Financial Analysis of Enero Group and Aspermont Ltd

FINANCIAL MANAGEMENT

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUTION..............................................................................................................................1
FINANCIAL ANALYSIS...............................................................................................................1
Enero Group.................................................................................................................................1
Comparison and Trend Analysis of Enero Group.......................................................................1
DuPont Method: Return on invested capital................................................................................7
Working Capital management.....................................................................................................8
Market Ratios.............................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
APPENDICES...............................................................................................................................13
Operating cash cycle..................................................................................................................13
DuPont Analysis: ROE..............................................................................................................14

INTRODUTION
Financial management refers to planning, directing, organising and controlling financial
activities like the procurement & utilisation of the funds of enterprise. Financial management
involves application of the management principles to the financial resources of entity. It is
concerned with analysing and dealing and the investments for person or the business for helping
the management to make decisions. It focuses over the equities, ratios and debts. This is useful
for the portfolio management, distribution of the dividend, hedging, capital raising hedging after
analysing and evaluating the product cycles foreign currencies. Present report is based on Enero
Group that is a software and telecommunication company operating in Australia. Study will
analyse the financial performance of Enero Group and its competitor Aspermont. The companies
are operating in the same telecommunication industry. Report will include the analysis of the
Enero group with Aspermont ltd using ratio analysis, DuPont analysis for ROE and working
capital management of the two companies. The report will enhance the understanding of the
financial statement analysis and tools used for evaluating the performance and position of
company.
FINANCIAL ANALYSIS
Enero Group
Enero Group is company engaged communication and marketing services including
market research, strategy, public relations, advertising, graphic designing, communication
planning, direct marketing, event management and corporate communications. Company consists
of 10 communication and marketing service business services businesses in around eight
countries. Company mainly has 3 hubs that are Sydney, London & New York. There are 2 cash
generating units which are Operating Brands and Search Marketing CGU (Enero Group, 2019).
Operating brands of business includes Australian and International communication and
marketing services. one of the major competitor is Aspermont ltd carrying business in the same
industry.
Comparison and Trend Analysis of Enero Group.
Enero Group has been running business in the field of telecommunications but is facing
through critical times in maintaining its stability. Financial analysis of the company is carried out
using ratio analysis.
Liquidity Ratios
1

Liquidity ratio
Aspermont Limited Enero Group
2019 2018 2019 2018
Current ratio Current
assets / current
liabilities
0.24 0.45 0.39 1.49 1.72 1.59
Quick Ratio (Current
Assets -
Inventory) /
Current
Liabilities
0.24 0.45 0.39 1.44 1.72 1.56
The above table shows the analysis between the Enero group and competitor Aspermont ltd.
Liquidity position of the companies could be said as adequate as the ratio is more than 1.
2019 2018 2017
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
0.24
0.45 0.39
1.49
1.72 1.59
Aspermont ltd
Exponential
(Aspermont ltd)
Enero Group
Exponential (Enero
Group)
Figure 1 : Current Ratio
Liquidity position of the Enero Group shows a declining trend that shows liquidity
position of the company is falling. A company must have enough current assets for meeting the
short term obligations. Trend is showing fluctuations in the three years and company is required
2