Comfortdelgro Company Ltd. – Business and Management – Research Paper – karani11
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Comfortdelgro Company Ltd. – Business and Management
[Financial Analysis (Transport Industry)][Institution Affiliation][Insert Name]ContentsPART ONE: Financial Analysis 11.1Executive Summary 11.2 Introduction of the Report Objective 21.3The Ratio Analysis 21.4 Investment Thesis 51.5 Valuation 91.5.1 Discounted Cash Flow Analysis 91.5.2 Relative Value 91.5.3 Book Value Analysis 91.6 Key Risks 91.7 Conclusion 10 102.1 ComfortDelgro Company Ltd. Appropriate Sources of Finances 112.2 Advantages of Using Equity Financing 122.3 Shortcomings of Using Equity Financing 13 142.5 Conclusion 163.0 PART THREE: Analytical Discussion of Budgeting Process 163.1 Advantages of Budgeting Process 193.2 Shortcomings of Budgeting Process 193.5 Conclusion 224.0 References 22PART ONE: Financial Analysis1.1Executive SummaryComfortDelgro Company Ltd. is a Singaporean multinational firm. The company is one of the greatest land transport companies globally (Soon, 2016). The firm has a global workforce as well as a global shareholding base together with a global outlook.ComfortDelgro Company Ltd. was established in 2003 after the merger of two transport corporations- the Comfort and the Delgro firms (Hofmann, 2013). The two companies were formed in the early 1970s to offer land transport services. The two companies had recorded tremendous achievements regarding growth and profitability, and they had achieved an iconic status in the industry to the extent of being listed as the most success land transport corporations (Soon, 2016). After the merger, ComfortDelgro Company Ltd. has grown and expanded significantly. Currently, the company operates in seven nations and has a glob fleet of transport vehicles of approximately 46000 (Hofmann, 2013).The company mainly operates buses, taxi, rail, car renting and leasing, automobile engineering services and inspection services (Hamilton, 2012). Additionally, the company also offers insurance brokerage services as well as outdoor advertising and driving center among others (Hofmann, 2013).1.2 Introduction of the Report ObjectiveThe report analyzes the ComfortDelgro Company Ltd. financial health via the use of ratio analysis. The ratio analysis will help us in the determination of the viability of the company’s investment projects and if the management is competent towards optimization of the wealth of the shareholders (Frank, 2016). The financial analysis will involve two fiscal years to help in making a comparative analysis to investigate if the company is making any improvements or not (Jones, 2015). The report after the business analysis will be of significant use to the management, government, investors, public, and the auditors among other users of accounting users to help them in making informed decisions. The report will give recommendations on the areas of excellent to the company (Vogel, 2014). Besides, it will highlight the loopholes that exist within the business for the company to make a significant collection.1.3The Ratio AnalysisRatioFormulaYears Calculations20142015Return on Capital Employed (ROCE)Net profit before interest and tax ÷ (Share capital + Reserves + Long-term loans) x 100442.1* 100/ (646.4-77.4+ 493.7)= 41.60%450.7*100/ (665.5-64.2+ 432.2)= 43.61% Operating Profit Margin(revenues – cost of goods sold – operating expenses) ÷ revenues(4051.3- 3609.2)/ 4051.3= 10.91%(4111.5- 3660.8)/ 4111.5= 10.96%Gross Profit Margin(revenues – cost of goods sold) ÷ revenues(4051.3- 3609.2)/ 4051.3= 10.91%(4111.5- 3660.8)/ 4111.5= 10.96%GearingLong-term (non-current) liabilities ÷ [Share capital + Reserves + Long-term (non-current) liabilities]1133.6/ (646.4-77.4+1133.6)= 0.66581066.8 /(665.5-64.2+1066.8)= 0.6395Interest Coverageearnings before interest and taxes ÷ interest expense442.1/22.0= 20.10450.7/18.4= 24.49 Current Ratio(current assets ÷ current liabilities)1239.3/ 1258.3= 0.98491279.7/1136.9= 1.126
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By: karani11
Submitted: May 23, 2017
Essay Length: 6,848 Words / 28 Pages
Paper type: Research Paper Views: 391
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