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Introduction
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The Assignment is considered about the financial analysis of the A2 Milk Company. It is being a UK Dairy Business sector. The Introduction is being analyzed by the following points.
1.1. Brief overview:
Firstly it states that the A2 milk company is the one of the dairy product manufacturing companies (thea2milkcompany 2022). From all of the research it must be outlined that the company is a Joint venture company. They are selling many kinds of protein products. Mostly the company is being founded in New Zealand. On the other hand it seems that the company is making every milk product by using the milk of the cows. The company is distributing their products in many other major countries which are the United States of America, Australia, Singapore, Hongkong, etc. Beside the milk products this company is being sold many other products which are Aldi, Coles, etc.
1.2. Scope & Limitations:
Scope - The scope of the research that has been evaluated the company discusses that the research has been conducted on a wide basis. Research has been collected by the company’s annual report (Baranwal et al. 2021). They explain briefly the tax implications from the view of the income point and the point of view of the capital gains. On the other hand from the point of view of the investor it is being conducted with the shares, advantages of the shareholders, disadvantages of the shareholders.
Limitations - The limitations of the research that has been evaluated that the researcher has failed to collect valuable data within the specified time period. Beside this, the researcher was unable to collect proper resources due to budget issues on a large basis (Hohmann et al. 2021). The research was conducted within a short period of time which has led to disadvantages in completing the requirement of the study.
1.2. Methodology
Secondary method has been used by the researcher in this study to collect all the information and facts of the company readily. Positivism philosophy has been used by the researcher in this research to conduct the study in a positive way (Depping et al. 2020). Descriptive research is being followed by the researcher to present the information in a descriptive manner.
Findings and Analysis
Particulars |
Latest Annual Report |
Total Revenue / Sales |
1,667,201 |
Interest Expense |
(1,157,359) |
EBIT(Earnings before Interest and Income Tax) |
515,436 |
Income Tax Expense |
(159,790) |
Total Expenses |
(1,317,149) |
Net Profit Before Tax |
515,436 |
Current Assets |
1,128,546 |
Current Liabilities |
305,427 |
Total Liabilities |
319,255 |
Total Equity |
1,134,062 |
Table 1: Consolidated Figure
(Source: Self-Developed)
The consolidated figures have been included in the table which has been taken from the annual report of the A2 Milk Company for the year 2020-21. The total revenue of the company from the financial year is $1,667,201 and the total equity for the year ended is being $1,134,062.
Ratio analysis:
Profitability ratio is calculated for the analysis of the company of the year 2020-21.
Calculation of the Profitability Ratio of the A2 Milk Company : |
|
Particulars |
2021 |
1) Gross Profit ratio : |
|
[Gross profit / Net Sales * 100] |
|
Gross profit |
509,713 |
Net Sales |
1,205,034 |
Ratio : |
42.30 |
2) Operating Profit Ratio : |
|
[Operating profit / Net sales * 100] |
|
Operating Profit |
106,893 |
Net Sales |
1,205,034 |
Ratio : |
8.87 |
3) Return On asset : |
|
[Net income/Asset *100] |
|
Net Income |
80,658 |
Asset |
1,096,892 |
Ratio : |
7.35 |
4) Net Profit Ratio : |
|
[Net income/Net sales *100] |
|
Net Income |
80,658 |
Net Sales |
1,205,034 |
Ratio : |
6.69 |
5)Return On Investment Ratio : |
|
[Net Profit / Cost Of investment] |
|
Net Profit |
80,658 |
Cost of Investment |
5,239 |
Ratio : |
15.396 |
Table 2 : Profitability ratio
(Source: Self Developed)
By the analysis it sticks that the profitability ratio is brighter from another company. From the table the gross profit ratio is $509,713 and the net sales are $1,205,034]. For these reasons the results of the improving factors of the company are brighter from the other dairy companies of the UK like Bates Diary. The company is integrating strong investment as it is leading with financial position during the year on an overall basis.
Conclusions
From the upper calculation and all recommendations it sticks that the future of the company is brighter than the past factor of their all position. On the other hand, to improve them more firstly it must be said that the limitations can be following. The descriptive research is being attached in this assignment. Beside that the methodology is being collected by secondary manner and must be said that can be followed which is being researched by the researcher.