Answer To: MBA403_T2_2020_Assessment_03 Page 1 Kaplan Business School Assessment Outline Assessment 3...
Harshit answered on Sep 27 2021
FINANCIAL ANALYSIS REPORT
(FOR AGL UTILITIES FROM THE LATEST ANNUAL REPORT OF 2020)
AGL Energy Ltd. is an Australian Listed (ASX) company. It is involved in the business of generation and retailing of electricity and gas for various commercial and residential use. It was first founded in 1837 as an Australian Gas Light company and has its headquarters in Sydney, New South Wales, Australia. The company is considered to Australia's largest generator of electricity and the nation's largest emitter of carbon. It is concerned with products like natural gas, energy, wind power, hydroelectricity, etc. This report will provide a Financial Report Analysis that will provide information about the overall performance and financial position of the company (Aleppo, K.G., Healy, P.M., Wright, S., Bradbury, M. and Coulton, J., 2020). It will help the stakeholders, both internal and external to take various decisions.
The analysis section of the report will provide details about the financial performance and performance indicators as shown in the latest annual report of 2020 provided by the company. Performance indicators are those which are used to access the results of the companies towards targets, objectives, etc. and may include analysis of the net profit, operating expenses, revenues, net profit after tax, etc (Henry, E., Robinson, T.R. and Van Greuning, J.H., 2012).
AGL aims at being one of the lead multi-product retailers in Australia. The company is providing 3.95 million total services to the customers which include around 28% of the households and a large business customer portfolio indicating that the business is growing. The total services to customers showed an increasing trend as compared to only 3.71 million customers served in FY 2019.
There has been a considerable improvement in the steps taken by the company towards society, safety, and the environment to ensure that they deliver the best quality services and products. The current ratio of the company in the year 2019 was at 1.33 (3396 / 2546) and in 2020 was 1.31(3122/2388) which indicates that the company is able to meet its short-term liabilities and obligations. The profit margin ratio is also 8.96% $(1,015m/12,160m*100)in 2020 which indicates that company has enough profits left for the shareholders and investors after meeting its operating expenses. The earnings per share was 158.4 cents as compared to 138.0 cents in 2019. It indicates that company aims to improve and maximise the shareholder’s wealth.The ROI of the company in 2020 was observed to be 12.56% (1,015m/8,075m*100). It was above average indicating that the funds of the company are managed wisely and efficiently indicating a profitable growth and success of the business in the future. The reported environmental regulatory reportable incidents have also improved and have reduced to a great extent as compared to last year.
The underlying profit after tax has reduced to $816 million as compared to $1,040 million in 2019. The total revenue for FY 2020 was reported to be $12,160 million which has decreased by around 8.2% as compared to 2019. It was also observed that the total gross margin was $3,677m as compared to $3,833m in 2019 which was down by approximately 4.1%. The operating costs increased to $1,607m which increased by around 3.8% from the last year. The depreciation and amortization costs also increased to $753mwhich was around 20.5% more as compared to the previous year. The total assets and net debts of AGL were also seen increasing over the last five years.The gross margin has also decreased...