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HA1022 Principals of Financial Markets Group

   

Added on  2021-05-27

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Finance
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1HA1022 Principals of Financial Markets Group Assignment
HA1022 Principals of Financial Markets Group_1

2Executive SummaryThe report has undertaken the fundamental analysis of the energy industry of Australia.The report has highlighted the top down and bottom up analysis of AGL Energy and APA GroupLimited. The overall impact of the forecasted economic fundamentals within Australia on thegrowth of the selected companies is discussed in the report. Also, the current financial situationof both the companies is also evaluated in the report.
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3ContentsExecutive Summary.........................................................................................................................2Introduction......................................................................................................................................4Overview of Energy Industry in Australia.......................................................................................4Overview of Selected Energy Companies.......................................................................................4Top-Down Analysis.........................................................................................................................5Macroeconomic Analysis.............................................................................................................5Industry Analysis.........................................................................................................................6Bottom up Analysis......................................................................................................................7Ratio Analysis of AGL Energy and APA Group.........................................................................7Profitability Analysis...................................................................................................................9Liquidity Analysis.........................................................................................................................10Capital Structure or Long Term Solvency Analysis..................................................................10Market Valuation Analysis........................................................................................................11Summary & Recommendations.....................................................................................................11References......................................................................................................................................12Appendix........................................................................................................................................13
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4IntroductionThe present report is carried out for carrying out fundamental analysis of the two ASXlisted companies operating within the same industry. The fundamental analysis is carried out foridentification of the factors that are likely to implement directional changes in the value of thetwo selected companies and also on their share prices. The factors investigated are both macroand micro in context. The fundamental analysis is carried out with the use of both top down andbottom up approach. The top-down approach is used for gaining an analysis of the overalleconomic environment and considering the impact of the forecasting economic fundamentals onthe performances of the companies selected. The bottom-up analysis is carries for analyzing thecurrent financial situation of the selected companies. The financial analysis is carried out byexamining the accounting ratios for assessing the company’s performance and its implicationsfor the industry. The report has carried out fundamental analysis of the two selected energycompanies that are, AGL Energy and APA Group stapled operating in the energy sector ofAustralia. Overview of Energy Industry in AustraliaThe energy sector of Australia is regarded to be a major contributor of the country’seconomic growth and development. The market capitalization of energy companies in the ASX200 is estimated to be about $74 billion. The large-scale growth realized by the energy sector ofthe country is due to presence of abundance of renewable and non-renewable energy sources.The higher amount of energy resources within the country is responsible for it being the ninthlargest energy producer across the world. It is estimated that energy sector of the countryaccounts for about 2.5 per cent of energy production at a global level and about 5 per cent ofworld energy exports. There is presence of major energy producing companies within the sectorcompletion each other on the basis of market share. The major competitive companies operatingwithin the sector are Woodside, Origin Energy, Santos, AGL Energy Limited, APA GroupStapled and many others (Palmer, 2013). Overview of Selected Energy CompaniesAGL Energy Limited
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