As a business management consultant, being appointed by Mr. Benson Evans who is the Chief Operations Officer of Hotel Properties Limited (HPL), the companies to be compared are Stockland Group and Mirvac Group. Both of these companies are involved in real estate business and have approached HPL for potential partnership in residential and resort development (Atkinson, 2012). As part of the consultancy agreement, the overall performance of both the companies have been analyzed individually using ratio analysis as stated below (Alvarez, 2013):
Capital Structure and Leverage measures help us to understand the sources of finance and the dependence of debts over shareholder’s equity as well as the burden of debts over the company. The various ratios helps us to understand the value of the company in terms of net worth, it’s employed capital, whether the net worth is worth the fixed assets owned, the obligations over the company in terms of interest costs, etc (Berry, 2009).
Net Worth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Total Liabilities |
5874800000 |
6602000000 |
6942000000 |
7688000000 |
7568000000 |
Net Worth ( Total Assets – Total Liabilities) |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Capital Employed |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Current Liabilities |
2801800000 |
2953000000 |
3293000000 |
3714000000 |
3778000000 |
Capital Employed (Total Assets – Current Liabilities) |
11267900000 |
11947000000 |
12436000000 |
13228000000 |
13717000000 |
Fixed Assets To Net Worth Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Fixed Assets |
12862800000 |
13294000000 |
14575000000 |
15531000000 |
16172000000 |
Net Worth |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Fixed Assets to Net Worth Ratio (Fixed Assets / Net Worth) |
1.57 |
1.60 |
1.66 |
1.68 |
1.63 |
Current Liablities To Net Worth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Liabilities |
2801800000 |
2953000000 |
3293000000 |
3714000000 |
3778000000 |
Net Worth |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Current Liabilities to Net Worth (Current Liabilities / Net Worth) |
0.34 |
0.36 |
0.37 |
0.40 |
0.38 |
Total Debt Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Liabilities |
5874800000 |
6602000000 |
6942000000 |
7688000000 |
7568000000 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Total Debt Ratio (total liabilities / total assets) |
0.42 |
0.44 |
0.44 |
0.45 |
0.43 |
Debt Equity Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Debts |
2352400000 |
2815000000 |
3030000000 |
3319000000 |
3272000000 |
Equity/Shareholder’s funds |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Debt-Equity Ratio (debt / equity) |
0.29 |
0.34 |
0.34 |
0.36 |
0.33 |
Equity Multiplier |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Total Equity |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Equity Multiplier (total assets / total equity) |
1.72 |
1.80 |
1.79 |
1.83 |
1.76 |
Times Interest Earned |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Earnings before tax |
440300000 |
528000000 |
604000000 |
681000000 |
857000000 |
Interest |
79000000 |
79000000 |
69000000 |
74000000 |
79000000 |
Times Interest Earned (earnings before taxes and interest / interest payment) |
5.57 |
6.68 |
8.75 |
9.20 |
10.85 |
Net Worth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Total Liabilities |
3235600000 |
3745600000 |
3941400000 |
3989000000 |
4136000000 |
Net Worth ( Total Assets – Total Liabilities) |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Capital Employed |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Current Liabilities |
911000000 |
899400000 |
887400000 |
1353000000 |
944000000 |
Capital Employed (Total Assets – Current Liabilities) |
8335400000 |
9022300000 |
9516100000 |
9816000000 |
11164000000 |
Fixed Assets To Net Worth Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Fixed Assets |
8355000000 |
8203900000 |
9463600000 |
9923000000 |
11081000000 |
Net Worth |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Fixed Assets to Net Worth Ratio (Fixed Assets / Net Worth) |
1.39 |
1.33 |
1.46 |
1.38 |
1.39 |
Current Liablities To Net Worth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Liabilities |
911000000 |
899400000 |
887400000 |
1353000000 |
944000000 |
Net Worth |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Current Liabilities to Net Worth (Current Liabilities / Net Worth) |
0.15 |
0.15 |
0.14 |
0.19 |
0.12 |
Total Debt Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Liabilities |
3235600000 |
3745600000 |
3941400000 |
3989000000 |
4136000000 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Total Debt Ratio (total liabilities / total assets) |
0.35 |
0.38 |
0.38 |
0.36 |
0.34 |
Debt Equity Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Debts |
2088600000 |
2599700000 |
2747200000 |
2293000000 |
2872000000 |
Equity/Shareholder’s funds |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Debt-Equity Ratio (debt / equity) |
0.35 |
0.42 |
0.43 |
0.32 |
0.36 |
Equity Multiplier |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Total Equity |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Equity Multiplier (total assets / total equity) |
1.54 |
1.61 |
1.61 |
1.56 |
1.52 |
Times Interest Earned |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Earnings before tax |
363300000 |
447900000 |
471700000 |
584000000 |
588000000 |
Interest |
35300000 |
144800000 |
145100000 |
137000000 |
162000000 |
Times Interest Earned (earnings before taxes and interest / interest payment) |
10.29 |
3.09 |
3.25 |
4.26 |
3.63 |
Coming to liquidity measures, we adopt such measures to understand the solvency position of the company, that is, its ability to pay its liabilities if required to be paid immediately.
Net Working Capital To Total Asset Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Assets |
1206900000 |
1606000000 |
1154000000 |
1411000000 |
1323000000 |
Current Liabilities |
2801800000 |
2953000000 |
3293000000 |
3714000000 |
3778000000 |
Working Capital |
(1594900000) |
(1347000000) |
(2139000000) |
(2303000000) |
(2455000000) |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Net Working Capital To Total Asset Ratio |
(0.11) |
(0.09) |
(0.14) |
(0.14) |
(0.14) |
The company shows a weak solvency position as there is a negative working capital since 2013 which has increased only (Rivenbark, Vogt, & Marlowe, 2009).
Current Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Assets |
1206900000 |
1606000000 |
1154000000 |
1411000000 |
1323000000 |
Current Liabilities |
2801800000 |
2953000000 |
3293000000 |
3714000000 |
3778000000 |
Current Ratio (Current Assets/ Current Liabilities) |
0.43 |
0.54 |
0.35 |
0.38 |
0.35 |
Also, where the current assets are desired to be at least above 1, the company has a weak current ratio which kept on decreasing from 0.43 in 2013 to 0. 35 in 2017.
Quick Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Assets |
1206900000 |
1606000000 |
1154000000 |
1411000000 |
1323000000 |
less : CA Other |
810700000 |
753000000 |
881000000 |
1069000000 |
923000000 |
Quick Assets |
396200000 |
853000000 |
273000000 |
342000000 |
400000000 |
Quick Liabilities |
2801800000 |
2953000000 |
3293000000 |
3714000000 |
3778000000 |
Quick Ratio ( Quick Assets/Quick Liabilities) |
0.14 |
0.29 |
0.08 |
0.09 |
0.11 |
Note : Assuming that Others in Current Assets is composed of closing stock.
Also, quick ratio shows worse position than current ratio which remains low in all the five years.
Net Working Capital To Total Asset Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Assets |
891400000 |
1717800000 |
939900000 |
1246000000 |
1027000000 |
Current Liabilities |
911000000 |
899400000 |
887400000 |
1353000000 |
944000000 |
Working Capital |
(19600000) |
818400000 |
52500000 |
(107000000) |
83000000 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Net Working Capital To Total Asset Ratio |
(0.0021) |
0.0825 |
0.0050 |
(0.0096) |
0.0069 |
This company showed positive changes in 2017 as compared to 2016, that is, from negative balance $107,000,000 to positive $83,000,000 which is a drastic improvement (Seitz & Ellison, 2009).
Current Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Assets |
891400000 |
1717800000 |
939900000 |
1246000000 |
1027000000 |
Current Liabilities |
911000000 |
899400000 |
887400000 |
1353000000 |
944000000 |
Current Ratio (Current Assets/ Current Liabilities) |
0.98 |
1.91 |
1.06 |
0.92 |
1.09 |
The company shows a better current position with 1.09 currently.
Quick Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Assets |
891400000 |
1717800000 |
939900000 |
1246000000 |
1027000000 |
less : CA Other |
641500000 |
1435000000 |
774400000 |
780000000 |
824000000 |
Quick Assets |
249900000 |
282800000 |
165500000 |
466000000 |
203000000 |
Quick Liabilities |
911000000 |
899400000 |
887400000 |
1353000000 |
944000000 |
Quick Ratio ( Quick Assets/Quick Liabilities) |
0.27 |
0.31 |
0.19 |
0.34 |
0.22 |
Note : Assuming that Others in Current Assets is composed of closing stock.
However, quick ratio, being a real indicator after excluding closing stock, shows worse solvent position. However, as per the analysis, the current liabilities have been reduced drastically in 2017 (Siciliano, 2015).
Efficiency ratios are a measure of checking the operating effectiveness of fixed assets whether they are being used properly to generate revenue, the debtors & creditors policies, relation between profits and revenues, etc.
Average Collection Period |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Average Receivables |
169100000 |
119000000 |
103000000 |
134000000 |
139000000 |
Revenues |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Average Collection Period (Average Receivables*365/revenues) [in days] |
92 days |
64 days |
54 days |
67 days |
67 days |
The lesser the days, the better cash flow is into the firm. The company shows a decrease in days which is a positive sign, that is, the credit policy is improving.
Accounts Relievable To Revenues |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Average Receivables |
169100000 |
119000000 |
103000000 |
134000000 |
139000000 |
Revenues |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Accounts relievable to revenues (average accounts recievablers/ revenue sales) |
0.25 |
0.18 |
0.15 |
0.18 |
0.18 |
Accounts Payable To Revenues |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Average Payables |
310400000 |
554000000 |
595000000 |
643000000 |
585000000 |
Revenues |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Accounts Payable To Revenues (Average Payables/ Revenues) |
0.46 |
0.82 |
0.85 |
0.88 |
0.78 |
The debtors turnover ratio shows no significant change for all the five years while the creditors turnover ratio is high for all the five years except in 2013.
Assets To Revenue Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Revenues |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Assets to revenue ratio (Average total assets/ Revenues) |
20.87 |
21.94 |
22.53 |
23.27 |
23.26 |
Total Assets Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Revenues |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Total Assets Ratio ( Revenues/ Total Sales) |
0.05 |
0.05 |
0.04 |
0.04 |
0.04 |
The asset to revenue shows a positive result which is 24% in 2017. However, the total asset ratio shows a negative result meaning that the company isn’t using it fixed assets in the most effecient way.
Working Capital Turnovers |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Revenues |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Working Capital |
(1594900000) |
(1347000000) |
(2139000000) |
(2303000000) |
(2455000000) |
Working Capital Turnover ( Revenues/Working Capital) |
(0.42) |
(0.50) |
(0.33) |
(0.32) |
(0.31) |
Operational Efficiency Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Rental Income |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Investment Income |
7100000 |
24000000 |
86000000 |
12000000 |
75000000 |
Other Income |
1053200000 |
1241000000 |
1412000000 |
1600000000 |
2043000000 |
PreTax Profit |
440300000 |
528000000 |
604000000 |
681000000 |
857000000 |
Expenses |
1294100000 |
1416000000 |
1592000000 |
1659000000 |
2013000000 |
Revenue sales |
674100000 |
679000000 |
698000000 |
728000000 |
752000000 |
Operational Efficiency Ratio (Expenses/Revenue Sales) |
1.92 |
2.09 |
2.28 |
2.28 |
2.68 |
Note : We are assuming that the profit has been calculated after deducting expenses from the revenues. Also, there is no information regarding purchases. So, the difference would be regarded as operating or general expenses. |
|||||
Note : Stockland is involved in real estate business and that is why, rental income is solely considered as the revenue or sales. Investment income is assumed to be other business or other income of the company. |
|||||
The working capital ratio shows negative results in all the five years while the operational effeciency ratio shows higher expenditures of the company.
Average Collection Period |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Average Receivables |
110900000 |
121200000 |
94400000 |
110000000 |
97000000 |
Revenues |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Average Collection Period (Average Receivables*365/revenues) [in days] |
69 days |
68 days |
56 days |
65 days |
57 days |
The lesser the days, the better cash flow is into the firm. The company shows a decrease in days which is a positive sign.
Accounts Relievable To Revenues |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Average Receivables |
110900000 |
121200000 |
94400000 |
110000000 |
97000000 |
Revenues |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Accounts relievable to revenues (average accounts recievablers/ revenue sales) |
0.19 |
0.19 |
0.15 |
0.18 |
0.16 |
Accounts Payable To Revenues |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Average Payables |
549900000 |
505100000 |
673100000 |
531000000 |
519000000 |
Revenues |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Accounts Payable To Revenues (Average Payables/ Revenues) |
0.94 |
0.78 |
1.09 |
0.87 |
0.84 |
The debtors turnover ratio is low for all the five years while the creditors turnover ratio is high for all the five years.
Assets To Revenue Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Revenues |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Assets to revenue ratio (Average total assets/ Revenues) |
15.86 |
15.24 |
16.82 |
18.22 |
19.59 |
Total Assets Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Revenues |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Total Assets Ratio ( Revenues/ Total Sales) |
0.06 |
0.07 |
0.06 |
0.05 |
0.05 |
The asset to revenue shows a positive result which is 20% in 2017. However, the total asset ratio shows a negative result meaning that the company isn’t using it fixed assets in the most effecient way.
Working Capital Turnovers |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Revenues |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Working Capital |
(19600000) |
818400000 |
52500000 |
(107000000) |
83000000 |
Working Capital Turnover ( Revenues/Working Capital) |
(29.75) |
0.80 |
11.78 |
(5.73) |
7.45 |
Operational Efficiency Ratio |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Rental Income |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Investment Income |
19700000 |
22700000 |
33000000 |
512000000 |
12000000 |
Other Income |
900000000 |
1204900000 |
1285800000 |
1812000000 |
1728000000 |
PreTax Profit |
363300000 |
447900000 |
471700000 |
584000000 |
588000000 |
Expenses |
1139500000 |
1430600000 |
1465500000 |
2353000000 |
1770000000 |
Revenue sales |
583100000 |
650900000 |
618400000 |
613000000 |
618000000 |
Operational Efficiency Ratio (Expenses/Revenue Sales) |
1.95 |
2.20 |
2.37 |
3.84 |
2.86 |
Note : We are assuming that the profit has been calculated after deducting expenses from the revenues. Also, there is no information regarding purchases. So, the difference would be regarded as operating or general expenses. |
|||||
Note : Stockland is involved in real estate business and that is why, rental income is solely considered as the revenue or sales. Investment income is assumed to be other business or other income of the company. |
|||||
The working capital ratio shows a drastic improvement in 2017 while the operational effeciency ratio shows higher expenditures of the company.
Profitability measures show the relation between the profits and revenues of the company and the return to equity shareholders. Also, it shows the return on assets to show how well the assets are being used to generate revenues.
Net Profit Margin |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Pretax Profits |
440300000 |
528000000 |
604000000 |
681000000 |
857000000 |
Total Revenue |
1734400000 |
1944000000 |
2196000000 |
2340000000 |
2870000000 |
Net profit margin (net profit before income tax / sales) |
25.39% |
27.16% |
27.50% |
29.10% |
29.86% |
The net profit margin shows an increasing trend from 2013 to 2017 but slight changes are observed.
Return On Equity |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Reported NPAT After Abnormals |
104600000 |
527000000 |
903000000 |
889000000 |
1195000000 |
Equity/Shareholder’s funds |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Return on equity (net profit/ average equity) |
1.28% |
6.35% |
10.28% |
9.61% |
12.04% |
There is an increasing return to the equity holders which was 1.28% in 2013 and 12.04% in 2017.
Return On Assets |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Pretax Profits |
440300000 |
528000000 |
604000000 |
681000000 |
857000000 |
Total Assets |
14069700000 |
14900000000 |
15729000000 |
16942000000 |
17495000000 |
Return on asset (net profit/ average total assets) |
3.13% |
3.54% |
3.84% |
4.02% |
4.90% |
However, the return to assets ranges between 3-5% which is not a good sign as it shows the inefficiency of the management to use their assets in the best possible way for generating revenues.
Net Profit Margin |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Pretax Profits |
363300000 |
447900000 |
471700000 |
584000000 |
588000000 |
Net Sales |
1502800000 |
1878500000 |
1937200000 |
2937000000 |
2358000000 |
Net profit margin (net profit before income tax / sales) |
24.17% |
23.84% |
24.35% |
19.88% |
24.94% |
The net profit margin shows a decrease in 2016 but an increase in 2017.
Return On Equity |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Reported NPAT After Abnormals |
139900000 |
447300000 |
609900000 |
1033000000 |
1164000000 |
Equity/Shareholder’s funds |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Return on equity (net profit/ average equity) |
2.33% |
7.24% |
9.44% |
14.39% |
14.60% |
There is an increasing return to the equity holders which was 2.33% in 2013 and 14.60% in 2017.
Return On Assets |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Pretax Profits |
363300000 |
447900000 |
471700000 |
584000000 |
588000000 |
Total Assets |
9246400000 |
9921700000 |
10403500000 |
11169000000 |
12108000000 |
Return on asset (net profit/ average total assets) |
3.93% |
4.51% |
4.53% |
5.23% |
4.86% |
However, the return to assets ranges between 3-5% which is not a good sign as it shows the inefficiency of the management to use their assets in the best possible way for generating revenues.
Growth potentials show the comparison of revenues or equity with previous years balances to evaluate the growth of the company or the potential capacity of the company.
Revenue Growth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Revenue in current year |
1734400000 |
1944000000 |
2196000000 |
2340000000 |
2870000000 |
Revenue in previous year |
– |
1734400000 |
1944000000 |
2196000000 |
2340000000 |
Revenue Growth (Current Year Revenue-Previous Year Revenue)/Previous Year Revenue*100 |
– |
12.08% |
12.96% |
6.56% |
22.65% |
Equity Growth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Equity In Current Year |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
9927000000 |
Equity In Previous Year |
– |
8194900000 |
8298000000 |
8787000000 |
9254000000 |
Equity Growth ( Equity in current year-equity in previous year/previous year equity)*100 |
– |
1.26% |
5.89% |
5.31% |
7.27% |
The company shows a high improvement in 2017 as compared to 2016 with 22.65% in case of revenue growth and 7.27% in case of equity growth.
Profit Growth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Year Profit After Tax and Abnormals |
104600000 |
527000000 |
903000000 |
889000000 |
1195000000 |
Previous Year Profit After Tax and Abnormals |
– |
104600000 |
527000000 |
903000000 |
889000000 |
Profit Growth (Current Year Profit-Previous Year Profit/Previous Year Profit)*100 |
– |
403.82% |
71.35% |
-1.55% |
34.42% |
NOTE : From Profitability ratios, total revenue has been considered to reflect a true percentage of net profits, growth results, etc. |
However, the profit growth isn’t as good as the results in 2014 and 2015.
Revenue Growth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Revenue in current year |
1502800000 |
1878500000 |
1937200000 |
2937000000 |
2358000000 |
Revenue in previous year |
1502802013 |
1502800000 |
1878500000 |
1937200000 |
2937000000 |
Revenue Growth (Current Year Revenue-Previous Year Revenue)/Previous Year Revenue*100 |
0.00% |
25.00% |
3.12% |
51.61% |
-19.71% |
Equity Growth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Equity In Current Year |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
7972000000 |
Equity In Previous Year |
5754700000 |
6010800000 |
6176100000 |
6462100000 |
7180000000 |
Equity Growth ( Equity in current year-equity in previous year/previous year equity)*100 |
4.45% |
2.75% |
4.63% |
11.11% |
11.03% |
The company shows a negative percentage in 2017 as compared to 2016 where 52% was observed, thus, showing a drastic fall in case of revenue growth. However, it shows not much change in equity growth with 11.03% in 2017.
Profit Growth |
|||||
Particulars |
2013 |
2014 |
2015 |
2016 |
2017 |
Current Year Profit After Tax and Abnormals |
139900000 |
447300000 |
609900000 |
1033000000 |
1164000000 |
Previous Year Profit After Tax and Abnormals |
416100000 |
139900000 |
447300000 |
609900000 |
1033000000 |
Profit Growth (Current Year Profit-Previous Year Profit/Previous Year Profit)*100 |
-66.38% |
219.73% |
36.35% |
69.37% |
12.68% |
NOTE : From Profitability ratios, total revenue has been considered to reflect a true percentage of net profits, growth results, etc. |
Also, the profit growth isn’t as good as the results in 2014 and 2016. It is much lower in the current year.Comparison Of Overall Performance
Comparing the overall performance of both the companies:
Analyzing the companies individually and comparing their results, the observations say that both the companies have flaws and therefore, relevant decision is hard to be formed. However, we consider Mirvac Group to be a better capitalizing and ideal partner. The following organization will form the most appropriate potential partnership with HPL.
The reasons behind recommending this company can be enumerated as below:
However, the most commendable part of Mirvac Group is its drastic improvements in the year 2017 which were worse in 2016. This somewhere shows the company’s ability to take strong decisions and focusing more on other factors than higher revenues. The company’s changes such as reduction of current liabilities, increase in current assets, increase in equity growth, better debtor turnover, etc reflects its strong determination towards taking its company onto higher levels. This also proves their promising nature towards the coming up projects and thus, we recommend Mirvac Group for this deal.
Conclusion
The above comparative analysis is however restricted to the financial information. The certain information such as a company’s future plans, or some ongoing projects due to which it is incurring heavy expenditure and such other non financial information are equally important to understand the business operations and accordingly, compare it with other companies. However, ratio analysis tool aren’t based on such information. We can conclude by choosing Mirvac over Stockland for HPL Limited on the basis of above analysis.
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