Ratio Analysis of AGL Limited and Buru Energy Limited

This article provides a detailed ratio analysis of AGL Limited and Buru Energy Limited. It covers financial ratios, market capitalization, and EPS. The analysis shows that fluctuation is an integral part of the financial market due to the fluctuating business environment. AGL Limited leads to improvement in 2018 by increasing its cash and cash equivalents. However, there is scope for improvement by increasing the sales of the company. The article also discusses the perception of investors and the stability of earnings of both companies.

SUMMARY

Summary
From the entire calculation given in the ratio analysis, change in equity, income and expense,
revenues, and change in liabilities, it is seen that fluctuation is an integral part of the financial
market because of fluctuating business environment (Senteney, Stowe, & Stowe, 2019). AGL
limited leads to improvement in 2018 by increasing its cash and cash equivalents that was
derived from sale of financial assets but there is scope of improvement by increasing the sales
of the company (Schmidgall, & DeFranco, 2016). In this regards, a competitor has also been
used named Buru energy limited (Díaz, & Ramírez, 2018). It is seen that competitor`s current
ratio was not quite good in 2017 but it was enhanced to the extent of 8 in 2018, which
symbolizes the company has increased its current assets. On the other hand, quick ratio for
Buru energy limited, quick ratio is appropriate which more than 1:1 is as in 2017, it was 1.37,
and it increased to 7.73 (Agrawal, & Tambe, 2016). AGL limited earns 27 percent and 29
percent in 2017 and 2018 where it can be seen that sales is appropriately high so as with the
reduction in COGS (Misund, 2017). An increase in gross profit can be due to increase in
sales. In case of AGL limited, it is seen that there is no huge difference between the
maintenance of liquidity in both the years as it is maintained at it level (AGL limited, 2018).
While seeing at the perception of the investors, it is important to overview the share price and
its related fluctuations. AGL`s market capitalisation is nearly 12.467 billion (Liang, Lu, Tsai,
& Shih, 2016). Per share ratio is 13.76 percent and EPS (Earning per share) is nearly 1.38
percent. Among both the companies named as Buru energy limited and AGL limited, it is
seen that AGL has more stable earning as compared to Buru Energy limited (Hanselaar,
Stulz, & Dijk, 2019).

References
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