Analyzing Financial and Economic Data
Added on 2020-04-07
22 Pages4490 Words149 Views
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Running Head: Financial management principles 1Project Report: Financial Management Principles
Financial management principles 2Executive summaryThis report has been prepares to analyze the fundamental analysis of ABP properties limited and AMP properties limited. Both of these companies are related to real estate industry. In this report, firstly, introduction has been given which depict about the fundamental analysis. Further, top down analysis and bottom up analysis have been studied on the basis of many methods and technique to analyze the performance of real estate industry and the
Financial management principles 3ContentsIntroduction.......................................................................................................................4Top down analysis............................................................................................................5Current interest rate:.....................................................................................................6Current value of AUD:.................................................................................................6Real estate industry of Australia...................................................................................6Future projections.........................................................................................................7Inflation rate..................................................................................................................8Fiscal policies...............................................................................................................8GDP..............................................................................................................................8Bottom up analysis...........................................................................................................8Ratio analysis................................................................................................................8ABP property group..................................................................................................8AMP limited Australia..............................................................................................8DU Pont analysis..........................................................................................................8ABP properties group limited Australia...................................................................8AMP limited.............................................................................................................8Financial data analysis..................................................................................................8ABP limited..............................................................................................................8AMP limited.............................................................................................................8Summary and recommendation........................................................................................8References.........................................................................................................................8
Financial management principles 4Introduction: Investment is an important element in the routine life of an investor. It is necessary forevery investor to identify and analyze all the relevant factors of the company and the industry, economy, country etc. before making the investment into the security. Investors could take the help of various online sources such as Morningstar, yahoo finance etc to analyze the performance of the company and then they can make a decision about investmentinto the particular country, particular industry and the particular company. Mainly 2 analysis studies are done by the analyst and the investors to analyze the market condition and the performance of the company in last few years and some upcoming years. Technical analysis and fundamental analysis are the most common method to analyze the performance of the company (Hajkowicz, Cook & Littleboy, 2012). Technical analysis study is done to make a decision for short term investment whereas fundamental analysis study is done to make a decision about the long term investment into a security. This report mainly depict about the fundamental analysis. Fundamental analysis depict the investors and analyst about the financial health of a company, for this analysis, various economical, environmental, industry situation, future prediction, DU Pont analysis, financial statement analysis, ratio analysis, GDP investigation, interest rate investigation etc. has been done. Mainly fundamental analysis includes top down analysis and bottom up analysis. Top down analysis concerns about the various external aspects such as interest rate, GDP, future prediction, industry’s condition, AUD performance etc. consequently, the bottom up analysis includes various internal aspects related to the firm such as ratio analysis, final statement analysis and DU Pont analysis etc (Lou et al, 2012). bottom up analysis is done on a particular company whereas the top down analysis depict about the entire industry and all the related aspects which could affect the performance of the industry.
Financial management principles 5AMP limited and ABP properties group limited has been taken into context for this paper. Both of these companies are performing under the real estate industry of Australia. The fundamental analysis has been done over both the company and the industry to analyze that whether it is a good choice for the investor’s to invest or investors must look over another industry. Top down analysis:Top down analysis express the concern about the various aspect related to industry, economical condition of the country, GDP of the industry, interest rate of the country, currentcondition, changes into the market and the industry etc. this part of fundamental analysis depict that an individual must look over the various factors to make a decision about the investment so that the better return could be get with the concern of less risk. Top down analysis study is performed by the investors to just to analyze the market and external factor condition. This concept depict that the external factors affect the condition of an individual
Financial management principles 6security more than the changes into the internal factors of the company. It depicts that if the economical condition or the industry position would be decreased negatively than the securitywould also be affected and thus the security price would be decreased and hence return wouldalso be less (Morote et al, 2013). Top down analysis is mainly performed by the investors to express the concern of every micro factor about the company and the industry. In this paper, ABP properties limited and AMP properties limited has been taken into the context. Both of these companies are related to real estate industry. Various macro economical and environmental aspects have been analyzed of real estate industry to manage the performance of the industry so that the impact of external factors could be analyzed and discussed over the companies which are performing their business under the real estate industry. For this report, Australian dollars condition, interest rate of the country, real estate industry, future changes in the industry, GDP, inflation rate, fiscal policies etc has been analyzed over the Australian market and the real estate industry. Further, this report depicts that how much the industry, economical and Australian market condition has affected the performance of the company and the profitability position of the company. Through this report, it has been concluded that the real estate industry is performing average right now. The various crises which have taken place in last few years have impacted the performance and the profitability position of the industry as well as the companies hugely. But currently, various strategies and the policies had helped the company to achieve the strength again and right now the performances are better than the last few years. Current interest rate:Interest rate is the amount which is charged over the principle amount as a fixed % bythe lender in return of a particular amount. Australian interest rate has been analyzed to identify the total rate charged by the Australian government over the borrowers. It has been analyzed that the interest rate of the country has been lowered from last year and the future projection of the country depict that from 1990 to 2017, the average interest rate of the country was 4.68%. Currently, a deduction of 1.50 has been noted in the interest rate of the Australia (Nelson, Balakrishnan & Sidhu, 2012).
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