Adelaide Resources Limited
Provide an executive summary of your company’s background relating to business structure,operations, services and all other business activities that are conducted, etc?
Answer:
Background of the company:
The company chosen for review is Adelaide Resources Limited. It is an Australian listed public company with the code of AND. The company is concerned with the focussing on the mineral exploration for gold and the deposits of copper. The Adelaide resources currently have around 16 exploration licenses that covers around 5,329 km² within South Australia, the Northern Territory and Queensland.
(Adelaide resources, 2015)
The report aims at reporting the figures of the year 2014 financial report along with that of the previous year and the changes in %.
Balance sheet of the company:
a. The total current assets of the company were $1,595,592.
b. The total non-current assets of the company were $10,748,486.
c. The total current liabilities of the company were $233,954.
d. The total non-current liabilities of the company were $ 318,719
e. The total stockholder’s equity of the company were $11,791,405.
The following table shows the changes in the previous years:
|
(Amounts in $) | |||
|
Particulars |
2014 |
2013 |
% change |
|
Current assets |
15,95,592.00 |
28,42,841.00 |
-43.87% |
|
Non-current assets |
107,48,486.00 |
143,11,765.00 |
-24.90% |
|
Current liabilities |
2,33,954.00 |
3,80,379.00 |
-38.49% |
|
Non-current liabilities |
3,18,719.00 |
1,35,111.00 |
135.89% |
|
Stockholder's equity |
117,91,405.00 |
166,39,116.00 |
-29.13% |
The changes in the figures are adverse since the current assets have fallen along with the non-current assets. Further, the current liabilities have also fallen but the non-current liabilities have risen.
The equity of the stockholders have increased.
Income statement of the company:
a. The total operating revenues of the company were $96,474.
b. The cost of goods sold of the company were $0.
c. The total expenses of the company were $6,563,900.
d. The total non-operating gains and losses of the company were $250.
e. The earning per share of the company were $(2.96).
The following table shows the changes in the previous years:
|
(Amounts in $) | |||
|
Particulars |
2014 |
2013 |
% change |
|
Operating revenues |
96,474.00 |
1,22,941.00 |
-21.53% |
|
Cost of goods sold |
- |
- | |
|
Total expenses |
65,63,900.00 |
62,65,998.00 |
4.75% |
|
Non-operating gains and losses |
0 |
0 |
0 |
|
Earnings per share |
-2.96 |
-3.63 |
-18.46% |
The changes in the operating revenues are negative. The total amount of expenses have increased, this is not justified since the operating revenues of the company have decreased.
Statement of cash flows:
- The cash flows from the operating activities of the company were $(1,064,574)
- The cash flows from the investing activities of the company were $(1,996,273)
- The cash flows from the financing activities of the company were $1665, 551.
- The net inflow of cash of the company were $(1,395,296).
The following table shows the changes in the statement of cash flows:
|
(Amounts in $) | ||||
|
Particulars |
2014 |
2013 |
% change | |
|
Cash flow from operating activities |
-10,64,574.00 |
-9,64,979.00 |
10.32% | |
|
Cash flows from investing activities |
-19,96,273.00 |
-20,83,750.00 |
-4.20% | |
|
Cash flows from financing activities |
16,65,551.00 |
29,04,948.00 |
-42.67% | |
|
Net inflow of cash |
-13,95,296.00 |
-1,43,781.00 |
870.43% | |
The changes in the cash flows are all adverse which is not a good indicator.
Stock holder’s equity:
The following is the required table:
|
(Amounts in $) | ||||
|
Particulars |
2014 |
2013 |
% change | |
|
Issued capital |
340,58,144.00 |
322,59,378.00 |
5.58% | |
|
Reserves |
15,12,703.00 |
14,74,726.00 |
2.58% | |
|
Accumulated losses |
-237,79,442.00 |
-170,94,988.00 |
39.10% | |
|
Number of shares |
2290,79,813.00 |
2051,55,610.00 |
11.66% | |
The issued capital has increased and so does the reserves. The accumulated losses have also increased.
(Adelaied, 2015)
Conclusion:
From the analysis of the above, it would be not be recommendable to invest in such a company, if the point of view of an investor is taken.
The company must undertake the steps through which the company could be made profitable. The following are some of the strategies:
- Increase the productivity
- Development of the new lines of products
- Targeting new customers
- Find new markets
- Offer discounts
- Retail displays
The following are the ways of decreasing the costs:
- Controlling the stocks
- Decrease the amounts of the direct costs
- Decrease the amounts of indirect costs
- Benchmark the financial figures
- Decrease the amounts of overheads
(Business.qld.gov.au, 2015)
References:
Adelaideresources.com.au, (2015). Adelaide Resources Limited. [Online] Available at: https://www.adelaideresources.com.au/ [Accessed 26 Jan. 2015].
www.adelaideresources.com.au, (2015). Annual report 2014. [Online] Available at: https://www.adelaideresources.com.au/ann_reports/AdelaideResources2014AR.pdf [Accessed 26 Jan. 2015].
Business.qld.gov.au, (2015). Strategies to improve profit | Queensland Government. [Online] Available at: https://www.business.qld.gov.au/business/running/making-and-managing-money/making-your-business-more-profitable/strategies-to-improve-profit [Accessed 26 Jan. 2015].
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