ACC701 Financial Analysis Report: BCI Minerals Limited Performance

This report presents a financial analysis of BCI Minerals Limited, an ASX-listed company in the metal and mining industry, as part of the ACC701 course. The analysis examines the company's financial performance over a period, utilizing ratio analysis to assess profitability, liquidity, and efficiency. Trend analysis and common-size analysis (vertical analysis) are also employed to identify patterns and assess the proportion of different items within the financial statements. The analysis reveals declining revenues, decreasing share prices, and a concerning trend in key financial metrics, suggesting a need for strategic adjustments. The report highlights the deterioration in BCI Minerals' financial health, with the vertical analysis indicating a heavy reliance on internal funds and savings, pointing towards declining operations. Overall, the report provides insights into the company's financial position and offers recommendations for future strategic decisions.

FINANCIAL ANALYSIS- BCI MINERALS
LIMITED

INTRODUCTION
 An entity is comprised of a number of
stakeholders.
 Various stakeholders contributes resources,
capital or efforts in the functioning and the
success of organisations.
 The financial analysis aids in the economic
decision making for each stakeholder group.

FINANCIAL ANALYSIS
SIGNIFICANCE
 One of primary tools for
economic decision making.
 Sheds light on various business
aspects such as profitability,
efficiency and liquidity.
 The popular techniques include
ratio analysis, horizontal or
trend analysis and the common
size financial statements.

BCI MINERALS LIMITED
 Primarily based at Australia.
 ASX symbol: BCI
 Industry profile: Metal and
Mining.
 Current corporate structure:
Board includes four directors
out of which three are non-
executive director and one is
the managing director.

CURRENT PERFORMANCE HIGHLIGHTS
(Source: Market Index, 2019)

CURRENT PERFORMANCE
TRENDS
• Declining share prices.
• Whopping 92 percent fall in share
prices in five years.
• 14 percent share price fall in last
thirty days.
• The company is running on lower
average return on equity of 2.4
percent as compared to industry
vitals.

RATIO ANALYSIS
 Examination of Risk,
Profitability, Solvency,
and Efficiency.
 Profitability ratios of
company BCI Minerals
Limited highlight the
consistent decline in
revenues, increase in
administrative expenses,
wipe off of the earnings.

RATIO ANALYSIS
 Structural Ratios: liquidity
position of the company has
improved since year 2015.
 Debt ratio: Reduction in the
borrowings namely overdraft,
secured loans of the entity.
 Efficiency Ratios and
Employee Ratio: The entity
has failed to achieve efficient
yield from resources.

HORIZONTAL ANALYSIS
 Aids in comparison of the
data for two or more years.
 Also known as trend
analysis.
 Spots growth pattern.
 Trend Analysis Insight:
Consistent decline in the
revenues of BCI Minerals
Limited.

HORIZONTAL ANALYSIS
 Revenues have approximately declined
about 93 percent from the year 2014.
 Decline of over 352 percent in the current
assets.
 Fixed assets reduced considerably by 327
percent.
 Entity’s going concern seems to be in
danger.

VERTICAL ANALYSIS
 Also referred to as common size
analysis.
 Individual line items are presented
in the form of a proportion of their
total accounts.
 Common Size Analysis Insight:
Fixed assets of the entity continue
to be the major portion of the
assets of BCI Minerals Limited.

VERTICAL ANALYSIS
 Sharp increment in the other noncurrent assets over
period of five years.
 Other non current assets account for 14 percent of
the total assets in year 2018.
 Percentage of total equity has improved
considerably.
 Equity percentage: 61 percent in the year 2014
to 85 percent in year 2019.