Investment Analysis of Abacus Property Company and Aveo Group Company

Running head: FINANCE FOR BUSINESS
HI5002: Finance for Business
Trimester 3 2018
Group Assignment

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FINANCE FOR BUSINESS
Executive Summary
The report that has been constructed has concentrated on the point of view of the
international institutional investors who are looking to undertake an investment in the market
of Australia. It is due to this fact that two companies have been chosen for this report that are
functional in the real estate industry in Australia. The companies that have been selected are
Abacus Property Company and Aveo Group Company. The outcome that has been attained
with respect to profitability addresses the fact that Abacus Property Company is in a much
better position that Aveo Group Company in terms of profitability. When assessing on the
basis of solvency and liquidity, Abacus Property Company is far better than Aveo Group
Company. The capital structure composition of Abacus Property Company has altered within
the three years that has been taken into consideration as their exposure towards equity has
increased and debt dependence has reduced. The analysis of all the factors leads to the fact
that undertaking investments in the shares of Abacus Property Limited is fruitful in order to
maximise the return on investment for the investors.

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FINANCE FOR BUSINESS
Table of Contents
1.0 Introduction..........................................................................................................................3
2.0 About chosen organisations.................................................................................................3
A] Brief foundation of Abacus Property Group and Aveo Group Ordinary......................3
B] Position in the market....................................................................................................4
C] Investment portfolio diagram........................................................................................4
D] Consistent growth and performance.............................................................................6
E] Property Venture overview...........................................................................................6
1.2 Quantitative Analysis.......................................................................................................7
A] Debt to Equity Ratio.....................................................................................................7
B] Equity Ratio..................................................................................................................7
C] Interest Coverage Ratio.................................................................................................7
D] Debt ratio......................................................................................................................8
3. Share Price Movement Analysis............................................................................................8
4. Calculation and Analysis of Weighted Average Cost of Capital (WACC)...........................9
5. Capital Structure Policy.........................................................................................................9
6. Recommendation Letter.......................................................................................................10
Conclusion................................................................................................................................11
Reference List and Bibliography.............................................................................................12
Appendix..................................................................................................................................14

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FINANCE FOR BUSINESS
1.0 Introduction
The reality before speculation basic leadership, every financial specialist has played
out a rundown of appraisal by utilizing diverse examination apparatuses. The point of such
evaluations was to show whether the venture choice in the organization picked will be
productive or not (Beatty and Liao 2014). This investigation was performed with considering
Abacus Property Group (ABP), an Australian Stock Exchange recorded association as the
case association and Aveo Group Ordinary additionally an Australian Stock Exchange
recorded association as the contender association (AOG). While executing this investigation,
the scientist has played out an inside and out execution assessment both as far as subjective
viewpoints and quantitative perspectives and cost of capital examination just as Capital
structure investigation (Faello 2015). The principal segment of the investigation has exhibited
the execution assessment segment, when the later part has managed budgetary assessment.
2.0 About chosen organisations
Assessment of execution of an association over a particular time allotment essentially
requires distinguishing proof of components that exhibits the current viewpoint of the
business task in an all the more clear way. Despite the fact that budgetary execution
investigation by utilizing proportion examination apparatus gives clear sign whether to put
resources into the or not, the subjective investigation including the stock value developments
will give certainty towards the financial specialists (Hoyle, Schaefer and Doupnik 2015). This
segment of the examination therefore performs both subjective and quantitative investigation
of Abacus Property Group and Aveo Group Ordinary.
A] Brief foundation of Abacus Property Group and Aveo Group Ordinary
It is noticed that the association, Abacus Property Group is an all-around
differentiated property amass that at present considered as the standout amongst the best
private value type land venture openings (Abacus Property Group 2019). The gathering
worked both in the Australia and New Zealand advertise and was recorded since 2002. In the
contemporary commercial centre, the gathering is one of the S&P/ASX 200 recorded
association. The gathering for the most part underlined on esteem expansion viewpoints and
in this way long haul absolute return and augmenting investor’s riches is its essential point.
Property speculation, property adventures, subsidize the executives, and so on are the real
exercises performed by the association.