Abstract 

Fortescue Metals Group Ltd (FMG) is an iron ore company situated mainly in Australia. It was founded in the year 2003. The company comes under the industry of Metals and Mining. Its headquarters is placed in Perth, Western Australia. Fortescue Metals Group Ltd (FMG) deals in Iron ore, Steel, Gold, Copper and Lithium. It is one of the largest iron ore producers. Mainly fourth largest producer of iron ore in wide world. Elizabeth Gaines works as a (CEO) in the Fortescue Metals Group Ltd and Andrew Forrest being a (Chairman) combines to become the major shareholder in the company. The Fortescue Metals Group Ltd has many subsidiaries work under it. The mine company holds 87000 km2 area. The location where it is situated is Christmas Creek Mine, Pilbara region, West Australia. The company is listed company on the ASX Australia stock exchange with all well known companies. Fortescue Metals Group Ltd (FMG) has grown fastest heavy haul railways, advanced infrastructure and Fortescue company has its own iron ore carriers as well. Fortescue Metals Group Ltd is building a new succes story in the field of mining. Safety, values and empowerment of people are the basic goals, this Australian company holds. 

I. Introduction : 

The company selected is the fourth largest iron ore producer Fortescue Metals Group Ltd (FMG). The main purpose of my assignment is to research thoroughly through the Fortescue Metals Group Ltd. This purpose is carried so that we can learn about the success policies, financial performance and income statements of the above mentioned company. In this assignment, we will examine the main issues, underlying theories, performance measures used and the firm’s financial performance. We will get to know the capital structure, price earning ratios, non current assets and income statement. 

The  analyse of  Fortescue Metals Group Ltd trends in the last three years. The company’s performance analysis and success report. The company’s philosophies and methodologies about future.

The companies financial ratios show many ups and downs from the last two to three years. The annual reports has been taken from the Fortescue Metals Group Ltd (FMG) official website https://www.fmgl.com.au/. The annual reports will show the progressive approach company took and the successful strategies taken. The assignment has been structured strictly as per the norms and guidelines suggested and the assigned tasks. 

This assignment consists the real figures as per the Fortescue Metals Group Ltd website. The referred materials are latest and updated in the year 2019. The assignment consists of many useful information about the success, ups and downs, weaknesses and strengths. Here we will find out the details about the position and liquidity of Fortescue Metals Group Ltd. The share prices are checked on www.asx.com.au.

Financial analysis of fortescue metals group ltd. :

II. Financial Analysis of Selected Company  

2.1 The Fortescue Metals Group Ltd company deals in mine industry mainly iron ore –

The Fortescue Metals Group Ltd company deals in Steel, Gold, Copper and Lithium but mainly iron ore. It offers the iron ore to world wide. The importance of the mining in maintaining the comparative advantages of the company can be listed below –

• Trained workers
• Flexible arrangements of work
• Staff incentives plan
• 16 – weeks paid parental leave etc
• Huge Mining sites
• Full check on the safety measures for any miss happenings occur at the time of work.
• Highly automated plants and machinery

All the other personal as well as professional benefits the Fortescue Metals Group Ltd provide to their staff and workers (Babalola & Abiola, 2013). 

2.2 Calculation and analysis of performance of Fortescue Metals Group Ltd by liquidity ratios –

According to the data collected from THE WALL STREET JOURNAL, the financial data obtained from current financial statements of Fortescue Metals Group Ltd for the past 3 years we will calculate the liquidity ratios know about the capital structure (Fortescue metals group ltd., 2019).

Assets

Commnets

• the current ratio has increased . This means the Fortescue Metals Group Ltd company is able to meet the short term liabilities successfully over the time. There is an increasing trend in the ratios.
• According to the above calculation, it is clear that with the increase in quick ratio Fortescue company can easily pay back its current liabilities. In 2018 the quick ratio was less than 1, this means company was not able to pay back the current liability.
• There is a certain growth in the cash ratio from the year 2017 to year 2019. But these ratios are less than 1. A ratio above 1 means that, the company can easily pay off its current liabilities with the cash and cash equivalent. Here the company have cash ratio less than 1 in all the years.
• According to the above scenario, the Debt Equity Ratio is changing but very minutely. The low Debt Equity Ratio indicates less of borrowed funds and more of owner funds in the company. So here it is a good sign. There is a decreasing trend in the Debt Equity Ratio in passing years (Blum & Dacorogna, 2014).
• As we can see there is a slight decline in the Debt to Total Asset Ratio in all the three years. This can be interpreted as the percentage of assets is funded through borrowing funds as compared with the percentage of principal resources that are funded by investors.
• As we can see from the above proprietary ratios in percentage. here. When proprietary ratios is high that means the company is financially strong. Here it seems the company is dependent on debts in 2017 and 2019. The trend is not regular (Fortescue metals group ltd., 2019).
• Above are the position of liquidity, solvency and trends analysis according to the important accounting ratios of Fortescue Metals Group Ltd.

2.3 Non-current Asset Analysis –

Non Current Assets are Fixed Assets such as Property, Plant, Equipment, Land & Building, Long-term Investment in Bonds and Stocks, Goodwill, Patents, Trademark etc.

Here, in the year 2019 the amount of non-current assets has increased as compared to the last two years that is 2018 and 2017. This increase means the Fortescue Metals Group Ltd company can turn their assets in to cash within 1 year as per the date mentioned in companies balance sheet (Fortescue metals group ltd., 2019).

2.4 The scenario analysis as per the information given –

Interpretation on the sensitivity

Selling price : 9055951 = .19

  450000*35*3.037

Variable Price = 9055951 = .44

  450000*15*3.037

Fixed Cost = 9055951 = 6.63

  450000*3.037

2.5 The latest share or bond issuance by the fortescue metals group ltd 

The Fortescue Metals Group has issued coupon bonds recently. FMG Resources AUG 2006 is the issuer. The company has issued bonds in the form of Registered documentary bonds. It was an open subscription. It is an international bonds (Dorina, et. al., 2012).

The Company has been listing in Australia stock exchange as Fortescue FMG.

2.6 Calculation of the pe ratios and share price movement of the fortescue metals group ltd –

Price earning ratio has been declined to 46% last year in 2018. Up to the year 2019, the price earning ratio has gone up to 40%. The Operating income of the company is A$2.477 Billion in the year 2018 and the Net income results in A$1.134 billion in the year 2018 (Fortescue metals group ltd., 2019).

The present PE ratio of Fortescue Metals Group ltd is 22.5%. If the pe ratio is high, the company is a growth firm and vice versa (Babalola & Abiola, 2013).

The last recorded price of share of FMG was marked at 8.950. The share price movement is watched out as 0.185 2.11% .

Recommendation Letter – 

As company took a comprehensive examination and analysed the firm’s financial performance from the updated financial statements of the Fortescue Metals Group Ltd. Being an investment analyst, I would recommend the investor to invest in Fortescue Metals Group Ltd. This company is performing well in the year 2019 and can write many success stories in the upcoming years. The share price fluctuations are not high or low. The investors can gain good returns from Fortescue Metals Group Ltd in near future.

Conclusion 

The assignment is done with the fortescue metals group ltd .The company profit statement has been studied to find out the ratios of the company. This is finding that the company had making profits or not. The research will be useful to the shareholders to find whether to invest in the company or not. Thaw Company had made a successful issue of shares whose report had been summarised above. The ratios are done to better understanding of the report. All the current ration and the liquidity ratio are check to find the company had made profits in current year or not. The written down method of depreciation had been followed by the company. The life of the assets and the scarp value is as per the market value and as per the recommendation of law. The calculation of NPV is done to find pout whiter the project should be adopted or not. The company had made all the conclusion of worst and nest case and the sensitivity is done to find out which variable are more sensitive than others. 

References

Babalola, Y. A., & Abiola, F. R. (2013). Financial ratio analysis of firms: A tool for decision making. International journal of management sciences, 1(4), 132-137.

Blum, P., & Dacorogna, M. (2014). DFA‐Dynamic Financial Analysis. Wiley StatsRef: Statistics Reference Online.

Christensen, T., Cottrell, D., & Baker, R. (2013). Advanced financial accounting. McGraw-Hill.

Dorina, P., Victoria, B., & Diana, B. (2012). Aspects of company performance analysis based on relevant financial information and nonfinancial information. The Annals of the University of Oradea, 956.

Fortescue metals group ltd. (2019). About us. [Online] Fortescue metals group ltd. Available at https://www.fmgl.com.au/docs/default-source/annual-reporting-suite/fy19-annual-report.pdf. [Accessed on 10.09.2019]

Fortescue metals group ltd. (2019). About us. [Online] Fortescue metals group ltd. Available at https://www.fmgl.com.au/docs/default-source/default-document-library/fy2017-annual-report.pdf [Accessed on 10.09.2019]

Fortescue metals group ltd. (2019). About us. [Online] Fortescue metals group ltd. Available at https://www.fmgl.com.au/investors/asx-announcements# [Accessed on 10.09.2019]

Introduction

This report helps to understand the concept of Capital gain and capital allowance. Capital gain can be defined as the increase in the value of estate or capital assets that provide the high rate as compare to the price of purchase. Capital allowance is the value that can be spend on the assets of business and claimed against the taxable gain. It also analyse the concept of Capital gain tax (CGT) and their consequences on the sales. Apart from this it also calculates different costs of the assets. 

Question 1

 Advise jasmine of the CGT consequences of the above sales. Include relevant legislative references to support the answer.

• According to the Australian tax laws,   the main residence (home) is exempted from the capital gain tax. To get this exemption, it can be stated that the individual should resides in that particular   property. As per the law, the empty property is not allowed for the exemption. It can be noted that if the person is living in the property but they are not the resident of Australia then in that situation they are not included under the main residence. There are certain  situation in which dwellings can be considered as the main residence such as:

• The Personal belongings of the person are in it.
• The person and his family live in it. 
• The address on which mail can be delivered. 
• The address on the electoral roll. 
• The services such as power and gas associated to house.

According to the Australian tax, the assets acquired before 20th September, 1985 in Australia is not included in the capital tax. So, it can be concluded that the jasmine’s home is purchased before the 1985 and it comes under the main residence. By observing both rules, it can be analysed that the main residence of jasmine’s does not comes under the ambit of capital gain tax and she is not bound to pay the tax on sale of his home (Kenny, 2012). 

• According to the Australian tax law, motor vehicle and cars are exempted from the capital gain tax. As per the law, car can be exempted when it carry the passengers which are less in number that can be less than nine. This type of exemption can be applied to the private owner of the vehicle. It can be asserted that motor cars are exempted from the capital gain tax (ATO, 2019). There are certain cars which are not covered under the exemption , such as :

• Racing cars
• Taxi cabs
• Scooter or motorcycle
• Single seat sports car
• Van and other commercial vehicle 

Therefore, it can be stated that jasmine sell the car and that can be exempted from the capital gain tax. In addition to this, the car of jasmine carries the less number of passengers and can be used for private purpose. Therefore, jasmine is not bound to pay the tax for the sale of car and she will neither gain nor loss anything. 

• By observing the scenario, it can be asserted that jasmine is selling the small cleaning business that consist the business equipments and goodwill. According to the Australian taxation law, the sale of business includes the tangible and intangible assets. Tangible assets can be in form of inventory and machine. In tangible can be in form of trade name and goodwill. The capital loss and capital gain can be recorded in the income tax return and on that tax can be paid by person. Bu analysing this situation, it can be noted that the cost of acquisition is higher than the cost of sales as jasmine sold the equipments at less price. Therefore, it can be said that the jasmine suffers the capital loss (Kenny, 2012). 

• It can be asserted that exemption comprises of the personal items that have been acquired for less than $10,000. Personal use items are those items that cannot be used for the business purpose; they can be used for the enjoyment or for personal use. According to the Australian tax laws, the assets which are below the value of $10,000 are not included under the ambit of CGT. It includes the assets such as furniture, boats, electrical goods and different items of household. If the value of assets can be sold for  less than $10,000 then the person can be get exempted and the assets can be disposed. Therefore, it can be stated that the furniture sold by the jasmine does not included under the CGT (James, 2012).

• According to the Australian tax laws, the collectables consists those items that can be used for the personal purpose or for the enjoyment. It includes the antiques, jewellery, rare folios, coins and medallions etc. According to the rules of taxation, the collectable items have the value less the $5000 and that can be exempted under the capital gain tax. By analysing the scenario, it can be noted that jasmine acquired the painting worth $500; therefore no tax can be paid on the sale of paintings. But if she purchase a painting directly from the artist for the value of $1000 which mean that value of painting does not comes under the exemption as the value of painting is more than $500. Therefore there will be a capital gain on the sale of painting as jasmine purchased directly from the artist (Konvisarova, et. al., 2015). 

Question 2

Issue

In the given scenario, there are certain expenses that can be incurred towards the purchase of machine and that expenditures are related to the acquisition of CNC machine. It can be stated that the john visit the Germany and the main purpose of john to visit the Germany is to inspect the machineries. For this, he spends certain costs such as visiting cost that is $12000, installation cost etc. It also consists the cost of guiding rod and that will not be-treated as the part of assets (ATO, 2019). It also asserted the amount of depreciation and that becomes the liability on the person. The value of depreciation can be levied from the date of use of machinery or from other means (Ang, 2014). 

Law and Application

According to the provisions of ATO, only those expenses form the part of cost which is necessary for the functioning of the product. In other words, all those expenditures which are relevant to form the assets and help them in their working As per the facts of the case, the value of CNC is $300000 and that will be recognised as the first cost. This value includes the cost which can be incurred or paid after 30 June 2005 and related to the assets. The other cost is installation cost that incurs the value of $25000 and that also comes under the ambit of assets. This type of assets starts depreciating when the firms begin to hold the value of asset. 

In the case of MUNNERY v FC of T, Administrative Appeals Tribunal of Australia, 23 March 2012, the concept of cost is elaborated. In this the firm purchased the assets that are machine and they did not include the amount of installation. They also spend the amount for the purchase of assets and that can be recognised as the capital allowance. This type of allowance is helpful for paying the amount of tax and to track the rate of depreciation. These are non- recurring and long term in nature. 

In addition to this, the second type of cost does not covered under the purview of first cost. It is that amount which can be paid after the installing and purchasing the assets of firm. These type of cost helps to maintain the standard and quality of assets and termed as the second type of cost. It also cost the different cost such as cost of destroying, maintenance and repairs, commission, advertisement and brokerage etc (Evans et. al., 2015). 

According to the given scenario, the cost of guiding rod i$5000 includes in the expenses as it makes the programming faster and that leads to the effective system. It also includes the cost of travelling as it directly related to the value of assets. There are certain expenses which do not comes under the ambit of cost that is amount of tax. The expenses which are capital in nature and the deductible amount are not the part of cost. 

Further, it can be stated that the machinery is imported in the month of November from Germany and installed in the month of January. So here the question arises regarding the date of starting and for the declining the asset value. 

It can be analysed that the time limit for holding the machine for the valuation of depreciation can be treated as the assets and that can be used for the purpose of installation. Company also allowed the deduction in case of taxable amount and they also allowed the deduction when the amount is taxable and not amount to depreciate the company assets (James, 2012). 

There are different types of expenditures that can be acquired by john for the installation of machinery. It is necessary to classify the expenses so that total amount of cast of capital assets can be reached. The main reason behind these classifications is the deductions that can be claimed against the expenditures which are necessary to create the product in running conditions.  

Further to this, the company use the declining value as expenditure and that can be deducted from the value. If the person uses the assets for their own purpose then in that situation the tax is deductible. But on the other side if the asset can be used for the business purpose then in that case it is not deductible (Evans et. al., 2015). The company use the assets for different purposes; they can use for their own purpose and second for the office use. In this situation the tax can be levied when the assets can be used for the purpose of business. 

In addition to this, the amount of machinery will be $33700 and on that value depreciation can be calculated, but if there is any generation in the value then in that situation depreciation can be charged on that additional amount. As per the rules, deductions can be allowed for the purpose of depreciation. 

Conclusion

From the above description, it can be analysed that capital gain and capital allowance plays a vital role in the company. Capital gain can be for short and long term and that can be claimed on the income taxes. The assets determine the partial and full value and that can be claimed in the year. It also determines the amount of depreciation and that can be based on the value of assets. Apart from this, it can be stated that the cost can be fragmented in to two portions; the first portion is the direct cost that consist of labour cost and direct expenditure. The indirect cost includes the indirect expenses. The depreciation can be calculated according to the different methods that are through the diminishing or the prime cost. They have different method and that helps the organisation to specify the actual amount of assets. 

References

• • Ang, A., 2014. Asset management: A systematic approach to factor investing. Oxford University Press
  • ATO. 2019. Capital gains tax. [online] Available at: https://www.ato.gov.au/General/Capital-gains-tax/ [Accessed on: 12th September  2019].
  • Evans, C., Minas, J. and Lim, Y., 2015. Taxing personal capital gains in Australia: An alternative way forward. Austl. Tax F., 30, p.735.
  • James, S., 2012. Australian Tax Research Foundation. In A Dictionary of Taxation, Second Edition. Edward Elgar Publishing Limited.
  • Kenny, P., 2012. Post Implementation Reviews of Recent Australian Tax Reform. J. Australasian Tax Tchrs. Ass’n, 7, p.79.

• Konvisarova, E., Samsonova, I. and Vorozhbit, O., 2015. The nature and problems of tax administration in the Russian federation. Mediterranean Journal of Social Sciences, 6(5 S3), p.78.

Introduction

In this report evaluation of two websites given will be done which are 1. www.decibullz.com, 2. www.bcf.com.au.

According to the principles of Human Computer Interface (HCI), Objectives of this report is to evaluate the functioning of these websites with principles such as ease of interaction between human and computer (website), whether there is simplicity in structuring of tasks, are functions clearly visible, whether mappings of website are correct, whether it is aesthetically pleasing when browsing the website’s, whether errors are meaningful, whether there is enough documentation, is it flexible to use for extended amount of time etc. finding of all good and bad aspects of websites, what all can be improved and added, comparisons of both websites regarding their usability according to HCI design and evaluation principles.

Discussion

Overview

DECIBULLZ: It is a website for hearing related products like headphones, hearing protection with multiple hyper suggesting products from shooting sound protection to manufacturing sound protection applications.

BOATING CAMPING FISHING (BCF): Abbreviated BCF it is a website for boating, camping and fishing needs for all the people looking for adventure from kayaks, boats, sleeping bags to fishing rods to even providing caravans and clothing providing all outing needs.

Impressions

DECIBULLZ: Homepage of DECIBULLZ is a very clean and direct to the point with leaving very for the imagination, with clear and full-size images covering nearly all the websites real estate describing its products, its design is rather pleasing to the eye making it easier to navigate. It has main tabs/hyperlinks which are hearing protection, headphones, explore and support where hearing protection has a clear dropdown menu which contains links to earplugs, percussive filer and other, coming to 2nd dropdown of headphones which contains wireless Bluetooth earphones to its accessories, 3rd dropdown menu being explore contains prescribed categories of fitness, shooting sports, manufacturing, music which is really nice touch bringing users directly to their needs and categorizing main products, when it comes to the 4th menu it is really a simplistic menu where instruction, support portal, my account and contact us reside, apart from dropdown menus there are plenty enough functionalities given in the header like search, gift cards, my account and shopping cart, body of this website includes clear and large images of its products with description of what products features are, complying with the HCI principles, at the end of the website’s body there is a box with an insert for email address to subscribe for newsletter, bottom of that are links to all the social media handles of the company like Instagram, Facebook etc. with its store locator, after that there is the footer of this website which includes all the useful links from its product to customer service and company (details), this website remains well thought out and easy to access with it making the buying of product from looking to checkout rather easy, navigation of this is also very intuitive, one doesn’t have to think much in order to navigate this website.

BOATING CAMPING FISHING (BCF): Homepage of BCF is rather cluttered because of its wholesome offerings it can prove to be hard to navigate where to find the product of need it can take time, it even has so many offerings that it can become confusing for the user on deciding what to checkout with, header of this website includes seven dropdown menus which can little too much with its header also containing other links like sale and gift ideas, with dropdown menus like boating, camping, fishing and others it provides a great variety of products, one going to a trip for any of these adventures probably won’t miss any of the products needed from this website with boating menu providing all the boating needs, camping providing all the camping needs till brands menu where products are categorized by its brand names, with links like sale, gift ideas and be a BCFing expert it also provides opportunities to work for BCF, with all these links and menus there is not much left to discover but it also is a problem because one can consume much time trying to find his/her product needs but can be solved with search option given on the header, coming to the body of this website it contains clear images but with product direct product showcasing it can be further cluttering where one can keep looking at products and not find suitable product, going to the footer it seems like a clear design directly referring to links, it is a website providing plentiful but with a major drawback of cluttering UI trying to do too much.

Comparison:

Predictability: both being e-commerce websites predictability is the topmost requirement, both of these websites prove to be predictable with DECIBULLZ being the more predictable one with its clear and direct to point dropdown menus leaving very less to figuring out, with BCF being a multi category product line e-commerce website it still remains relatively predictable but with its exceeding product line it can become hard to predict after a certain point.

Familiarity: both of the websites remain familiar with similar design contacts with any e-commerce website, BCF and DECIBULLZ both have familiar interface where header has dropdown menus relating to its products, on the left side being the logos of both websites on the right being functional links/buttons towards search, my account and shopping cart, with there bodies including images of their products with its features, with its footer including all the necessary links.

Consistency: either of these websites offer consistency with DECIBULLZ offering a lot more consistence with its limited but true to its goal product line while in BCF a person can go from one product line to another without desiring to do so.

Generalization: both websites are generalized with the format of an e-commerce website being predictable and easy to interact with for first time users.

 Dialogue initiative: both of these websites contain dialogue initiation where at any moment of these websites one can suspend tasks even in checkout.

Sustainability: both of these websites follow a sustainable approach where one doesn’t have search the product previously ordered again, BCF has a tendency for confusing product names limiting its sustainability.

Customisability: these websites offer limited customisation as a central nature of e-commerce website it needs to be predictable and direct.

Observability: both of the websites have very observation friendly interface where one can know where the person is and where he/she can go, where one can go directly to the links, but with BCF bringing its drawbacks of confusions making it difficult overall.

Recoverability: both websites offer enough recoverability from its errors, with DECIBULLZ providing a clear and visible 404 error with search box, BCF making it confusing with YOU’VE GONE OFFTHE BEATEN TRACK line not clearly showing if there is a error but proving enough links and a search dialog.

Responsiveness: both of these websites are responsive with DECIBULLZ being a little less responsive to load its heavy images, surprisingly BCF is more responsive than DECIBULLZ even with its larger offerings, with both being compatible for smaller resolutions like smartphones.

Recommendation

DECIBULLZ: DECIBULLZ is a very well thought out website leaving very little to point out, with its use of full resolution images it comes large in size to loadit might become more responsible when limiting image use also after providing social media links with images it again provides links to its social media in footer which is a sign of redundant design. This website leaves very little for improvement other than nit-picking.

BCF: BCF is a responsive website with a lot to offer rather too much to offer, this website must focus on usability of this website with main focus on user interface rather than product line extension, try to make it less confusing for people to checkout product’s needs.

Conclusion

Websitesin general must follow human computer interaction principles but more so in e-commerce websites both of these websites try their best to focus on usability with DECIBULLZ leaving a little to complain but BCF having a need for improvement both websites must focus on improving responsive with BCF must try to be direct to point when navigating like error page, BCF must shift its concentration from product line to actual functionality of website.

References

• Decibullz, 2019. About us. [Online] Decibullz. Available at: https://www.decibullz.com/.[Accessed: 10 September 2019].
• BCF, 2019. Boating, Camping and Fishing. [Online] BCF. Available at: https://www.bcf.com.au/. [Accessed: 10 September 2019].