Project Report on Financial Management (pdf)
Added on 2021-06-18
13 Pages3181 Words86 Views
Running Head: Financial Management 1Project Report: Financial Management
Financial Management 2Executive summaryThis report has been prepared to understand the concept of capital structure in an organization. Capital structure is a complex process which explains about the totalcost of an organization, the risky position of the organization etc. In this report, capital structure of Altium Limited has been evaluated. For identifying the capital structure position, weighted average cost of capital and gearing ratio of the company has been calculated. The entire data has been collected from the reliable websites to recognize the performance of the company and on the basis of the study; it has been found that the performance of the company is not at all good. Company is required t make few changes into the capital structure.
Financial Management 3ContentsIntroduction.......................................................................................................................4Company overview...........................................................................................................4Calculation of WACC.......................................................................................................4Cost of equity................................................................................................................5CAPM model................................................................................................................5Cost of debt...................................................................................................................6WACC..........................................................................................................................6Calculation and difficulties of gearing ratio.....................................................................7Findings............................................................................................................................7Recommendation and conclusion.....................................................................................8Reflection..........................................................................................................................9References.......................................................................................................................10Appendix.........................................................................................................................11
Financial Management 4Introduction:Capital structure is still a puzzle for the financial analyst, investors and the financial managers of an organization. The main purpose of this report is to evaluate the capital structure theories and on the basis of that evaluate the capital structure of Altium Limited. Capital structure is the proportion of entire sources on the basis of that, a company has raised the funds such as equity, debt, preferences share etc. Capital structure is depicts as debt degree in the capital or financing of a business (Abor, 2005). Capital structure is an approach to identify the business activities and the risk and cost position of an organization, capital structure of an organization affects the entire profitability level and efficiency of an organization. In the given report, capital structure of Altium Limited has been evaluated. For identifying the capital structure position, weighted average cost of capital and gearing ratio ofthe company has been calculated. And the recommendation has been given to the company about a better optimal capital structure position where the risk and the cost of an organization could be balanced and the performance of the company could be managed. Company overview:Altium limited was formerly known as Protel, until 2001. It is an Australian company which has been register in the Australian stock exchange. The company offers the software ofPC based electronic designs for the engineers who plans and designs the circuit boards. Headquarter of the company is in Sydney, Australia. The company has diversified its market into various countries such as Australia, United Kingdom, Japan, China and various other markets. The main products of the company are Altium designer, TASKING, vault, Octopart,CircuitMaker, Upverter etc. In financial year 2016-2017, the total turnover of the company was $ 66 million. Company has been founded in 1985 (Home, 2018). Altium limited is operating its business under the industry of EDA, Embedded system, FPGA, Printer circuit board. The capital structure of the company explains about riskier position. Calculation of WACC:Weighted average cost of capital is the average cost of an organization which is expected by the investors of the organization to compensate. The weighted average cost of capital of an organization is calculated after evaluating cost of debt, cost of equity and cost ofpreference share of the company. Cost of all the sources through which company has raised
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Project Report: Financial Managementlg...
|7
|1546
|173
Financial Analysis of Coca Cola Amatil: WACC, ROE, Cost of Debt and Gearing Ratiolg...
|10
|2442
|164
Accounting and Financial Analysis of ARB Corporation Limitedlg...
|12
|2579
|323
Capital Structure of Nufarm Limitedlg...
|15
|3358
|124
Financial Management of Coca colalg...
|10
|1261
|82
Introduction to Accounting and Finance Assignmentlg...
|14
|3186
|99