Principle of Financial Management.

Principle of Financial Management
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Contents
Industry Description................................................................................................... 4
a) Size of Industry & Level of Competition..............................................................4
b) Regulators of the Industry & Extent of their Power for Ensuring Compliance
within the Industry.................................................................................................. 4
c) Industry Groups regulating the Industry..............................................................4
Part 2: Company Description...................................................................................... 4
a) Main Source of Business & the products and services being sold.......................4
b) Ownership & Management Structure of Company..............................................5
c) Company’s Role within the Financial System......................................................5
Part 3: Financial Instrument Analysis.........................................................................5
a) Financial Instruments Used by Company............................................................5
b) Presence of Off Balance Sheet Business (OBS) in Company...............................6
Part 4: Analysis of financial structure.........................................................................6
(a) Key financial ratios important to the creditors...................................................6
 Current Ratio................................................................................................. 6
 Debt to Equity Ratio....................................................................................... 7
 Interest Coverage Ratio.................................................................................7
(b) Key financial ratios important to the investors..................................................7
 Price-Earnings Ratio....................................................................................... 7
 Dividend Yield Ratio....................................................................................... 7
 Return on Equity............................................................................................ 7
(c) Calculation of financial ratios those are important for creditors and investors. .8
Calculation of financial ratios those are important from viewpoint of creditors...8
Calculation of financial ratios those are important from viewpoint of investors...9
(d) Recommendation for the Company on the basis of Financial ratios Calculations
.............................................................................................................................. 10
Credit Management Analysis..............................................................................10
Investment Potential Analysis............................................................................10
Part 5: Financial Market Analysis..............................................................................11
a) Interaction of different Financial Players within the Selected Industry..............11
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b) Government Intervention within the Industry and the Actions Taken for
Ensuring Ethical Behavior within the Industry.......................................................12
c) Ethical Behavior of the Company......................................................................13
Part 6: Findings, Conclusions and Recommendations..............................................13
References............................................................................................................... 15
Appendix.................................................................................................................. 17
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Industry Description
a) Size of Industry & Level of Competition
The present assignment is conducted on the company Coca-Cola Amatil that is operating
within the beverage industry of Australia. The market size of Australia beverage sector is
expected to be reach to USD 5.813 million by the end of the year 2025 and is expected to depict
a growth of CAGR of 3.4% over the forecasted period. The revenue realized in the non-alcoholic
drink beverage segment of Australia amounts to US $ 15,000 m in the year 2019. The rising
health concerns among the consumers of Australia are leading to supporting the growth within
the soft drink segment of Australia (Statista, 2019). The companies are placing emphasis on
manufacturing advanced sugar free soft drinks for meeting the changing needs and requirements
of the consumers. There is increasing level of competition within the segment due to high growth
realized by the sector at present. The major players operating within the industry are Coca-Cola
Amatil, PepsiCo, Nestle, Bickfords Australia Pty Ltd among many others (IBIS World, 2018).
b) Regulators of the Industry & Extent of their Power for
Ensuring Compliance within the Industry
The industry is governed by the standards that have been outlined by the Food Standards
Australia New Zealand (FSANZ) and ensure that the soft drink companies comply with the
entire standard outlined by the FSANZ (Australian Beverages, 2019).
c) Industry Groups regulating the Industry
Australian Beverages Council is the industry group regulating the industry. Its members
consists of all the small, medium-size and large companies involved within the sector. The
council holds the responsibility for over-viewing and monitoring the overall activities of the
member companies to ensure they comply with the industry norms (Australian Beverages, 2019).
Part 2: Company Description
a) Main Source of Business & the products and services being
sold
Coca-Cola Amatil Limited (CCA) is an ASX listed company that is known to be one of
the largest bottlers of non-alcoholic ready to drink beverages within Asia-Pacific region. It has
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