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HI5002

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

S.No, Particulars2016—17 2017-18 2018-19 
1Current       
  Current Assets $    222,331.00 2.172304295 $    470,047.00 2.9306685626260063.047904221
  Current Liabilities $    102,348.00  $    160,389.00 205389 
2Quick       
  Cash + Accts. Rec. $    193,894.00 1.894458123 $    405,946.00 2.5310089845175532.519867179
  Current Liabilities $    102,348.00  $    160,389.00 205389 
3Debt-to-Worth       
  Total Liabilities $    102,448.00 0.424246942 $    166,869.00 0.3002812622056160.260982365
  Net Worth $    241,482.00  $    555,709.00 787854 
         
INCOME STATEMENT RATIOS: Profitability (Earning Power)        
4Gross Margin       
  Gross Profit $    151,006.00 0.274932772 $    464,349.00 0.5034390277137520.53251722
  Sales $    549,247.00  $    922,354.00 1340336 
5Net Margin       
  Net Profit Before Tax $      52,299.00 0.095219455 $    415,711.00 0.4507065622832320.211314178
  Sales $    549,247.00  $    922,354.00 1340336 
         
ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios        
6Sales-to-Assets       
  Sales $    549,247.00 1.596973221 $    922,354.00 1.27647672613403361.349145923
  Total Assets $    343,930.00  $    722,578.00 993470 
7Return on Assets       
  Net Profit Before Tax $      52,299.00 0.15206292 $    415,711.00 0.5753164362832320.285093662
  Total Assets $    343,930.00  $    722,578.00 993470 
8Return on Investment       
  Net Profit Before Tax $      52,299.00 0.15206292 $    415,711.00 0.5753164362832320.285093662
  Net Worth $    343,930.00  $    722,578.00 993470 
         
ASSET MANAGEMENT RATIOS: Working Capital Cycle Ratios        
9Inventory Turnover       
  Cost of Goods Sold $ (285,729.00)-10.04778985 $ (458,005.00)-7.145052339-590584-5.4455294
  Inventory $      28,437.00  $      64,101.00 108453 
10Inventory Turn-Days       
  360                     360 0.012659563                     360 0.0056161373600.00331941
  Inventory Turnover $      28,437.00  $      64,101.00 108453 
11Accounts Receivable Turnover       
  Sales $    549,247.00 7.536940473 $    922,354.00 14.08367562134033625.41017669
  Accounts Receivable $      72,874.00  $      65,491.00 52748 

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.

Carrying Amount beg. of the year2016-172017-182018-19
Plant and equipment114561115610995
Land and buildings849796744
Exploration and evaluation772813857
Assets under development227291301
Development356334373292
Depreciation
Plant and equipment452154786464
Land and buildings257316412
Exploration and evaluation000
Assets under development000
Development105212591448
Carrying Amount end of the year
Plant and equipment111561099510690
Land and buildings796744650
Exploration and evaluation813857539
Assets under development291301889
Development343732923303

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 –

Averag Price$25 
Units to be sold450000
Life4 years
Equipmnet Cost$2,500,000 
Residual Value$500,000 
Working Cpaital$800,000 
Variable Cost$15  
NPVCurrent Case
Years01234
Equipmet Cost2500000    
Sales 11250000112500001125000011250000
Working Capital $800,000 800000800000800000
Variable Cost 6750000675000067500006750000
Residaul Value    $500,000 
Cash Fixed Cost 450000450000450000$450,000 
Profit Before Tax $3,250,000 $3,250,000 $3,250,000 $3,250,000 
Tax 975000975000975000975000
Profit after Tax $2,275,000 $2,275,000 $2,275,000 $2,275,000 
Discounted Values10.892857140.797190.711780.63552
Discounted Cash Flow2500000$2,031,250 $1,813,616 $1,619,300 $1,445,804 
Outflow2500000
Inflow6909969.76
Net Present Value4409969.76
Averag Price$20 
Units to be sold360000
Life4 years
Equipmnet Cost$2,500,000 
Residual Value$500,000 
Working Cpaital$800,000 
Variable Cost$18  
NPVWorst Case
Years01234
Equipmet Cost2500000    
Sales 7200000720000072000007200000
Working Capital $800,000 800000800000800000
Variable Cost 6480000648000064800006480000
Residaul Value    $500,000 
Cash Fixed Cost 550000550000550000$550,000 
Profit Before Tax ($630,000)($630,000)($630,000)($630,000)
Tax -189000-189000-189000-189000
Profit after Tax ($441,000)($441,000)($441,000)($441,000)
Discounted Values10.8928571430.797190.711780.63552
Discounted Cash Flow2500000($393,750)($351,563)($313,895)($280,263)
Outflow2500000
Inflow-1339471.06
Net Present Value-3839471.06
NPVBest Case
Years01234
Equipmet Cost2500000    
Sales 16200000162000001620000016200000
Working Capital $800,000 800000800000800000
Variable Cost 6480000648000064800006480000
Residaul Value    $500,000 
Cash Fixed Cost 350000350000350000$350,000 
Profit Before Tax $8,570,000 $8,570,000 $8,570,000 $8,570,000 
Tax 2571000257100025710002571000
Profit after Tax $5,999,000 $5,999,000 $5,999,000 $5,999,000 
Discounted Values10.8928571430.797190.711780.63552
Discounted Cash Flow2500000$5,356,250 $4,782,366 $4,269,970 $3,812,473 
Outflow2500000
Inflow18221058.73
Net Present Value15721058.73

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).

Price Earning Ratios = Market price / Earning per share
                         201920182017
Net income             44561,1342,775
Earning pae share       1.440.360.89

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 sciences1(4), 132-137.

Blum, P., & Dacorogna, M. (2014). DFADynamic 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]

Abstract

Jb Hi Fi Company is founded by John Barbuto. It is a type of retail industry founded 45 years ago in 1974 at Keilor East, Victoria, Australia. This company mainly deals in the products related to customer electronics, major appliances such as domestic appliance for cooking and washing laundry, for food preservation etc and example of small appliances can be said as microwave oven, coffee makers etc. JB Hi Fi is the largest company of home appliances in Australia. It deals in Computers, tablets, mobile phones, TVs and gaming multimedia. The Good Guys is the subsidiary of this company. JB HI FI is located nearly at 303 places including Australia and New Zealand. The headquarters of JB Hi Fi Company is in Tower Two of Vicinity Centre’s Chadstone Shopping Centre, Melbourne, Australia. Gregory Richards being a Chairman of the company and Richard Murray as the CEO forms the two key people of Jb Hi Fi. This company is publically traded in the Australian stock exchange named ASX: JBH. The company ranks 50 out of top 2000 companies running in Australia. All the other relevant information about the company can be referred through the official website of Jb Hi Fi Company https://www.jbhifi.com.au/.

I Introduction

Here we are going to know all about the success policies of JB HI FI. Its financial performance and income statements of the company. Jb Hi Fi is an Australian company, aw we know, one of the largest entertainment retailer of home products. The company deals with major appliances as well as small appliances in a variety of home appliances. Mobile phones, laptops, televisions, gaming microwave ovens, toaster JB Hi Fi are all examples of the company’s flagship and small appliances.

In this assignment, we will go over all the important and salient issues faced by the company in general, their adopted principles, the overall performance measures used, and the performance of the firm’s financial position of JB HI FI Company.  We will also analyse the structure of capital, their price to income ratio, non-assets of the company JB hi fi. These performances will set the standards for future targets for the company, will they be able to meet their goals and achieve success in the near future?

We will analyse the changing trends about the Jb Hi Fi Australian Company for the last three year financial ratios of the company. An in-depth study of the company’s performance analysis and success report will be seen. The company’s philosophy and system of work will predict the future. Jb Hi Fi as stated above in this assignment is the real and comparable figures according to the official website of the Australian company. We can get all the necessary information about the company from the company annual report. The referenced material has been updated in the year 2019.

Here we are also going to know the details about the liquidity position of Jb Hi Fi Australian Company. The prices of the shares are updated and regularly assured from the official website of JB HI FI COMPANY https://www.jbhifi.com.au.

II Financial Analysis of selected company

2.1 The key product for Jb Hi Fi Company is electronic household entertainment appliances –

JB Hi Fi Company in Australia deals in household or domestic products, major appliances as well as small appliances. Major appliances such as TVs, laptops are bigger in size and higher in value as compared to small appliances such as coffees machine and microwave oven (Tandon & Malhotra, 2013). The importance of the petroleum products in maintaining the comparative advantages of the company are listed below –

  • Safety – The Company properly maintained the safety measures in all the products. Provides healthy and safe working environment for all the employees working in the company. Fair behaviour and strict rules and regulations prevent accidents and ensure safety in the company.
  • Diversity – Jb Hi Fi Company has much line of products. They have diverse skills, background, and experience about policies. They are creative and innovative for products. They try to plan and make strategies for creating as well as promotion of the new product.
  • Social programs – Company contributes in Helping Hand weekly. Helping hand is the Registered Charitable Trust. This trust has been introduced so that employees donate a limited liability to charity.
  • Employee groups – Employee groups are formed for timely awareness and programs relating to the benefits of workplace leadership across Australian businesses.
    • Complete Disclosure – The director’s focus mainly on the forming up of different strategies and success paths. They want the customers to have the complete disclosure of all the relevant information about the company. Bank, investors, government or the interested parties.
  • Risk Identification and Management – The Company conducts the necessary operations for the company to identify the risk and manage between risk and reward.
  • E- Waste – All the E- Waste from different stores and operations for the support purposes are recycled. No wastage takes place by the store initiatives. They ensure the impact of wastage on the environment gets reduced with time.

Variable rewards incentives – the reward incentive under the VRP in the case of dishonesty and fraud, the board’s discretion will happen by the clawback. Misstatement of material, breach of material and in some circumstances the board shows negligence (Talari, et. al., 2017). Subject to this, a Group executive will not be eligible to receive VRPaward in respect of performance period.

Note – If, during that period, the executive cease to employed, or has given notice of his or her resignation from employment or has been given notice of termination from employment.

2.2 Identify and conduct a trend analysis with two groups of financial ratios, including liquidity and capital structure of the selected company.

BALANCE SHEET RATIOS
S. No,Particulars2016-172017-182018-19 
1Current 
Current Assets$              1,170.701.321630165$              1,210.501.319777584$              1,276.501.376874124
Current Liabilities$                  885.80$                  917.20$                  927.10
2Quick
Cash + Accts. Rec.$                  269.400.304131858$                  276.700.301679023$                  355.200.383130191
Current Liabilities$                  885.80$                  917.20$                  927.10
3Debt-to-Worth
Total Liabilities$              1,598.800.651959385$                  947.600.5$              1,044.100.5
0Net Worth$              2,452.30$              1,895.20$              2,088.20
INCOME STATEMENT RATIOS: Profitability (Earning Power)
4Gross Margin
Gross Profit$              1,230.500.218638948$              1,470.100.214478503$              1,527.100.215226981
Sales$              5,628.00$              6,854.30$              7,095.30
5Net Margin
Net Profit Before Tax$                  172.400.030632552$                  233.200.034022438$                  249.800.035206404
Sales$              5,628.00$              6,854.30$              7,095.30
ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios
6Sales-to-Assets
Sales$              5,628.002.294988378$              6,854.302.723743294$              7,095.302.836871776
Total Assets$              2,452.30$              2,516.50$              2,501.10
7Return on Assets
Net Profit Before Tax$                  259.200.105696693$                  334.500.13292271$                  358.900.143496861
Total Assets$              2,452.30$              2,516.50$              2,501.10
8Return on Investment
Net Profit Before Tax$                  259.200.105696693$                  334.500.176498523$                  358.900.17187051
Net Worth$              2,452.30$              1,895.20$              2,088.20
ASSET MANAGEMENT RATIOS: Working Capital Cycle Ratios
9Inventory Turnover
Cost of Goods Sold$            (4,397.50)-5.11396674$            (5,384.10)-6.042082819$            (5,568.20)-6.27968873
Inventory$                  859.90$                  891.10$                  886.70
10Inventory Turn-Days
360                          3600.418653332                          3600.403995062                          3600.405999774
Inventory Turnover$                  859.90$                  891.10$                  886.70
11Accounts Receivable Turnover
Sales$              5,628.0028.6266531$              6,854.3033.48461163$              7,095.3030.06483051
Accounts Receivable$                  196.60$                  204.70$                  236.00

Trends: 

  • Current Ratio is the important ratio of the company. It will show that how company will pay the current liabilities. It is comparatively similar in every year.
  • The ratio of liquidity will clear out that the company is viable to pay the liquid liabilities. It should be less than 1. The company is having good liquid ratios, and it is maintained in all the 3 years.
  • The ratio of net worth will clear out that at either company assets are justifying with the company equity or not. It should not be overvalued or undervalued. The company is also having similar net worth ratio in all the years.
  • The net margin will show the profitability of the company. It will shoe either company is profit making or not (JB HI Fi Group, 2019).
  • The return on assets will show that how much of the assets had been utilised. How much profit they are giving.
  • All the contribution in equity is from the shareholders, and it also comprises of the retained earnings and reserves.

2.3 Perform a non-current asset analysis

Carrying Amount end of the year2016-172017-182018-19
Plant & Equipment148.2148.2132.3
Leasehold Improvements606059.2
Depreciation2016-172017-182018-19
Plant & Equipment138.5162.4196.3
Leasehold Improvements97.3113.9130.2
Carrying Amount beg. of the year2016-172017-182018-19
Plant & Equipment114.8148.2148.2
Leasehold Improvements61.46060

The fixed assets are consisting of the plant & equipment.
The life of the estimates is as follows:
Leasehold Property: 1 to 15 years
Plant and Equipment: 1.5 to 15 years
The impairment will be done as per the change in circumstances.

2.4 Perform a scenario analysis with data provided

Average selling price$                  25.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales11250000112500001125000011250000
Variable cost6750000675000067500006750000
Contribution4500000450000045000004500000
Fixed cost450000450000450000450000
Depreciation500000500000500000500000
Operating Profit3550000355000035500003550000
Tax1065000106500010650001065000
PAT2485000248500024850002485000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows2985000298500029850004285000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows2665178.571237962421246642723195
Outflow$    3,300,000.00
Inflow9892661.302
NRV$    6,592,661.30
Average selling price$                  20.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales9000000900000090000009000000
Variable cost6750000675000067500006750000
Contribution2250000225000022500002250000
Fixed cost450000450000450000450000
Depreciation500000500000500000500000
Operating Profit1300000130000013000001300000
Tax390000390000390000390000
PAT910000910000910000910000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows1410000141000014100002710000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows1258928.5711124043.3671003610.1491722254
Outflow$    3,300,000.00
Inflow5108836.081
NRV$    1,808,836.08
Average selling price$                  25.00
Expected sale360000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales9000000900000090000009000000
Variable cost5400000540000054000005400000
Contribution3600000360000036000003600000
Fixed cost360000360000360000360000
Depreciation500000500000500000500000
Operating Profit2740000274000027400002740000
Tax822000822000822000822000
PAT1918000191800019180001918000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows2418000241800024180003718000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows2158928.5711927614.7961721084.6392362856
Outflow$    3,300,000.00
Inflow8170484.222
NRV$    4,870,484.22
Average selling price$                  25.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  29.80
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales11250000112500001125000011250000
Variable cost13410000134100001341000013410000
Contribution-2160000-2160000-2160000-2160000
Fixed cost450000450000450000450000
Depreciation500000500000500000500000
Operating Profit-3110000-3110000-3110000-3110000
Tax-933000-933000-933000-933000
PAT-2177000-2177000-2177000-2177000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows-1677000-1677000-1677000-377000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows-1497321.429-1336894.133-1193655.476-239590
Outflow$    3,300,000.00
Inflow-4267461.352
NRV$ (7,567,461.35)
Worst Case
Average selling price$                  25.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       550,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales11250000112500001125000011250000
Variable cost6750000675000067500006750000
Contribution4500000450000045000004500000
Fixed cost$       550,000.00$      550,000.00550000550000
Depreciation500000500000500000500000
Operating Profit3450000345000034500003450000
Tax1035000103500010350001035000
PAT2415000241500024150002415000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows2915000291500029150004215000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows2602678.5712323820.1532074839.4222678709
Sensitivity Analysis
Outflow$    3,300,000.00
Inflow9680046.847
NRV$    6,380,046.85
Unit DriversExpected NRVRevised NRVChange in %
Unit Sales (-20%)$  6,592,661.30$    1,808,836.0873%
Per Unit (-20%)$  6,592,661.30$    4,870,484.2226%
Variable Cost (+20%)$  6,592,661.30$ (7,567,461.35)215%
Cash Fixed Cost (+100000)$  6,592,661.30$    6,380,046.853%

Good Case

Average selling price$                  30.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales13500000135000001350000013500000
Variable cost6750000675000067500006750000
Contribution6750000675000067500006750000
Fixed cost450000450000450000450000
Depreciation500000500000500000500000
Operating Profit5800000580000058000005800000
Tax1740000174000017400001740000
PAT4060000406000040600004060000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows4560000456000045600005860000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows4071428.5713635204.0823245717.933724136
Outflow$    3,300,000.00
Inflow14676486.52
NRV$ 11,376,486.52
Average selling price$                  25.00
Expected sale540000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales13500000135000001350000013500000
Variable cost8100000810000081000008100000
Contribution5400000540000054000005400000
Fixed cost540000540000540000540000
Depreciation500000500000500000500000
Operating Profit4360000436000043600004360000
Tax1308000130800013080001308000
PAT3052000305200030520003052000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows3552000355200035520004852000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows3171428.5712831632.6532528243.443083534
Outflow$    3,300,000.00
Inflow11614838.38
NRV$    8,314,838.38
Average selling price$                  25.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  12.00
Fixed cost$       450,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales11250000112500001125000011250000
Variable cost5400000540000054000005400000
Contribution5850000585000058500005850000
Fixed cost450000450000450000450000
Depreciation500000500000500000500000
Operating Profit4900000490000049000004900000
Tax1470000147000014700001470000
PAT3430000343000034300003430000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows3930000393000039300005230000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows3508928.5713132971.9392797296.3743323760
Outflow$    3,300,000.00
Inflow12762956.43
NRV$    9,462,956.43
Average selling price$                  25.00
Expected sale450000
equipment cost$    2,500,000.00
Residual Value$       500,000.00
Working Capital$       800,000.00
DepreciationSLM
Variable cost$                  15.00
Fixed cost$       550,000.00
Discount rate12%
Tax Rate30%
Year1year2 year3 year4 year
Sales11250000112500001125000011250000
Variable cost6750000675000067500006750000
Contribution4500000450000045000004500000
Fixed cost$       550,000.00$      550,000.00550000550000
Depreciation500000500000500000500000
Operating Profit3450000345000034500003450000
Tax1035000103500010350001035000
PAT2415000241500024150002415000
Depreciation500000500000500000500000
Working Capital800000
Residual Value500000
Free Cash Flows2915000291500029150004215000
Discounted Value0.8928571430.797190.711780.63552
Discounted Inflows2602678.5712323820.1532074839.4222678709
Outflow$    3,300,000.00
Inflow9680046.847
NRV$    6,380,046.85
Sensitivity Analysis
Unit DriversExpected NRVRevised NRVChange in %
Unit Sales (-20%)$  6,592,661.30$  11,376,486.52-73%
Per Unit (-20%)$  6,592,661.30$    8,314,838.38-26%
Variable Cost (+20%)$  6,592,661.30$    9,462,956.43-44%
Cash Fixed Cost (+100000)$  6,592,661.30$    6,380,046.853%

2.5 Identify and discuss any latest share or bond issuance by the selected company

JB Hi Fi Company is officially listed on Australia Stock Exchange on 23/10/2003. The issuer code of the company is JBH. According to the rating companies risks are balanced. The shares applied in 2019 have been raised 50%. The stock price have been listed recently is ₹ 34.860 with the increase of Rs +0.520 and +1.51% has been raised according to the relevant sources referred by the JB HI FI company. The company’s trends changes and fluctuations takes place.

Jb Hi Fi Company has been operated as a listed holding company in Australia. The company consists of most popular and trusted retail brands of home appliances whether major appliances and small appliances, home entertainment appliances etc are operated mainly in Australia (Goldstein, et. al., 2017). These brands are JB HI-FI and The Good Guys. The Good Guys is the subsidiary company of JB HI-FI Company. The capital structure of the company can be analyzed by latest statistics referred from the Wall Street Journal.

  • Total Debt to Total Equity has been checked as 42.06.
  • Total Debt to Total Capital is seen as 29.60.
  • Total Debt to Total Assets ratios has been got 17.23.
  • Interest Coverage received as 31.78
  • Long-Term Debt to Equity Ratio we got is as 42.06.
  • Long-Term Debt to Total Capitalism 29.60.
  • Long-Term Debt to Assets ratio by the company is 0.17.

2.6 Calculate and discuss the PE ratios and share price movement of the selected company through 3 years.

PE Ratio means the price earnings ratio. The company PE ratio will show the actual market position of the company (Becker & Ivashina, 2015).The Highest the PE ratio the highest the company valuation. The company use this as an important analytical tool for the investors. It will be calculates as

P/E Ratio = Earnings per share / Market value per share

The PE ratio of the year 2019 is 16.0. This will show that the company is having good financial position and will have good image in the market.

The following graph will show you the movement of the PE ratio in the last years

(Figure: PE ratio)

(Figure: PE ratio)

(Source: Stockpedia, 2019)

III Recommendation letter

It is recommended that the Jb Hi Fi Australian Company to all the investors as it follows all the basic and ethical behaviour and code of conduct necessary to follow by everyone. The directors, staff and employees expect all the guidelines are followed. As we have look upon the comprehensive examination and analysed the firm’s financial performance from the updated financial statements of JB Hi Fi Australia.

This time company is growing with the increasing trend. The only competitor in front of JBH is KGN that’s Kogan limited. This time the sales have been hiked 3.5% to 7.1% billion in 2019. In order to have safe and easy returns investors can invest in the company.

Being an investment analyst, it is recommended to all the investors to invest in the Jb Hi Fi.The Company is performing well in the year 2019 and can write many stories of success in the upcoming years. The share price fluctuations are normal of JB HI FI. Company is viable to pay the liquid liabilities.

After going through a quick replay of the above questions, PEratiooftheyear2019is16.0it is clear that company is having good financial position and have good image in the market.

IV Conclusions

JB Hi Fi Company is a progressive company. It has set a benchmark for all those who wish to invest in home appliances products such as electronic appliances whether major or small appliances belonging to the company under the name JB Hi Fi. According to the statistical analysis we can say that company shows the best work done in 2019. We came to know about all the details of the company, because we studied the entire financial situation thoroughly.

The data has been researched and finalized with an accurate analysis of its condition, leading to the conclusion that JB Hi Fi has a strong position in Australia. In 2018, the price to income ratio was 18 xs. The higher the price to income ratio, the more optimistic the buyer will be about the company’s future performance. A company can reduce the price to income ratio by purchasing debt and spending cash. If the price to income ratio increases then it is better to deal in other companies rather than Jb Hi Fi Australia company.

References
  • Becker, B., & Ivashina, V. (2015). Reaching for yield in the bond market. The Journal of Finance70(5), 1863-1902.
  • Goldstein, I., Jiang, H., & Ng, D. T. (2017). Investor flows and fragility in corporate bond funds. Journal of Financial Economics126(3), 592-613.
  • Huo, B. (2012). The impact of supply chain integration on company performance: an organizational capability perspective. Supply Chain Management: An International Journal17(6), 596-610.
  • JB HI FI GROUP. (2019). Reports. [Online]. JB HI FI GROUP. http://annualreports.com/HostedData/AnnualReportArchive/J/ASX_JBH_2017.pdf [Accessed on 20.09.2019].
  • Stockpedia. (2019).PE ratio. [Online] Stockpedai. Available at https://investors.jbhifi.com.au/wp-content/uploads/2019/08/4E_FY19.pdf. [Accessed on 20.09.2019].
  • Talari, S., Shafie-Khah, M., Siano, P., Loia, V., Tommasetti, A., & Catalão, J. (2017). A review of smart cities based on the internet of things concept. Energies10(4), 421.
  • Tandon, K., & Malhotra, N. (2013). Determinants of stock prices: Empirical evidence from NSE 100 companies. International Journal of Research in Management & Technology (IJRMT), ISSN, 22499563.

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.

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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).

Metals Group Ltd by liquidity ratios

Assets

S.No, Particulars2016—17 2017-18 2018-19 
1Current       
  Current Assets $    222,331.00 2.172304295 $    470,047.00 2.9306685626260063.047904221
  Current Liabilities $    102,348.00  $    160,389.00 205389 
2Quick       
  Cash + Accts. Rec. $    193,894.00 1.894458123 $    405,946.00 2.5310089845175532.519867179
  Current Liabilities $    102,348.00  $    160,389.00 205389 
3Debt-to-Worth       
  Total Liabilities $    102,448.00 0.424246942 $    166,869.00 0.3002812622056160.260982365
  Net Worth $    241,482.00  $    555,709.00 787854 
         
INCOME STATEMENT RATIOS: Profitability (Earning Power)        
4Gross Margin       
  Gross Profit $    151,006.00 0.274932772 $    464,349.00 0.5034390277137520.53251722
  Sales $    549,247.00  $    922,354.00 1340336 
5Net Margin       
  Net Profit Before Tax $      52,299.00 0.095219455 $    415,711.00 0.4507065622832320.211314178
  Sales $    549,247.00  $    922,354.00 1340336 
         
ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios        
6Sales-to-Assets       
  Sales $    549,247.00 1.596973221 $    922,354.00 1.27647672613403361.349145923
  Total Assets $    343,930.00  $    722,578.00 993470 
7Return on Assets       
  Net Profit Before Tax $      52,299.00 0.15206292 $    415,711.00 0.5753164362832320.285093662
  Total Assets $    343,930.00  $    722,578.00 993470 
8Return on Investment       
  Net Profit Before Tax $      52,299.00 0.15206292 $    415,711.00 0.5753164362832320.285093662
  Net Worth $    343,930.00  $    722,578.00 993470 
         
ASSET MANAGEMENT RATIOS: Working Capital Cycle Ratios        
9Inventory Turnover       
  Cost of Goods Sold $ (285,729.00)-10.04778985 $ (458,005.00)-7.145052339-590584-5.4455294
  Inventory $      28,437.00  $      64,101.00 108453 
10Inventory Turn-Days       
  360                     360 0.012659563                     360 0.0056161373600.00331941
  Inventory Turnover $      28,437.00  $      64,101.00 108453 
11Accounts Receivable Turnover       
  Sales $    549,247.00 7.536940473 $    922,354.00 14.08367562134033625.41017669
  Accounts Receivable $      72,874.00  $      65,491.00 52748 

 

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.

Carrying Amount beg. of the year2016-172017-182018-19
Plant and equipment114561115610995
Land and buildings849796744
Exploration and evaluation772813857
Assets under development227291301
Development356334373292
Depreciation
Plant and equipment452154786464
Land and buildings257316412
Exploration and evaluation000
Assets under development000
Development105212591448
Carrying Amount end of the year
Plant and equipment111561099510690
Land and buildings796744650
Exploration and evaluation813857539
Assets under development291301889
Development343732923303

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 –

Averag Price$25 
Units to be sold450000
Life4 years
Equipmnet Cost$2,500,000 
Residual Value$500,000 
Working Cpaital$800,000 
Variable Cost$15  
NPVCurrent Case
Years01234
Equipmet Cost2500000    
Sales 11250000112500001125000011250000
Working Capital $800,000 800000800000800000
Variable Cost 6750000675000067500006750000
Residaul Value    $500,000 
Cash Fixed Cost 450000450000450000$450,000 
Profit Before Tax $3,250,000 $3,250,000 $3,250,000 $3,250,000 
Tax 975000975000975000975000
Profit after Tax $2,275,000 $2,275,000 $2,275,000 $2,275,000 
Discounted Values10.892857140.797190.711780.63552
Discounted Cash Flow2500000$2,031,250 $1,813,616 $1,619,300 $1,445,804 
Outflow2500000
Inflow6909969.76
Net Present Value4409969.76

 

Averag Price$20 
Units to be sold360000
Life4 years
Equipmnet Cost$2,500,000 
Residual Value$500,000 
Working Cpaital$800,000 
Variable Cost$18  
NPVWorst Case
Years01234
Equipmet Cost2500000    
Sales 7200000720000072000007200000
Working Capital $800,000 800000800000800000
Variable Cost 6480000648000064800006480000
Residaul Value    $500,000 
Cash Fixed Cost 550000550000550000$550,000 
Profit Before Tax ($630,000)($630,000)($630,000)($630,000)
Tax -189000-189000-189000-189000
Profit after Tax ($441,000)($441,000)($441,000)($441,000)
Discounted Values10.8928571430.797190.711780.63552
Discounted Cash Flow2500000($393,750)($351,563)($313,895)($280,263)
Outflow2500000
Inflow-1339471.06
Net Present Value-3839471.06
NPVBest Case
Years01234
Equipmet Cost2500000    
Sales 16200000162000001620000016200000
Working Capital $800,000 800000800000800000
Variable Cost 6480000648000064800006480000
Residaul Value    $500,000 
Cash Fixed Cost 350000350000350000$350,000 
Profit Before Tax $8,570,000 $8,570,000 $8,570,000 $8,570,000 
Tax 2571000257100025710002571000
Profit after Tax $5,999,000 $5,999,000 $5,999,000 $5,999,000 
Discounted Values10.8928571430.797190.711780.63552
Discounted Cash Flow2500000$5,356,250 $4,782,366 $4,269,970 $3,812,473 
Outflow2500000
Inflow18221058.73
Net Present Value15721058.73

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).

Price Earning Ratios = Market price / Earning per share
                         201920182017
Net income             44561,1342,775
Earning pae share       1.440.360.89

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 sciences1(4), 132-137.

Blum, P., & Dacorogna, M. (2014). DFADynamic 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]

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