Question: To Complete This Assessment Task You Must:
1. Select a public listed (non-financial industry) company that you would like to analyse. Obtain its financial statements from the ASX.com.au or from the company’s publicly available annualreport on its website. Do not select companies you have benchmarked before in accounting subjects. You could also use the IBISWorld Industry reports database in the Library (ask your campus librarian).
a. Review and consider the company’s profile and financialstatement.
b. Select another company about the same size from the same industry and obtain its financial data (this is referred to as benchmarking company below).
Consult with your learning facilitator if you need help in selecting an organisation.
2. Introduce your company, its industry, and your benchmarking company at the beginning of your case study analysis. This is a brief introduction only. No more than 150 words.
3. Perform a complete ratio analysis on each company (add this analysis as an appendix to your case study). You are not being assessed on your ability to do maths. Just provide the ratios, not any calculations you did manually or in Australian Tax Office/government business site calculators. This could be in a table.
a. Break your ratio analysis into an evaluation of the companies’ liquidity, profitability, capital structure and market ratios.
b. Choose the following ratio from each broad ratio category at a minimum for analysis:
i. Liquidity – Current ratio
ii. Profitability – Return on Equity ratio
iii. Capital Structure Ratio – Debt (Gearing) ratio
iv. Market Ratio- Price-Earnings ratio
4. Interpret the selected ratios and any other financial data you believe is relevant to what you have covered in modules 1 to 4. Evaluate your chosen company’s financial operations and performance. Approximately 1000 words. Use the following questions to guide your analysis:
a. Based on a trend analysis, elaborate on whether the company you have chosen is improving or deteriorating in terms of its liquidity and profitability ratios, highlighting any areas (and appropriate financial actions) for improvement. This is not about marketing/customer service or other non-financial operations.
b. How does the company compare to its peers, i.e. benchmarking? This comparison can be done from the industry averages you find by researching the industry (or
else, to those from the benchmarking company). Would there be any issues of concern and, if so, how to address them?
c. Is it possible to identify any relationship between liquidity and profitability ratios? Which is more important for the survival of the company in the long run as well as short run?
d. How well does your chosen company compare with the benchmarking company? Which component of your company’s Return on Equity is superior, and which are inferior?
e. Do you want to increase your marks? You can also use the DuPont Analysis to further strengthen your analysis and any other ratios you decide to calculate and
add to your table in section 3.
5. Identify how using ratios and financial data will assist you to be a successful entrepreneur and potentially attract debt or equity funding. Approximately 200 words.
6. Provide a brief conclusion to your case study analysis. No more than 150 words.
Answer:
Introduction
Bega cheese ltd is a dairy and food company in Australia. Bega ltd was founded as an agricultural cooperative in the year 1899 and it was listed on the Australian Securities Exchange in the year 2011, and in that year, it became a public company. Its headquarter is in Bega Australia. Currently, it is one of the largest companies in the dairy sector in Australia. The company earns its revenue by processing and manufacturing dairy and different food-related products (Bega Cheese Ltd, 2021).
Inghams Group Ltd was founded in the year 1918 as a family business by Walter Ingham in Liverpool. The company mainly supplies chicken and plant-based protein products in the restaurants, wholesale, and export channels. Since 1990 it is operating as a fully integrated chicken company. The business was expanded by the combination of organic growth and acquisition in order to be the largest integrated poultry producer all over Australia and New Zealand (Inghams Group Ltd, 2021).
Answer 3: Ratio Analysis
Answer 4: Analysis Of Financial Performance
On the basis of ratio analysis, it has been seen that the liquidity ratio of Bega cheese in 2020 was 1.34 whereas in 2021 it decreased to 1.22 which indicates that the liquidity position of the company has deteriorated. The profitability ratio in 2020 was 2.62% whereas in 2021 it increased to 5.73% which indicates that the profitability position of the company has improved. The capital structure ratio in 2020 was 42.81% whereas in 2021 it increased to 49.29% which indicates that risk in the company is increasing. The market ratio in 2020 was 0.22 whereas in 2021 it decreased to 0.08 which indicates that less amount is paid for every dollar of earnings that is received and it is attractive to investors. Based on the ratio analysis of Inghams Group Ltd, it has been seen that the liquidity ratio in 2020 was 1.03 whereas in 2021 it decreased to 1 which indicates that the liquidity position of the company has deteriorated. The profitability ratio in 2020 was 31.06% whereas in 2021 it increased to 50.92% which indicates that the profitability position of the company has improved. The capital structure ratio in 2020 was 94.98% whereas in 2021 it decreased to 93.57% which indicates that risk in the company is decreasing and the debt is also decreasing. The market ratio in 2020 was 0.16 whereas in 2021 it decreased to 0.07 which indicates that less amount is paid for every dollar of earnings that is received and it is attractive to investors. Hence, based on the above analysis it can be said that both the company should focus on improving the liquidity and the capital structure ratio in order to improve its financial performance.
Reference
Inghams Group Ltd (2022). Retrieved 15 July 2022, from https://nerdyturtlez.com/tutor/order.php?id=2051627
Bega Cheese Ltd (2022). Retrieved 15 July 2022, from https://www.begacheese.com.au/wp-content/uploads/2021/09/106401_Bega-Annual-Report-2021-Bega-Annual-Report_V23_Small.pdf
