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FSA - Group Assignment Sample Sol.2.pdf - Table of Contents...

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1/24Table of Contents1.Background......................................................................................22.Profitability Analysis........................................................................32.1 ROA Analysis..............................................................................32.2 ROE Analysis...............................................................................63.Liquidity Analysis............................................................................94.Debt Analysis (Capital Structure).................................................105.Share Price Analysis......................................................................116.External Factors and Trends.........................................................166.1 Exchange Rate Impaction...........................................................166.2 Commodity Prices......................................................................177.Conclusion......................................................................................178.Reference........................................................................................189.Appendix........................................................................................22
2/24With the rapid development of global economy, more and more Australian miningcompanies start their business to export their products to foreign countries. However,the operating statuses of the various companies are not quite same. In this report, thesix companies have been selected and their performance and financial position will beexamined through the financial statements and other indicators.1.BackgroundMetals and Mining industry is one of the most significant sectors in primary industrywhich represents around 10% of GDP in Australia (AUD$152 billion) and employs2.2% of the total labor force.(Colebatch,T 2009)BHP Billiton Ltd (BHP) is the largest company in Australia in this industry which isalso one of the leading international companies in materials sector. The company runsits business in diversified metals and mining area such as aluminum, coal, iron ore,etc. The market capitalization of the company is A$105,215 million in 2012.(Hoovers, 2013)Fortescue Metals Group (FMG) is an Australian iron ore company which is also thefourth largest iron ore producer in the world. The group has its main area of operationlocated within the Pilbara region of Western Australia. The companys estimated valueis A$12,268 million in 2012.(FMG, ND)Mount Gibson Iron Limited (MGX) is one of Australian independent producers ofdirect shipping iron ore products, with three operating mines and established port andrail transport solutions throughout Western Australia. It has the value of A$567million in 2012.(MGX, ND)
3/24Newcrest Mining Limited (NCM) is the largest gold producer listed on AustralianStock Exchange and one of the world‟s largest gold mining companies.It runs goldand copper mines in Australia, Papua New Guinea, Indonesia and West Africa. Themarket capitalization of the company is A$15,356 million in 2012.(NCM, 2013)Northern Star Resources Ltd (NST) is an Australian gold mining and explorationcompany operating in the regions of Ashburton, Pilbara, Murchison and Kimberley,Western Australia. It has the market capitalization of A$ million in 2012 (YahooFinance, ND)Sandfire Resources NL (SFR) is a precious and base metals exploration companyoperating in Australia. The Company explores for gold, copper, zinc and silver inWestern Australia. The company is valued for A$925 million in 2012(Bloomberg,ND)2.Profitability Analysis2.1 ROA AnalysisTo analyze the profitability of a company, return on assets is often used as a key ratio.Return on assets (ROA) is a financial ratio that shows the percentage of profit that acompany earns in relation to its overall resources (total assets)(ReadyRatios, 2013).

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Financial Ratio, NCM, Fmg

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