Sheet1 Formula2020Units Liquidity Ratios Current RatioCurrent Assets/Current Liabilities2.3ratio Quick Ratio(Current Assets – Inventory – Prepaid Expenses)/ Current Liabilities1.1ratio...

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I need a report that undertakes a general financial analysis, comparing financial position and performance over the two most recent financial years, of Bega Cheese Ltd.
3000 words.
Referencing: APA 6th Edition.

Sheet1 Formula2020Units Liquidity Ratios Current RatioCurrent Assets/Current Liabilities2.3ratio Quick Ratio(Current Assets – Inventory – Prepaid Expenses)/ Current Liabilities1.1ratio Profitability Ratios Gross Profit MarginGross Profit/Sales36Percent Net Profit MarginPAT/Sales6Percent Operating Profit MarginEBIT/Sales12Percent Return on AssetsPAT/Average Assets2.73Percent Return on EquityPAT/Average Equity6.12Percent Efficiency Ratios Accounts Receivable Turnover ratioCredit Sales/Average Accounts Receivables13.62times Days Receivables (DR)Average Accounts Receivables/ (Credit Sales/365)26.8days Accounts Payable Turnover RatioCredit Purchases/Average Accounts Payables9.06times Days Payables (DP)Average Accounts Payables/ (Credit Purchases/365)40.28days Inventory turnover ratioCost of Goods Sold/Average Inventory5.47times Days Inventory (DI)Average Inventory/ (Cost of Goods Sold/365)66.7days Cash Conversion CycleDR+DI - DP53.22times Capital Structure Ratios Debt to AssetsDebt / Total Assets36Percent Equity to AssetsEquity / Total Assets65Percent Debt to EquityDebt/Equity55Percent Interest coverage ratioEBIT/Interest4.22times Market Performance Ratios Earnings per sharePAT/Number of Shares0.11$ Dividend per shareDividend/Number of Shares0.05$ Price Earning MultipleMarket price of share / EPSNA BEGA CHEESE LIMITED 2020 Annual Report B E G A C H E E S E L IM IT E D A N N U A L R E P O R T 2 02 0 Contents Performance Highlights 02 Chairman’s Report 04 Chief Executive Officer’s Review 06 Directors’ Report 12 Auditor’s Independence Declaration 36 Corporate Governance Statement 37 Financial Statements 39 Notes to the Financial Statements 44 Directors’ Declaration 88 Independent Auditor’s Report 89 Shareholder Information 95 Corporate Directory 96 A special thanks to the staff, farmers and customers whose images we have used through the report to illustrate relevant facts of our business. They represent the many people that together make Bega the Great Australian Food Company it is today. Performance Highlights 32 ▲ Revenue ($m) Revenue has increased by $73 million, or 5%, compared to the prior year.1,493 millionFY20 20 1,420 millionFY20 19 International all business units 35% Bega International Export sales totalling $523 million, being an increase of 15% on the prior year, comprised 35% of total sales. FY2020 Revenue 59% Branded* 41% Bulk* * the Group has two new reporting segments: i. Branded – the manufacture of bulk ingredients into value added consumer products for internal or external brands. ii. Bulk – the manufacture of bulk dairy ingredients, nutritional and bio nutrient products. BEGA CHEESE LIMITED 2020 | PERFORMANCE HIGHLIGHTS 32 ▲ Financial results The statutory result for each of FY2020 and FY2019 included a number of non-recurring items, which in FY2020 related primarily to legal costs and in FY2019 related primarily to business acquisitions, impairment of Coburg assets and other corporate activity. On a statutory basis for FY2020 earnings before interest, tax, depreciation and amortisation (EBITDA) was $87.8 million, profit before tax (PBT) was $31.0 million and profit after tax (PAT) was $21.3 million. On a normalised basis for FY2020 EBITDA was $103.0 million, down 2%, PBT was $46.2 million, up 3%, and PAT was $31.9 million, up 3%. EBITDA ($’000) Basic earnings per share (cents) Normalised* Statutory 102,992104,867 FY2020FY2019** 78,933 FY2019** FY2020 87,824 Normalised* Statutory 14.9 14.9 FY2020FY2019** 9.9 2.1 FY2019** FY2020 Normalised* Statutory Profit after tax ($’000) Total dividend per share (cents) 30,929 31,886 FY2020FY2019** 4,447 FY2019** FY2020 21,268 Statutory 10.0 FY2020 11.0 FY2019 Production volume (tonnes) Production has decreased by 2%, compared to the prior year, reflecting the impact of drought and supply competition. Total dividend per share Bega Cheese Group has declared a final dividend of 5.0 cents per share, taking the total dividend relating to FY2020 up to 10.0 cents per share. This represents a total payment of $21.4 million, being 67% of the normalised profit after tax and a decrease of $2.0 million, or 9%, on the prior year. 303,252 297,668 *Normalised results exclude the impact of significant events occurring during the year. **Amounts have been restated, see note 32 of the financial statements for details. FY 20 19 FY 20 20 4 ▲ Chairman’s Report In the last two decades, it has often been the case that leaders from all walks of life have talked about a particular year as being tumultuous, a year of challenge, a year of change, a year of opportunities, a year the likes of which we have never seen before. While these statements are with good reason and foundation it is my view that FY2020 has made many of the preceding 20 years look simple and peaceful by comparison. At Bega Cheese we have faced highly competitive milk procurement markets, significant drought impacting our supply base, substantial increases in input costs across the supply chain, volatility in our markets and currency, never before experienced fires in Bega and Gippsland, and this was all prior to the arrival of COVID-19 and the disruption it has brought to our markets, customers, suppliers, staff and the global community. It is in the above context that I am proud to report on the sound and stable business performance of Bega Cheese for FY2020. While it has been a challenging year on many levels the strength of Bega Cheese’s strategy, experience and culture has once again been demonstrated and continues to position us well to manage challenge and change. It is important that the company acknowledges the misstatement in our FY2019 accounts which was discovered and corrected in our 1H FY2020 report. The misstatement was related to accounting systems changes associated with our Koroit acquisition and meant that EBITDA was overstated in the FY2019 year by $10.5 million. The company was very embarrassed by the error in our accounts and has conducted an internal and external review resulting in structural, personnel and process changes to ensure this does not happen again. Comparisons in my report will be to the corrected FY2019 EBITDA, EBIT, PBT and PAT. I am pleased to once again report that Bega Cheese has continued to grow with total revenues in FY2020 being $1.49 billion, an increase of 5%. While revenues continue to grow, a highly competitive milk supply environment and market both in Australia and internationally meant that normalised EBITDA and PAT were relatively stable at $103.0 million and $31.9 million respectively. Importantly, the company has reduced net debt significantly with FY2020 net debt being $236.4  million a reduction of 18%. The impact of drought and supply competition meant that overall production decreased by 2% to 298 thousand tonnes. Bega Cheese has continued to review and integrate its infrastructure to reflect changes in both our supply profile and the market. Following the closure of Coburg in FY2019 we have completed the integration of Koroit, continued to focus Tatura on high value dairy proteins and nutritionals, commenced consolidation of some of our processed cheese capacities between our Bega and Strathmerton facilities, created greater capacity flexibility at our Port Melbourne facilities and progressed toll manufacturing arrangements with other dairy industry manufacturers. The ongoing refinement of our manufacturing infrastructure reflects both changes in our supply regions and the market and is a great demonstration of the agility and experience of the business. The strategy of having diversified supply regions producing high value dairy ingredients for both the retail and dairy nutritionals markets continues to be a priority for the business. An important initiative this year was the construction and commissioning of our new lactoferrin infrastructure at Koroit. I am pleased to report that despite the challenges of COVID-19 the plant was commissioned on time and the company will receive the full benefit of the new capacity in FY2021. 5▲ BEGA CHEESE LIMITED 2020 | CHAIRMAN’S REPORT It has been an important year for our Bega Foods business. Sales in our peanut butter range continue to grow, particularly as a result of the successful launch of our Simply Nuts products, additionally we continue to develop our Farmer’s Table cream cheese and butter branded business, and the promotion of Vegemite has seen a return to growth, and the iconic status of this much loved brand reinforced. Bega Foods has successfully expanded in the spread’s category with the launch of B honey, which combined with our existing range and new product development gives us significant presence in Australian retail and food service channels in dairy and spreads. Bega Foods has continued to grow our international retail and food service business prior to the onset of COVID-19 where sales have since stabilised. It is noteworthy that the Bega Foods business was able to quickly respond to changed market conditions as a result of COVID-19, the business managed a collapse in both the Australian and international food service markets and a short term surge in demand in retail. The capability and flexibility of the team to quickly adjust and change in both the dairy and food business again confirms value of the diversity of the business and customers we serve in Australia and internationally. We were pleased to receive a favourable decision in our legal dispute with Kraft from the Full Court of the Federal Court of Australia in April  2020. The Full Court judgement confirmed Bega Cheese’s ownership of the trade dress currently associated with its peanut butter product. Kraft has now sought leave to appeal to the High Court. The High Court has set a date in mid-November 2020 to hear the application for leave to appeal to the High Court. The dispute with Fonterra regarding the Bega brand continues. The trial in the Supreme Court of Victoria completed in July 2020 and we are now awaiting judgment. Bega Cheese has grown substantially over the past decade making a number of acquisitions and managing significant change. As we have previously reported to the market it was appropriate that this year we conduct an organisational and process review to ensure that our business has the most effective and competitive structure available to us. This review has been completed and is being implemented, it does unfortunately mean that there will be some redundancies within the business, we are always conscious of the dedication and commitment our staff give and we will of course offer support to those whose jobs are not required. It is always important to continue to review the competitiveness of the business and ensure our structure and strategy are aligned and position us to be the company of choice for suppliers, staff, customers and shareholders alike. CEO Paul van Heerwaarden will provide more detail on the performance of the business and also expand on our actions and the impact of COVID-19. Paul has led the team wonderfully through a challenging year and his focus on the safety of all involved with Bega Cheese while stewarding the business through
Answered 1 days AfterApr 30, 2021FIN600

Answer To: Sheet1 Formula2020Units Liquidity Ratios Current RatioCurrent Assets/Current...

Harshit answered on May 02 2021
123 Votes
Student name – ID        FIN600/FINA6017TXYYYY
        Assignment –Company
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Executive Summary
Bega Cheese Limited, has improved a lot as compared to the past performance of the company and can be concluded by saying that the company can still try reach the industry average. As per the profitability ratios calculated in the project, the company has improved from the past years but as it is significantly less from the industry average, the company can try to reach the same improving their share and place in the industry. Significant progress is also required as compared to the acid efficiency ratio with the industry average. When talking about the liquidity ratios cal
culated in the project, the company’s current year performance has decreased to a great extent as compared to the previous years figure making the company less capable of paying it’s debts on time by using the liquid assets of the company. Therefore, an improvement in the gearing ratio makes the company a better company as they are trying to reduce the debt portion in the company and making the company less risky from the shareholder’s point of view. Shareholders of a company are attracted towards the company if they see that the company is less risky and so they are faithful and their return is not risky.
                                            Page Number
1    Introduction - Background and Business                            2
2    Company Analysis - Current financial performance, Key financial highlights,
Economic outlook                                        
3    Ratio Analysis
    3.1        Profitability ratios                                
    3.2        Efficiency ratios                                
    3.3        Liquidity ratios                                    
    3.4        Gearing ratios                                    
4    Recommendations and overall assessment                            
5    References/Bibliography                                    
Appendices –Excel Spreadsheet
1    Introduction
1.1        Background and Business
Bega cheese Limited is an Australian food company which was founded in the year 1899 as an Australian cooperative and was listed in the year 2011 on ASX. The company has more than 1800 employees all over the country and has approximately 36 companies which forms the group of Bega cheese Limited. The company is in the business of branding manufacturing and selling of dairy products. Some of the brands under the company are Vegemite, Farmers Table, Zoosh, Picky Picky, Tatura and DairyMont. E more than 50% of the company's revenue is generated from grocery products, spreads and daily consumer goods.
Bega cheese Limited holds around 15.7% all the retail cheese market of Australia. Based on the segment reporting in the financial statements of the company, Bega cheese Limited divides its company into different segments which are bulk segment and branded segment. Under the branded segment the company produces the ingredients and bulk quantity and then segregates it based on value and consumer products for both the internal and external branch. Under the bulk segment the company manufacturers bulk ingredients and bionutrient products.
The company acquired Lion dairy and drinks for $560 million company and concerted the same in a $3 billion company and became one of the top leaders and industry. The company produces cheese spreads, grocery products and farm services including the supply of milk.
2    Company Analysis
    2.1        Current Financial performance, Key financial highlights,Economic outlook
Company generated a total revenue of $1,493 million in the current financial year which was an increment from the previous year by 5% when the revenue of the company was $1,420 million. The normalised basic. Although there was not much increment in the profit after tax in the normalised but as per the statutory method the profit after tax of the company increased from $4,447,000 to $21,268,000 financial year.
Financial highlights/events of 2020
· As per segments of the company 59% of the revenue was generated through the branded segment and the remaining revenue was generated by bulk segment.
· There has been a 15% increase in the export sales of the company and the total revenue of the company through export was $523 million in the current financial year.
· In the retail business one of the major expense is the marketing expense. The marketing expense of the company decreased by 25% in the current year and it was at $15.8 million.
· The earnings before interest tax and depreciation of the company was at $102,992,000 in the year 2020 where it has decreased from $104,867,000.
· Earnings per share of the company was same in the current and the previous financial year at $14.9 but the statutory basic Earnings per share increased from $2.1 previous year to $9.9 year in current year.
Economic Outlook
· By the use of strategic plan of diversity for the company, the company has evolved in the past few financial years. The company's focus is to reduce high quality food products and maximize consumer satisfaction.
· There has been an decrease in the production of the company by 2%. Where the volume of the company decreased from 303252 tonnes in the previous year to 297668 tonnes who is the current financial year.
· In the financial report the chairman of the company mentioned that he was more than satisfied with the performance of the company and aims at growing the production and revenue in the current financial year. He also mentioned that the performance of the company was above the Expectations level of the board and the management of the company.
3    Ratio Analysis
    3.1        Profitability and Market ratios
    (see appendix for calculations)
    Industry average
    Return on equity
    4.19 %
    6.12 %
    Return on assets
    1.37 %
    2.73 %
    Gross profit margin
    19.36 %
    36 %
    Net profit margin
    1.34 %
    6 %
    Net Interest Income (if applicable)
    Expense ratio or Cost to income ratio
    Cash flow to sales
    9.22 %
     7.06 %
    Earnings per share
    $ 9.9 per share
    $ 2.10 per share
    Dividends per share
    5 per share
    5.5 per share
    Dividend payout ratio
    Price earnings ratio
    0.43 times
    2.17 times
The return on equity ratio represents the amount that is earned by the company for the equity shareholders. The average of return on equity is 6.12% whereas the company gave the return on equity of 4.19% in the year 2020. The return of equity in the year 2019 was at 1.08%. The return on equity the company has increased reflect that other company has been focusing on increasing its profit. This ratio helps the shareholders to decide whether or not to purchase the shares or invest in the company.
The return on assets is the amount return that is owned by the company by using the Assets of the company. The industry average for this ratio is 2.73% where are the company has earned 1.37% in the year 2020. The return on message of the company for the year 2019 was 0.34%. This reflects that the company has been utilising its assets more efficiently therefore the generating better profit. Although based on the industry average return on assets is quite anunfavorable but the company is focusing on increasing the same.
The gross profit margin is the amount of that the company is earning through direct operations. This reflects the amount of profit earned by the company as a percentage of sales. When does profit increases the shows that the margin of the company over the product is higher and the company has been able to generate better profits. The...

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