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Description |
Formuals |
FMG |
OZL |
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Total assets (book value) ($m) |
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$ 19,115.00 |
$ 2,826.00 |
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Recommendation: On the basis of the calculations on both the stock of FMG and OZL. It has been found that the market value to book value, return on equity, dividend per share, sustainbale growth, intrinsic value etc of FMG is better than OZL. It explains that the invetsment into FMG would offer higher returns to the investors rather than investing into OZL. |
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Total liabilities (book value) ($m) |
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$ 9,381.00 |
$ 310.00 |
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Number of shares (millions) |
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$ 3,111.00 |
$ 299.00 |
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Market capitalisation ($m) |
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$ 16,239.00 |
$ 2,739.00 |
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Net income ($m) |
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$ 2,093.00 |
$ 231.00 |
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Dividends paid ($m) |
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$ 755.00 |
$ 42.00 |
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Description |
Formuals |
FMG |
OZL |
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Market value of equity to book vakue of equity ratio |
Market value of equity / book vakue of equity ratio |
$ 1.67 |
$ 1.09 |
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Return on equity |
Net profit / Total stockholder’s equity |
21.502% |
9.181% |
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Dividend per share |
Dividend paid / number of shares |
$ 0.24 |
$ 0.14 |
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Sustainable growth rate per annum |
Return on equity * (1- dividend payout ratio) |
13.75% |
7.51% |
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Intrinsic value |
Dividend (1+ growth arte) / (required rate of return – growth rate) |
$ 108.52 |
$ 2.33 |
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| Calculation of Net present value |
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Calculation of accounting rate of return |
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| Year |
Cash outflow |
Cash inflow |
P.V. factor |
Present value |
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Year |
Cash outflow |
Cash inflow |
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| 0 |
$ -25,00,000.00 |
|
1.00 |
$ -25,00,000.00 |
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0 |
$ -25,00,000.00 |
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| 1 |
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$ 5,00,000.00 |
0.93 |
$ 4,67,289.72 |
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1 |
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$ 5,00,000.00 |
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| 2 |
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$ 5,00,000.00 |
0.87 |
$ 4,36,719.36 |
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2 |
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$ 5,00,000.00 |
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| 3 |
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$ 5,00,000.00 |
0.82 |
$ 4,08,148.94 |
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3 |
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$ 5,00,000.00 |
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| 4 |
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$ 5,00,000.00 |
0.76 |
$ 3,81,447.61 |
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4 |
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$ 5,00,000.00 |
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| 5 |
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$ 5,00,000.00 |
0.71 |
$ 3,56,493.09 |
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5 |
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$ 5,00,000.00 |
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| 6 |
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$ 5,00,000.00 |
0.67 |
$ 3,33,171.11 |
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6 |
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$ 5,00,000.00 |
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| 7 |
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$ 5,00,000.00 |
0.62 |
$ 3,11,374.87 |
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7 |
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$ 5,00,000.00 |
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| 8 |
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$ 5,00,000.00 |
0.58 |
$ 2,91,004.55 |
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8 |
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$ 5,00,000.00 |
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| 9 |
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$ 5,00,000.00 |
0.54 |
$ 2,71,966.87 |
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9 |
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$ 5,00,000.00 |
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| NPV (Total cash outflow – total cash inflow) |
$ 7,57,616.12 |
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ARR = Total profit / intial investment |
20.0% |
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| Calculation of Internal rate of return |
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the project should be accepted by the company as the net cash flow of the company is positive which explains about the profitability level of the company. further, the inetranl rate of return of the company is better than the cost of capital and lastly, the accounting rate of return also expalins about the better position of the company. thus, the project should be accepted by the company. |
| Year |
Cash outflow |
Cash inflow |
Total cash flow |
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| 0 |
$ -25,00,000.00 |
|
$ -25,00,000.00 |
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| 1 |
|
$ 5,00,000.00 |
$ 5,00,000.00 |
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| 2 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 3 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 4 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 5 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 6 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 7 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 8 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| 9 |
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$ 5,00,000.00 |
$ 5,00,000.00 |
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| IRR |
14% |
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Calculation of yearly return from Monthly returns |
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Monthly average retun of security |
4.05% |
-5.70% |
5.29% |
5.08% |
-0.95% |
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Number of days in a month |
12 |
12 |
12 |
12 |
12 |
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Formula |
(1+average return)^number of days -1 |
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Average yearly return |
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Monthly return |
61.04% |
-50.54% |
85.58% |
81.18% |
-10.85% |
33.28% |
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Calculation of risk associated with the company |
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Standard deviation |
0.12479483 |
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Calculation of yearly return from Monthly returns |
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Monthly average retun of security |
0.51% |
0.51% |
-0.71% |
1.04% |
-0.23% |
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Number of days in a month |
12 |
12 |
12 |
12 |
12 |
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Formula |
(1+average return)^number of days -1 |
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Average yearly return |
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Monthly return |
6.32% |
6.24% |
-8.25% |
13.25% |
-2.77% |
2.96% |
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Calculation of risk associated with the company |
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Standard deviation |
0.033017796 |
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| Adj Close |
Return |
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| 5191.2 |
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Calculation of total risk (FMG) |
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| 4926.6 |
-5.10% |
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Comment |
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| 4802.6 |
-2.52% |
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Standard deviation |
12.48% |
STDEV of return |
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| 5052 |
5.19% |
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Variance |
1.557% |
Square of stdev |
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| 5135 |
1.64% |
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Annualized variance |
0.20375 |
(1+variance)^365 -1 |
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| 5218.9 |
1.63% |
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Annualized standard deviation |
0.45139 |
sqrt of annualized variance |
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| 5425.5 |
3.96% |
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| 5320.1 |
-1.94% |
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| 5352.2 |
0.60% |
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Calculation of total risk (AXJO) |
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| 5190 |
-3.03% |
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Comment |
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| 5404.8 |
4.14% |
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Standard deviation |
3.30% |
STDEV of return |
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| 5394.8 |
-0.19% |
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Variance |
0.109% |
Square of stdev |
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| 5489.1 |
1.75% |
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Annualized variance |
0.01316 |
(1+variance)^365 -1 |
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| 5492.5 |
0.06% |
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Annualized standard deviation |
0.11472 |
sqrt of annualized variance |
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| 5395.7 |
-1.76% |
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| 5632.9 |
4.40% |
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| 5625.9 |
-0.12% |
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| 5292.8 |
-5.92% |
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| 5526.6 |
4.42% |
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| 5313 |
-3.86% |
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| 5411 |
1.84% |
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| 5588.3 |
3.28% |
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| 5928.8 |
6.09% |
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| 5891.5 |
-0.63% |
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| 5790 |
-1.72% |
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| 5777.2 |
-0.22% |
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| 5459 |
-5.51% |
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| 5699.2 |
4.40% |
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| 5207 |
-8.64% |
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| 5021.6 |
-3.56% |
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| 5239.4 |
4.34% |
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| 5166.5 |
-1.39% |
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| 5295.9 |
2.50% |
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| 5005.5 |
-5.48% |
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| 4880.9 |
-2.49% |
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| 5082.8 |
4.14% |
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| 5252.2 |
3.33% |
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| 5378.6 |
2.41% |
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| 5233.4 |
-2.70% |
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| 5562.3 |
6.28% |
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| 5433 |
-2.32% |
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| 5435.9 |
0.05% |
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| 5317.7 |
-2.17% |
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| 5440.5 |
2.31% |
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| 5665.8 |
4.14% |
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| 5620.9 |
-0.79% |
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| 5712.2 |
1.62% |
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| 5864.9 |
2.67% |
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| 5924.1 |
1.01% |
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| 5724.6 |
-3.37% |
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| 5721.5 |
-0.05% |
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| 5720.6 |
-0.02% |
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| 5714.5 |
-0.11% |
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| 5681.6 |
-0.58% |
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| 5909 |
4.00% |
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| 5969.9 |
1.03% |
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| 6065.1 |
1.59% |
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| 6037.7 |
-0.45% |
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| 6016 |
-0.36% |
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| 5759.4 |
-4.27% |
1.47153772 |
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