio, efficiency ratio and capital structure ratio. After
analysing the financial position of the company the report will highlight the impact of
competitive and political environment on the business. Further, the report will discuss the
relevant ethical considerations in case the entity becomes insolvent. It will further focus on
the external factors required to be considered and potential if acquisition or merger. Finally,
on the basis of interpretation the report will deliver some recommendations regarding
whether the company is suitable for making investment into or not (Ozminerals.com, 2018).
The Australian based and ASX 100 listed company OZ Minerals is one of the biggest
mining company that is focussed on copper. It was established through merging 2 Australian
based companies Oxiana and Zinifex during the year 2008. The company is further focussed
on providing opportunities to its employees and committed for providing values, safety and
capital discipline. Main growth strategy of the company is to focus on the creation of value
for its shareholders. The company owns and operates the copper – silver – gold mine at
Prominent Hall. Further, at present it is developing biggest copper gold resources at
Carrapateena of Australia. Various mines operated by the company are West Musgrave,
Prominent Hall, Carrapateena, Centrogold, Antas and Pedra Branca. It has exceptional
experience regarding exploration in Australia and global sites. Major strategy of the company

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is to grow through the exploration which in turn will add value to the company
(Ozminerals.com, 2018).
Financial statement analysis
From analysis of the annual report of the company for the year ended 31st December
2017 it has been found that the company’s annual report includes 4 financial statements.
These are –
 Consolidated statement of comprehensive income
 Consolidated statement of changes in equity
 Consolidated balance sheet
 Consolidated statement of cash flows
From analysing above mentioned financial statements of the company it has been
identified that the operating profit of the company amounted to $ 320.70 million and net
profit was amounted to $ 231.10 million. Apart from the sales revenue, significant amount
was received by the company from changes in the inventories of concentrates and ores. Major
expenses of the company were towards consumables and other direct costs amounted to $
332.3 million and depreciation expenses amounted to $ 323.5 million. Looking into the
statement of changes in equity it has been found that the opening balance for shareholders
equity was amounted to $ 2,354.3 million whereas the closing balance of the same was
amounted to $ 2,516.3 million. The reason of changes in the opening balance and closing
balance was addition of comprehensive income and subtraction of dividends and other
transactions directly attribution to equity (Asx.com.au, 2018). While analysing the balance
sheet of the company it has been found that the balance sheet of the company is segregated
into 5 sections including the current assets, non-current assets, current liabilities, non-current
liabilities and equity. Total assets including current as well as non-current assets amounted to