Fundamental Analysis Method - PDF
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Added on 2021-06-17
Fundamental Analysis Method - PDF
Added on 2021-06-17
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Running Head: Bachelor or professional accounting 1Project Report: Bachelor of professional accounting
Bachelor or professional accounting 2ContentsIntroduction.......................................................................................................................3Company overview...........................................................................................................3AUSTRALIA MINES LIMITED.................................................................................3AUSTRALIAN PACIFIC COAL LTD........................................................................3Fundamental analysis........................................................................................................4Financial ratios..................................................................................................................4Short term solvency......................................................................................................4Long term solvency......................................................................................................6Asset utilization............................................................................................................9Profitability ratios......................................................................................................11Recommendation and conclusion...................................................................................14References.......................................................................................................................16
Bachelor or professional accounting 3Introduction:The report focuses on the fundamental analysis method. It measures that how the investment opportunity and the investment position of an organization could be evaluated. The report explains about the two companies Australia mines limited and Australia pacific coal limited. It measures the financial stamen of both the companies and identifies that which comapny is performing in an efficient way in the industry and how much returns could be gotby the investors through investing into the company. For evaluating the investment opportunity of both the company, fundamental ratios study has been performed on the companies. The short term solvency, liquidity, long term solvency, profitability, efficiency position etc has been evaluated and it has been measured that how well the companies are performing in the market and which company would offer more return to the investors of the company. Company overview:For the report, metals industry of Australia has been evaluated. The Australia mines limited and Australia pacific coal limited has been taken into the concern. The company overview of both the companies is as follows: AUSTRALIA MINES LIMITED:Australia mines limited is a metal company which supplies and manufactures the battery and technological metals in the international market. The Australia mines limited develops the cobalt-scandium-nickel projects in the Australian market. The projects of the company are among the largest project of Australian market (Bloomberg, 2018). The pre feasibility study of the company explains about the competitive position of the company. Financial performance of the comapny explains that the company has not generated any revenue from last few years. The company is facing huge loss from last 3 years. AUSTRALIAN PACIFIC COAL LTD:Australia pacific coal limited is a coal mining company which supplies and manufactures the coals and the metals in the international market. The Australia pacific coal limited develops the coal treatments in the Australian market. The pre feasibility study of the company explains about the competitive position of the company (Reuters, 2018). The company is operated its business form the head office which is situated at Queensland.
Bachelor or professional accounting 4Financial performance of the comapny explains that the company has not generated any revenue from last few years. The company is facing huge loss from last 3 years. Fundamental analysis:Fundamental analysis is a process of evaluating the financial position and the investment position of an organization on the basis of the financial statement of the company of last few years. The fundamental analysis uses the related factor and the financial factors of an organization to identify the performance of the company and make a decision about the financial performance of the company. It evaluates the stock of an organization on the basis of the intrinsic value and the financial factors of the company in the basis of the financial statement analysis methods to measure the performance of the company and the investment position of the company for long term (Du and Girma, 2009). In the report, fundamental analysis study has been performed on two Australian companies to identify their performance and the investment opportunity of the company. The financial ratios have been calculated to measure the performance and the position of the company. Financial ratios:Financial ratios are the part of fundamental analysis which evaluates the financial statement and the financial transactions and market position of an organization on the basis ofthe various studies to measure the performance and the position of the company. Financial ratios evaluate the main items of the financial statement and the market value of the stock of the company to measure the profitability position, liquidity position etc of the company. The financial ratios study of both the companies is as follows:Short term solvency:Short term solvency ratios explain about the skill and the ability of a business to meet entire short term financial debts and the obligations of the company. It measures the capability of a firm to neglect the financial distress in short term. The two main ratios of shortterm solvency are current ratio and the quick ratio which explains about the liquidity position of the company and the capability of the business. Current ratio:
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