Project Report: Financial Analysis of Evergreen and Wan Hai Shipping

This project report presents a financial analysis of two Taiwanese shipping companies, Evergreen Marine Corporation and Wan Hai Shipping, aiming to identify their performance. The report utilizes various financial tools, including ratio analysis, financial statement analysis, and cross-sectional analysis, to evaluate the companies' performance. The introduction provides an overview of the importance of financial analysis for investors. The report then delves into the specifics of each company, examining their short-term solvency, financial stability, asset management efficiency, profitability, and market performance. The findings reveal that both companies face challenges due to external factors, but Wan Hai Shipping demonstrates a better performance compared to Evergreen Marine Corporation. Based on the analysis, the report concludes with investment recommendations, suggesting that investors should either avoid investing in both companies or consider Wan Hai Shipping as a more viable option. The report includes calculations of ratios and a detailed analysis of financial performance metrics, supporting its conclusions with data-driven insights.

Running Head: Financial analysis
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Project Report: financial analysis

Financial analysis
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Executive Summary
This report has been presented over two Taiwan companies to identify the performance
of the company. In this report various tools have been used to identify the performance of
both the companies. Analysis of financial performance is crucial for every investor as it helps
them to choose the best security from the market. For internal analysis, final statement of the
company and the annual report of the company has been analyzed. For external factors
company could analyze the industry report or compare the performance of the company in
any other firm which is also performing under the same industry. In this report, ratio analysis,
financial statement analysis, cross sectional analysis etc. has been done.
Through this report, it has been found that the both the companies are facing many
issues due to various external issues, still, the performance of WAN Hai Shipping is better
than the Evergreen Marine corporation and thus it is required by the investors that either they
should not invest into both the companies or if it is required than Wan Hai limited is a better
option.

Financial analysis
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Financial analysis
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Contents
Introduction.......................................................................................................................4
Evergreen Marine Corporation.........................................................................................4
Wan Hai shipping.............................................................................................................4
Calculation of ratios..........................................................................................................4
Analyze financial performance.........................................................................................5
Evergreen Marine Corporation.....................................................................................5
Short term solvency......................................................................................................5
Financial stability..........................................................................................................5
Efficiency of asset management...................................................................................6
Profitability...................................................................................................................6
Market place performance............................................................................................6
Wan Hai shipping.........................................................................................................7
Short term solvency......................................................................................................7
Financial stability..........................................................................................................7
Efficiency of asset management...................................................................................8
Profitability...................................................................................................................8
Market place performance............................................................................................8
Cross Sectional analysis...................................................................................................8
Investment recommendation and conclusion....................................................................9
References.......................................................................................................................10
Appendix.........................................................................................................................12

Financial analysis
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Introduction:
This report has been presented to examine the financial performance of Evergreen
Marine Corporation and Wan Hai shipping. Analysis of financial performance is crucial for
every investor as it helps them to choose the best security from the market. Financial
performance of a company could be affected through various internal and external factors. It
is required for an investor to look over entire internal and external actor before making a long
term investment into the company. For internal analysis, company could analyze the final
statement of the company and the annual report of the company. For external factors
company could analyze the industry report or compare the performance of the company in
any other firm which is also performing under the same industry.
Evergreen Marine Corporation:
Evergreen Marine Corporation is a Taiwanese company. It operates its function in
transporting and shipping the containers. This company has been found in 1968. This
company performs its functions globally. Headquarter of the company is situated in Luzhu
District, Taiwan. Currently 3398 people have been employed by the company and the
revenue of the company is $ 4.556 billion (Home, 2017).
Wan Hai shipping:
Wan Hai shipping is a Taiwanese company. It operates its function in transporting and
shipping the products from one place to another. This company has been found in 1965. This
company performs its functions globally. Headquarter of the company is situated in Taiwan.
Currently 4588 people have been employed by the company and the revenue of the company
is TWD 57351 million (Home, 2017).
Calculation of ratios:
Ratios analysis is one of the studies to analyze the performance of the company in
terms of various bases such as profitability, solvency, efficiency, liquidity etc. Ratio analysis
gives a brief idea to the investor about the performance and position of the company, further,
through ratio analysis last year data can also be compared from current year data as well as
the ratio analysis data could be compared to industry data to analyze the performance and the
profitability of the company (Morningstar, 2017). Ratio analysis study has been performed
over both the companies. The calculations of ratio analysis are in appendix.

Financial analysis
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In which, current and quick ratios depict about the liquid position of the company. Net
profit and margin and return on equity depict about the profitability position of the company.
Average receivable collection period, return on equity, total asset turnover, times interest
earned ratio, return on total assets etc depict about the efficiency position of the company
(Morningstar, 2017). Further, the debt ratio and earnings yield depict about solvency position
of the company.
Analyze financial performance:
Financial performance of a company could be analyze through analyzing over the
final financial statements of the company, in this report, final financial statement which are
income statement, cash flow statement, balance sheet etc have been analyzed of Evergreen
Marine Corporation and Wan Hai shipping (White, Sondh & Fried, 2005).
Evergreen Marine Corporation:
Final financial data of evergreen Marine Corporation limited has been analyzed to
evaluate the performance of the company in context of various financial data. The evaluation
over financial analysis of the company is as below:
Short term solvency:
Short term solvency position of a company depict about the ability of a firm to meet
its entire short term financial obligation. Solvency position seeks to analyze the ability of a
company to avoid the stress related to financial condition for short term (Öcal et al, 2007).
Study over the solvency position of evergreen marine depict that the solvency position
of the company has been bit better from 2015 in 2016. 2016, data depict that the current
assets and current liabilities, both has been enhanced in 2016 but the liability ratio is quite
higher and thus the current and quick ratio has been lowered. This is a good sign as currently
the revenue of the company has been reduced so company didn’t required any high amount as
well as now company can use the minimum resources at their maximum.
Financial stability:
Financial stability is a position of a company in which the financial system of the
company such as profitability of the company, return of the investors, net profit of the

Financial analysis
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company and various other points of the company is examined and it is analyzed that how
stable the position and performance of the company is.
Study over the financial stability of evergreen marine depict that the position and
performance of the company is not at all stable. Various changes have been taken place into
the performance of the company from 2015 in 2016. The revenue of the company, net profit
of the company etc has been analyzed and it has been found that the financially company is
not stable (Bramme, Brooks & Pavelin, 2006). Company is required to control over various
internal factors and make such strategies that the external factors could not affect the
performance and position of the company.
Efficiency of asset management:
Asset management efficiency is evaluated after analyzing the effectiveness and
efficiency of a company to manage its assets. Efficiency of assets management depict about
the assets position with context of various financial data. This evaluation helps the investor to
identify the operations and effectiveness of the company.
Study over the efficiency of asset management of evergreen marine depict that the
position and performance of the company’s assets has been lowered due to various external
factors but still the impact is quite little. Total assets of the company have been lowered from
2015 in 2016. The revenue of the company, net profit of the company etc has been analyzed
and it has been found that the impact of those have been imposed over the asset position of
the company. Company is required to control over various internal factors through adopting
various new strategies.
Profitability:
Profitability position of a company depict about the total profit earned by the
company in various situation and in the context of various data. Study over the profitability
position of evergreen marine depict that the position and profitability of the company’s net
profit has been lowered due to various external factors. Currently the net profit of the
company is TWD -6608 million which was TWD -4408 million in last year. This depict that
the profitability position of the company has been lowered with a huge amount. The nest
profit has been lowered due to less revenue and high operating expenses.
Market place performance:

Financial analysis
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Lastly, the market place performance of the company has been analyzed. For
performing this study, various factors of the company have been analyzed. In this report, it
has been analyzed that the market place performance of evergreen Marine Corporation depict
that the company is performing average in terms of position and performance. Through this
report, it has been analyzed that the performance of the company is not that much attractive.
Wan Hai shipping:
Final financial data of evergreen Wan Hai Shipping limited has been analyzed to
evaluate the performance of the company in context of various financial data. The evaluation
over financial analysis of the company is as below:
Short term solvency:
Short term solvency position of a company depict about the ability of a firm to meet
its entire short term financial obligation. Solvency position seeks to analyze the ability of a
company to avoid the stress related to financial condition for short term.
Study over the solvency position of Wan Hai Shipping limited depict that the
solvency position of the company has been bit bad from 2015 in 2016. In 2016, data depict
that the current assets has been lowered and current liabilities have been enhanced in 2016
and thus current and quick ratio has been enhanced. This is a bad sign as currently the
revenue of the company has been reduced so company didn’t required any high amount as
well as now company can use the minimum resources at their maximum. So it is required by
the company to reduce the level of current assets as well as current liabilities to manage the
funds of the company (Brigham & Houston, 2012).
Financial stability:
Financial stability is a position of a company in which the financial system of the
company such as profitability of the company, return of the investors, net profit of the
company and various other points of the company is examined and it is analyzed that how
stable the position and performance of the company is (Fletcher & Growing, 1979).
Study over the financial stability of Wan Hai Shipping depict that the position and
performance of this company is also not stable. Various changes and various internal and
external factors have been taken place and impacted the performance of the company from
2015 in 2016. The revenue of the company, net profit of the company etc has been analyzed

Financial analysis
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and it has been found that the financially company is not stable. Company is required to
control over various internal factors and make such strategies that the external factors could
not affect the performance and position of the company (Bartram, Brown & Fehle, 2009).
Efficiency of asset management:
Asset management efficiency is evaluated after analyzing the effectiveness and
efficiency of a company to manage its assets. Efficiency of assets management depict about
the assets position with context of various financial data. This evaluation helps the investor to
identify the operations and effectiveness of the company.
Study over the efficiency of asset management of Wan Hai Shipping depict that the
position and performance of the company’s assets has been lowered due to various external
factors but still the impact is quite little. Total assets of the company have been lowered from
2015 in 2016 (Van Horne & Wachowicz, 2008). The revenue of the company, net profit of
the company etc has been analyzed and it has been found that the impact of those have been
imposed over the asset position of the company. Company is required to control over various
internal factors through adopting various new strategies.
Profitability:
Profitability position of a company depict about the total profit earned by the
company in various situation and in the context of various data. Study over the profitability
position of Wan Hai Shipping depict that the position and profitability of the company’s net
profit has been lowered due to various external factors. Currently the net profit of the
company is TWD 1142 million which was TWD 3943 million in last year. This depict that
the profitability position of the company has been lowered with a huge amount. The nest
profit has been lowered due to less revenue and high operating expenses (Shapiro, 2008).
Market place performance:
Lastly, the market place performance of the company has been analyzed. For
performing this study, various factors of the company have been analyzed. In this report, it
has been analyzed that the market place performance of Wan Hai Shipping limited depict that
the company is performing average in terms of position and performance. Through this
report, it has been analyzed that the performance of the company is not that much attractive
(Thomas, Lyons, Chen & Pugh, 2008).

Financial analysis
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Cross Sectional analysis:
Cross sectional analysis method of analysis which compares a company’s ratios with
other company who is performing under the same industry. Usually, this analysis is done
according to the industry benchmark. In this study, ratios of Evergreen Marine Corporation
and Wan Hai shipping have been analyzed in the year of 2016. This calculations has been
given in appendix, this study depict that the performance of the Wan Hai Shipping limited is
quite better than the performance of Evergreen Marine Corporation in terms of profitability
whereas in terms of liquidity, Wan Hai is required to reduce the level of liquidity. Further, the
solvency and efficiency position of the company depict that both the companies are
performing average.
Investment recommendation and conclusion:
Through the above calculations, it has been found that the both the companies are
facing many issues due to various external issues, still, the performance of WAN Hai
Shipping is better than the Evergreen Marine corporation and thus it is required by the
investors that either they should not invest into both the companies or if it is required than
Wan Hai limited is a better option.

Financial analysis
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References:
Bartram, S. M., Brown, G. W., & Fehle, F. R. 2009. International evidence on financial
derivatives usage. Financial management, 38(1), 185-206.
Brammer, S., Brooks, C., & Pavelin, S. 2006. Corporate social performance and stock
returns: UK evidence from disaggregate measures. Financial management, 35(3), 97-116.
Brigham, E. F., & Houston, J. F. 2012. Fundamentals of financial management. Cengage
Learning.
Evergreen Marine. 2017. Home. Retrieved from https://www.evergreen-marine.com/
available on 16th Sept 2017
Fletcher, J & Growing, D 1979, Effective writing for accountants, The Institute of Chartered
Accountants in England and Wales, London.
Thomas, C, Lyons, K, Chen, P & Pugh, J 2008, Financial Resource Management, Study
Guide, Department of Maritime and Logistics Management, Australian Maritime College,
Launceston, p.3.11.
Morning star. 2017. Evergreen Marine. Retrieved from
http://financials.morningstar.com/income-statement/is.html?
t=EGMA&region=gbr&culture=en-US available on 16th Sept 2017
Morning star. 2017. Wan Hai Limited. Retrieved from
http://financials.morningstar.com/cash-flow/cf.html?t=2615&region=twn&culture=en-US
available on 16th Sept 2017
Öcal, M. E., Oral, E. L., Erdis, E., & Vural, G. 2007. Industry financial ratios—application of
factor analysis in Turkish construction industry. Building and Environment, 42(1), 385-392.
Shapiro, A. C. 2008. Multinational financial management. John Wiley & Sons.

Financial analysis
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Van Horne, J. C., & Wachowicz, J. M.2008. Fundamentals of financial management. Pearson
Education.
Wan Hai Shipping, 2017. Home. Retrieved from http://www.wanhai.com/views/Main.xhtml
available on 16th Sept 2017
White, G. L., Sondh, A. C., & Fried, D. 2005. Analysis of Financial Statement. Analysis.

Financial analysis
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Appendix:
Description Formula Evergreen Marine Corporation
2016 2015
Profitability
Net margin
Net
profit/revenues -5.31% -3.29%
Return on
equity Net profit/Equity -12.96% -7.60%
Liquidity
Current ratio
Current
assets/current
liabilities 1.28 1.33
Quick Ratio
Current assets-
Inventory/current
liabilities 1.21 1.25
Efficiency
Average
receivables
collection
period
Receivables/
Total sales*365 44.44 42.07
Times
interest
earned ratio
EBIT/ Interest
expenses (10.63) 6.79
Asset
turnover
ratio
Total sales/ Total
assets 0.66 0.69
Return on
total assets EBIT/ Net assets -0.051245297 -0.021188464
Solvency

Financial analysis
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Debt to
Equity Ratio Debt/ Equity 2.72 2.32
Earnings
Yield Earnings / Price (18.80) (12.60)
Description Formula Wan Hai Shipping
2016 2015
Profitability
Net margin
Net
profit/revenues 1.99% 6.17%
Return on
equity Net profit/Equity 3.35% 11.03%
Liquidity
Current ratio
Current
assets/current
liabilities 1.89 1.73
Quick Ratio
Current assets-
Inventory/current
liabilities 1.81 1.70
Efficiency
Receivables
collection
period
Receivables/
Total sales*365 30.77 27.84
Times
interest
earned ratio
EBIT/ Interest
expenses (5.01) 2.45
Asset
turnover
ratio
Total sales/ Total
assets 0.75 0.80

Financial analysis
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Return on
total assets EBIT/ Net assets 0.024554507 0.050099101
Solvency
Debt to
Equity Ratio Debt/ Equity 1.24 1.25
Earnings
Yield Earnings / Price 490.00 -
Description Formula 2016
Evergreen Marine
Corporation
Wan Hai
Shipping
Profitability
Net margin
Net
profit/revenues -5.31% 1.99%
Return on
equity Net profit/Equity -12.96% 3.35%
Liquidity
Current ratio
Current
assets/current
liabilities 1.28 1.89
Quick Ratio
Current assets-
Inventory/current
liabilities 1.21 1.81
Efficiency
Receivables
collection
period
Receivables/
Total sales*365 44.44 30.77

Financial analysis
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Times
interest
earned ratio
EBIT/ Interest
expenses (10.63) (5.01)
Asset
turnover
ratio
Total sales/ Total
assets 0.66 0.75
Return on
total assets EBIT/ Net assets -0.0512453 0.02455451
Solvency
Debt to
Equity Ratio Debt/ Equity 2.72 1.24
Earnings
Yield Earnings / Price - -