财务报表分析与企业价值评估——以盟达集团有限公司为例外文翻译资料

Financial Statement Analysis and Business Valuation --Take Monadelphous Group Limited as an example

This report analysis Monadelphous Group Limiteds accounting and financial performance, forecasting and estimating its share price. There are six main parts in this report. According the analysis, the report provides recommendations and conclusions The current undervalues of Monadelphouss share price may have a strong increasing trend in the future, which means that purchasing the shares of Monadelphous now may be a rational choice. In conclusion, this report analysis is based on the annual reports of Monadelphous and there are some limitations to be considered.

1. Accounting analysis

1.1. The evaluation of earning quality

The ROA of the company is measured by dividing earnings in the current period by the total asset from the last financial period. For Monadelphous, its P-value from the regression between Lag earnings and earnings in the last ten years is 0.00189,which is lower than 0.1. Therefore, there is evidence to reveal the hypotheses that the coefficient is statistically differentfromzero, thus Monadelphouss earnings persistence can be analyzed based on this analysis. The coefficient between Monadelphous earnings and lag earning is 0.8788, comparing with the industry index, which is measured by the earnings from peer companies including Downer, NRW Holdings Limited and New Hope Corporation Limited. The coefficient of the industry index is 0.23. Also, the earnings persistence in Australia is 0.617, which indicates that Monadelphous earnings are relatively highly persistent. Higher the earning persistence, the higher the earning quality. Therefore, Monadelphouss earning is highly sustainable, which means that it has a high probability that the company can generate at least a certain amount of earnings in the future. Moreover, the company which has sustainable earnings would have a higher value than the company does not have.

1.2. The evidence on earnings quality

Another factor that influences the company earning quality is the accrual earnings, which is the difference between the operating cash flow and Netincome after tax. The correlation coefficient between these two Tables of Monadelphous is 0.4269, which is higher than the average of the industry (0.2351). It shows that there is less difference between Monadelphous net operating cash flow and net income. In other words, Monadelphous has lower accrual earnings. The company which has lower accrual earnings will generally have higher earning quality since the accrual earnings are expected to be realized in cash in the future. This may be the factor why Monadelphous earnings are more persistent and predictable than the industry.

2. Financial analysis

2.1. The analysis of simple DuPont

Monadelphous has the highest profit margin among these three companies, which indicates that Monadelphous may have the advantage in contract pricing and cost management. Also, Monadelphous asset turnover is the highest, which indicates that Monadelphous has the highest efficiency of deploying its assets to produce revenue. Generally, the company has a higher profit margin will have alower asset turnover, while Monadelphous, it has outperformed in both indexes. However, the lowest leverage of Monadelphous decreased its ROE, compared with the other two companies. Considering that Monadelphous has a large amount of cash on hand, a high dividend payout ratio and low leverage, it indicates that Monadelphous may lack investment opportunities. On the other hand, Monadelphous has a good cash buffer, strong

operating margins, and low leverage, which indicates that Monadelphous has sound economid fundamentals, and it may be less affected by the current downturn. However, Monadelphous revenue has decreased in the last five years, while other competitors like Downer and NRW holdings have a strong increase in their revenues. The high-profit margin and low leverage capital structure strategy may not be desirable for Monadelphous future development.

Monadelphous can increase its leverage and provide a more competitive contract price to succeed in the tender and boost its revenue. As a result, even though the profit margin will decrease, the increasing revenue can help to generate more returns to the shareholders.

2.3. The comparison of three key asset management

Choosing the receivable turnover period, inventory turnover period and purchase turnover period to evaluate the working capital management of Monadelphous, and they are used to determine the cash conversion of Monadelphous. A short cash conversion cycle means the company converses its net working capital to cash quickly. Comparing with Downer and NRW Holding limited, Monadelphous is overall operating its working capital less efficiently. This is mostly due to the poor management of trade receivable and payable. The credit given to customers in Monadelphous is 30 to 60 days, while the receivable turnover period is significantly higher than this range, resulting in higher credit risk exposure to Monadelphous.Also, the lower payable turnover period indicates that Monadelphous has less negotiation power with its suppliers. However, considering that Monadelphous has a large cash buffer, it may prefer to pay back its credit taken earlier in order to lower its cost of goods sold, and this may be the factor why Monadelphous can have a higher gross profit margin. Also, in 2020, Monadelphous has announced that they would pay back their suppliers earlier in order to support them in the current recession. In this case, Monadelphous can have sustainable future development through the cost of goods sold reduction by maintaining a good relationship with heir supplier and minimize the disruption to business during the current crisis.

2.4. The analysis ofliquidity ratio and debt ratio

Choosing the acid ratio

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