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Assignment 3 Using accounting for decision making.Lecturer: Martin Turner.Student ID: NPM has decrease markedly since 2013 this could be due to an increase in cost of sales.Yet ROA figure has increased this could be due to projects that weren’t completed being completed and sales being finalised.Return on Net Operating Assets (RNOA), on the other hand, is the measure of a company’s capability to create profit from each piece of equity. It calculates the amount that a company earns for each dollar that it invests.Read more: Difference Between ROE and RNOA | Difference Between | ROE vs RNOA how asset intensive a business is and the efficiency of the assets employed.The speed with which an amount of cash equivalent to the money tied up in the business comes back through the door in fresh sales, not concerned with profit merely concerned with cash flow.My company has improved their ATO significantly over the past 4 years 2011 .20, 2012 .30 , 2013 .40 to 2014 .87 Again I think this just confirms that they have had projects that hadn’t quite sold and now they have been sold they also have sold some ?0.870.400.300.20???Net Profit Margin shows the proportion of profit for each sale dollar after expenses have been paid generally the higher the margin the better.Liquidity. How quickly your business can convert assets into cash for the purposes of paying your current bills/ liabilities this ratio is a good measure of financial strength of your business. Higher the figure the better.Debt/equity-shows you what type of financing your business is more reliant on debt or equity mid to low is preferable the higher the ratio the higher the risk.Everything I reads is telling me I am supposed to work out the debt equity ratio based on total liability yet you say to use the loan and borrowing amounts that create interest What is the difference WHY?You are supposed to be able to tell if your company is okay if you have low-mid ratio mine is 2014 32.8%, 2013 67.8%, 2012 61.9%, 2011 54.1% This tells me that my company has been in a position of moderate risk but is now in not quite so risky a position. Why do I think this is so? Could it be that they are finally getting return on assets and have paid back large debts therefore they are in a better position.Efficiency: How well a company utilises their assets to generate income. Time it takes company to collect cash from customers or time it takes company to convert inventory to cash. (Make sales) When companies are efficient with their resources they become profitable. Use assets to generate sales how many sales are generated for each dollar of company assets. .77 does this mean that for every $ my company makes 77 cents. For every 1,000,000 they make 770,000 that would make then very efficient I would think. They have not always been this efficient though because previously they were 2011 0.19, 2012 0.28 and 2013 0.34. From What I can work out they are going ahead again after having a period where things didn’t quite go to plan possibly due to weather, regulations, etc. In their Annual report 2012 they list : Actions by competitors : Government policy change : Difficulties in appointed builders sourcing raw materials and skilled labour, : Environment : Occupational health : Property financial reporting and purchase development : Use of information systems All as examples of things that can cause projects to not go to plan. But now projects are being completed they are able to finalise sales cover debts and fund new projects.Economic profit.Discussions with other students.Melissa Elliott16 hrsHas anybody been able to find WACC for property services industry?Top of FormLike · CommentRemoveKailee Jephcott I just googled mine but it's not property6 hrs · Likeyeah I googled mine as well found it last night eventually.I do not understand what ‘cost of capital means at all. Saying their cost of capital is 10% or 11.6% means absolutely nothing to me. What exactly does cost of capital mean. I get that it an opportunity cost but where do they get these figures from?After looking at several sights I have found two figures for Wacc for Finbar Group. 10.6% 2014 11.5% 2013 HYPERLINK "" Yet at another sight they had it currently 2.32% how can there be such a change in these figures over just a year? Does the price earnings ratio show the potential earnings that shares could be? So if this is the case then my company’s shares have the potential to generate $8.71 in future. This price is relatively stable so this means that my company’s shares are under-priced and have the potential to grow.Danielle Tetteroo uploaded a file.30 minsI am having real trouble trying to find the market price per share. I have done a PDF search in my annual report but it only discusses them, it doesn't give any figures. I have been searching the ASX for it also and cannot work out where it is. I have attached a screen shot of the information and figures I found on ASX so if someone could let me know where it is (or if I am totally off track) that would be great!ASX.docxDocumentDownloadPreviewUpload RevisionTop of FormLike · CommentRemoveMelissa Elliott use the calender tracking divise on their company page under shares find the closest date to june 30 and use that 30-06-2014 $ 35.22, 27-06-2013 $ 33.09, 2012 26.80, 2011 27.629 mins · LikeJosh EvansMay 26 at 8:15pmHey everyone, In relation to discussing your ratios, are you analysing each ratio individually or giving a generalised over view( i.e. they are all positive meaning profit creation) or are you going more in depth with these discussions, I've only discussed the first three ratios and have written over a thousand words! Just want people's opinions on how they are doing this to make sure I'm not over analysing things and getting too technical?Top of FormLike · CommentView 18 more commentsRemoveJosh Evans In reality I don't think there will be a industry standard as each company has different ways of calculating their wacc, so if you can't find it in any of your annual reports 10% would have to be used, just remember to discuss that you couldn't find it...See More16 hrs · Unlike · 1RemoveMelissa Elliott Okay thanks.16 hrs · LikeRemoveMelissa Elliott Have found one wacc figure for Finbar 11.5%Step 2 Capital Investment.ConcertoUnison2016201720182019202020212022202320242025$3,200,000$1,000,000$1,450,000$1,000,0005,050,0003,000,000350,000150,000$42,000,000$29,000,000$140,050,000$117,000,00038,005,00020,150,00010,075,00020,030,00012,020,00010,085,000Finbar Group have the opportunity to invest in two new High rise apartment complexes. The first development Concerto has 163 apartments and they are expected to sell for between $605,000 to $1,505,000. The remaining apartments are to be developed as a combined set of apartments and is expected that they will have 347 apartments with a sale value of $382,000 to $635,000 the following is the capital investment plan and expected cash flows from these projects over the next 7 to 10 years. New projects are not commenced until pre-sales are sufficient to cover expected peak project debt have been achieved. Then they look to secure funding from lending institutes after 70% of project development costs are secured. ................
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