MUSTAFA HATIM

SID : 871072

NAME

MUSTAFA HATIM

STUDENT ID

871072

SUBJECT

101 FINANCIAL MANAGEMENT

DATE OF SUBMISSION

19th DECEMBER 2014

LECTURER

MR. BENU CHATTERJEE

INTERNATIONAL BUSINESS 407

MUSTAFA HATIM

SID : 871072

EXECUTIVE SUMMARY
Adelaide Brighton is a leading integrated construction materials and industrial lime producer
which supplies a range of products into building, construction, infrastructure and mineral
processing markets throughout Australia.

Discussed below are the ratios and taking into consideration the positive and negative impacts
of these figures and ratios which are generally put into an Annual Report, where in investors
can find more about the company and which are also discussed by the Board of the company to
either change the path or continue what they are doing.

Table of Contents

1. Executive Summary

2. Introduction

3-4

3. Body

4-5

4. Evaluation

5-6

5. References

INTERNATIONAL BUSINESS 407

MUSTAFA HATIM

SID : 871072

INTRODUCTION
Adelaide Brighton is a leading integrated construction materials and industrial lime producer
which supplies a range of products into building, construction, infrastructure and mineral
processing markets throughout Australia. The Companys principal activities include the
production, importation, distribution and marketing of clinker, cement, industrial lime,
premixed concrete, construction aggregates and concrete products. Adelaide Brighton
originated in 1882 and is now an S&P/ASX100 company with 1,300 employees and operations
in all Australian states and territories.
Cement
Adelaide Brighton is the second largest
supplier of cement and clinker products in
Australia with major production facilities
and market leading positions in the
resource rich states of South Australia and
Western Australia. It is also market leader in
the Northern Territory. In addition to
domestic production, the Company is the
largest importer of cement, clinker and slag
into Australia with an unmatched supply
network that enables efficient access to
every mainland capital city market. This
network includes significant distribution
joint ventures in Victoria and Queensland.
Industrial Lime
Adelaide Brighton is the largest producer of
industrial lime in Australia, with production
assets in Western Australia and South
Australia. Industrial lime is an important
product for the mineral processing industry
in resources rich markets, particularly for
the production of alumina and gold, of
which Australia is a leading producer.
INTERNATIONAL BUSINESS 407

Concrete and Aggregates

Adelaide Brighton has a growing presence
in the premixed concrete and aggregates
industry in the eastern states of Australia,
augmented by joint venture operations. It
has strategic aggregates reserves west of
Sydney, in regional New South Wales, south
east Queensland and regional Victoria
through its wholly owned and joint venture
operations.
Concrete Products
Adelaide Brighton holds the leading
position in the Australian masonry products
market, with operations in Queensland,
New South Wales, Victoria, Tasmania and
South Australia.
Joint ventures and associates
Adelaide Brighton has a number of
significant investments in joint ventures and
associates in construction materials
production and distribution. These include
major cement distribution joint ventures in
Queensland (Sunstate Cement), Victoria
3

MUSTAFA HATIM

SID : 871072

(Independent Cement and Lime) and New

South Wales; regional concrete and
aggregates
positions
in
Victoria,
Queensland and New South Wales; and a
30% investment in a Malaysian white
cement and clinker producer (Aalborg
Portland Malaysia), which supplies the
Australian market.

Sustainability
Adelaide Brightons commitment to
sustainable development is demonstrated
through a range of actions implemented
across a balanced program of initiatives.
Adelaide Brighton believes that setting and
achieving
sustainability
objectives
throughout the organization assists long
term competitive business performance.

BODY

Short Term Solvency or Liquidity Ratio

Current Ratio
Quick Ratio
Cash Flow from Operations to Current Liabilities

2012
1.87
1.07
0.96

2013
1.84
1.20
1.17

Efficiency Ratio
Debtors' Turnover
Average days sales uncollected
Inventory Turnover
Inventory Turnover in Days

2012
24.33
15
5.47
66.72

2013
23.74
15.37
5.66
64.48

Profitability Ratio
Net Profit Margin
Interest Cost as a Percentage of Sales
Asset Turnover
Return on Assets
Return on Ordinary Shareholders' Equity

2012
0.21
0.026
0.45
0.14
5.4

2013
0.20
0.021
0.47
0.13
5.34

INTERNATIONAL BUSINESS 407

MUSTAFA HATIM

SID : 871072

Long Term Solvency or Financing Ratio

Debt to Equity
Debt to Total Assets
Interest Coverage
Cash Flow from Operations to Total Liabilities

2012
0.60
0.37
11.8
0.31

2013
0.53
0.35
13.5
0.40

Market-based Investment & Other Ratio

Price/Earnings
Dividend Yield
Dividend Cover
Net Tangible Asset Backing

2012
13
1.08
0.07

2013
15.4
1.06
0.06

EVALUATION

Short Term Solvency or Liquidity Ratio

The Current Ratio for 2012 was 1.87: 1, and had become in 2013 as 1.84:1, resulting a decrease
of current liabilities, while the current assets had an increase. The Quick Ratio for 2012 was
1.07:1, and had come to 1.2:1 in 2013, resulting an increase that positively reflect in liquidity of
the firm. The Cash Flow from Operations to Current Liabilities in 2012 was 0.96, and had come
to 1.17 in 2013 resulting a increase that could positively affect the firms liquidity.
Efficiency Ratio
The Debtors Turnover Ratio for 2012 was 24.33, and became 23.74 causing a decrease as a
negative indicator, because the Net Sales & Accounts Receivable both had an increase. Average
Days Sales Uncollected for 2012 was 15, and become 15.37 in 2013, causing an increase, a
negative indicator. Inventory turnover in 2012 was 5.47, and become 5.66 in 2013, causing a
slight increase a negative indicator, because the inventory has an increase from year 2011
(123.9), to be (134.8) in 2012 &, (136.3) for 2013, this turnover ratio had to be increased more.
The Inventory Turnover in Days in 2012 was 66.72, and become 64.481 in 2013, causing a
significant decrease in number of days to make inventory into sales, a positive indicator.

INTERNATIONAL BUSINESS 407

MUSTAFA HATIM

SID : 871072

Profitability Ratio

Net Profit Margin in 2012 stood as 0.21%, and turn into 0.2% in 2011, resulting an slight
decrease, a negative indicator for each dollar of Sales spent after payment of interest. Interest
Cost as Percentage of cost in 2012 stood as 0.026, and turn into 0.021 in 2013, resulting an
decrease, which is a negative indicator. The Turnover Ratio in 2012 stood 0.45, and in 2013 turn
into 0.47, resulting a slight increase, albeit in 2011 Total Assets were (1462.8) it increased in
2012 (1613.1) & in 2013(1633.4) this turnover ratio had to be increased more. Return on Assets
ratio in 2012 stood as 0.14%, and turn into 0.13% in 2013, resulting an decrease, a negative
indicator. The Return on Ordinary Shareholders Equity in 2012 stood as 5.4%, and turn into
5.34% in 2013, resulting an decrease around 0.05% a negative indicator.

Long Term Solvency or Financing Ratio

The Relation between debts to Equity in 2012 was 0.6, and become 0.53 in 2013, showing an
decrease, a positive indicator meaning the firm is not depending more on external money
lenders. Total Assets Financed by Debts in 2012 was 0.37, and became 0.35 in 2013, showing a
decrease in debt to total assets, a positive indicator meaning the firm depend less on debs for
assets takeover. Interest Coverage ratio Analysis in 2012 was 11.8, and become 13.5 in 2013,
showing an increase, a positive indicator since its above 1. Cash flow from Operations for 2012
was 186.9, and became 227.3 in 2013, showing an increase, while Total liabilities in 2012 was
607.2, it became 571.9 in 2013, showing a decrease, albeit the Cash Flow from Operations to
Liabilities Ratio in 2012 was 0.31, it became 0.4 in 2013 showing an increase, meaning a
positive indicator for the firms long term solvency.

Market-based Investment & Other Ratio

Price/Earnings Ratio in 2012 was 13, and became 15.4 in 2013, showing an increase a positive
indicator for future of the firms share price. Dividend Yield Ratio analysis in 2012 was 1.08%
and became 1.06% in 2013, showing a decrease which is a negative indicator showing that
investors are unsure in the firm. Dividend Cover Ratio Analysis in 2012 was 0.07, and became
0.06 in 2013, showing a decrease, a negative indicator meaning that the firms ability to pay
ordinary dividend to shareholders has decreased

INTERNATIONAL BUSINESS 407

MUSTAFA HATIM

SID : 871072

REFERENCES

Accounting4management.com, (2014). Managerial Accounting - Free Cost and Management

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Accounting-simplified.com, (2014). Current Ratio | Formula | Example | Analysis | Industry
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Adbri.com.au, (2014). Adelaide Brighton Ltd > Home. [online] Available at:
http://www.adbri.com.au/ [Accessed 19 Dec. 2014].
Chifley.ecampus.com.au, (2014). Chifley Business School: Login to the site. [online] Available at:
http://www.chifley.ecampus.com.au/course/view.php?id=894 [Accessed 19 Dec. 2014].
Investopedia, (2003). Current Ratio Definition | Investopedia. [online] Available at:
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Mafc.mq.edu.au, (2014). Macquarie Applied Finance Centre - Home - mafc. [online] Available
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Readyratios.com, (2014). Financial Analysis Software | Financial Analysis | Financial Statements
| Current Ratio | Financial Ratio | ReadyRatios.com. [online] Available at:
http://www.readyratios.com [Accessed 19 Dec. 2014].

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