Stock Market Analysis and Prediction
Added on 2020-05-16
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Running Head: Finance For Business1Project Report: Finance for business
Finance For Business2Contents1.Introduction and company description....................................................................32.Ownership governance structure.............................................................................33.Performance ratios...................................................................................................44.Changes in stock price.............................................................................................55.Significant factors....................................................................................................66.Calculation of CAPM and beta values.....................................................................67.WACC calculations.................................................................................................78.Debt ratios................................................................................................................89.Dividend policy........................................................................................................810.Recommendation and Conclusion...........................................................................8References.......................................................................................................................10Appendix.........................................................................................................................11
Finance For Business31.Introduction and company description:This report depicts about the valuation and the worth of the K2Fly limited. This company is managing its business through Australian market. For evaluating the worth of the company, various financial evaluation and analysis techniques have been used. Firstly, the ownership of the company has been evaluated and in addition, the study has been conducted over the stock price, financial statement and the AORD stock to evaluate the market position and financial position of the company. The company is working under Software and service industry of Australia (About us, 2018). The financial performance of the company is not that much good. Still, the current changes of the company are quite competitive. 2.Ownership governance structure:This Section depicts about the governance structure of K2Fly limited. Substantial stakeholders: The annual report of K2Fly limited explain that around 55% stock of the company are held by the top 20 shareholders of the company out of which the highest stock are held byKALGOORLIE MINE MANAGEMENT PTY LTD which is total of 8.27% of the stock. Further, the 2nd and 3rd top shareholder of the company is TALOS MINING PTY LTD <TALOS MINING A/C> and MR PAUL COZZI who are holding 7.78% and 5.34% share of the company. Following figure-1 explain about the shareholders of the company in brief:
Finance For Business4Figure 1: Top 20 shareholders(Annual Report, 2018)Main people:Further, the main people of the company have been evaluated through the annual report of the company and it has been found that the Brian Miller is the executive chairman and the CEO of the company. Neil Candy, Jenny Cutri and James Deacon are the non executive directors of the company. Further, none of the directors and executive directors has more than 2% stocks of the company. 3.Performance ratios:Performance ratios of K2fly limited has been studied further. Following is the study of the company:Return on assets (ROA): Calculations of return on assets of the company are as follows:Return on assets=NPAT/ total Assets=(2235)/5196= -43.01%
Finance For Business5It explains that the company is facing huge loss and thus the position and performanceof the company is not at all good. Return on equity (ROE):Calculations of return on equity of the company are as follows:Return on Equity=Net profit after tax/ ordinary equity(2235)/11683-19.13%It explains that the company is facing huge loss and thus the position and performanceof the company is not at all good (Kaplan and Atkinson, 2015). Debt ratios:Calculations of debt ratio of the company are as follows:Debt Ratios = Total Liabilities/ totalassets415/51967.99%It explains that the current debt ratio of the company is not at all good. TA/OE:Further, the phenomenon of TA/Te has been evaluated and the following equation hasbeen found:TA/TE = (NPAT/ Total assets)/(NPAT/TE)TA/TE =Total assets/TEIt explains that the few changes into the total assets and the total equity of the company would directly affect the performance and the ROA and ROE of the company. ROA and ROE:
Finance For Business6 In addition, the ROA of the company is -43.01% and -19.13% which explains that theROE of the company is greater. Accoridng to XXX, ROE is always greater due to the less amount of equity in an organization in comparison with the total assets of the company. 4.Changes in stock price:Figure 2: Changes in stock price(Yahoo Finance, 2018)Evalaution: The above study and figure 2 explain about the stock price of K2Fly limited and AORD. The graph explains that the stock price of AORD is quite volatile. The correlation of the company is 0.02% which depicts about the less positive relations among the AORD and the K2Fly limited. 5.Significant factors: Further, the annual report of the company explains that the stock prices of the company have been fluctuated lot in last 2 years. The main points due to which the stock price of the company has been affected are changes in the management, win of law suits of the company, new technology of the company, better financial position of the company, financial analyst report about the company has impacted positively on the stock price of the company (Annual Report, 2018). 6.Calculation of CAPM and beta values:Beta:
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