Factors Influencing Manhattan Corp Share Price And Financial Analysis

Brief description of the company

The learnings of the study have considered the essential activities of the operating market. The application of the financial tools in the report are evident with the evaluation of key ratio taken from ASX website. The study further discusses on the evaluation of WACC and rate of return as per the stock price. The latter part of the report has discussed on the amendments on gearing ratio and maintenance of a preferred optimal capital structure.

Manhattan Corporation Limited is identified as the flagship Ponton uranium project which is approximately located 200 Km northeast of Kalgoorie on the edge of the Great Victoria Desert in WA. The company is seen to be having 100% control for the exploration tenement underlaid by the tertiary palaeochannels within the Gunbarrel Basin. These are considered as palaeochannels, which hosts several uranium deposits and drilled uranium. The Mineral resource estimate of the company is based on the “Manhattan’s air core” and “sonic drilling” of over 788 holes for 55,553 metres of drilling along the palaeochannels immediately to the north of QVSNR from 2009 to 2016 (Manhattancorp.com.au. 2018).

The highest substantial security holder of the company is understood with Alan J Eggers and Associates with 23.74%. “Minvest Securities (New Zealand) Limited” is identified as one of the substantial shareholders of the company with 17.05%. Some of the other substantial shareholders has been depicted with “Nicholas P S Olissoff” with 7.97%, CQS Asset Management Limited with 5.55%, and “HSBC Custody Nominees (Australia) Limited” with 5.69%.

Alan Eggers is identified as the executive chairman of the company. Alan Eggers is a professional geologist and an executive director of Manhattan Corporation Limited. Alan J Eggers and Associates is seen to hold 23.74% share capital and he also directly related to the frim governance. Some of the other important non-executive directors include Marcello Cardaci, John A G Seton and John G Ribbons B.Bus.

 Solvency Ratio Analysis: –

“(EBIT/ TA) x (NPAT/EBIT) x (TA/OE) = (NPAT)/(OE)”

“(EBIT/ TA) x (NPAT/EBIT) x (TA/OE) = EBIT x NPAT/EBIT x 1/OE”

“EBIT x (NPAT/EBIT) x (1/OE) = (NPAT)/(OE)”

ROE is conducive to the investors in identifying the investment and income. ROA is defined as the measurement of how the investors are able to measure resources required to generate higher share of income. A greater portion of the assets in compare to the equity of the shareholder’s equity signifies the extent to which the company uses the debt leverage required for the capital structure.

Ownership-governance structure

 ROA of the company is identified with reducing trend in compared to ROE, this shows the company has a considerable portion in the debt. Both ROE and ROA is not seen to be in favour of Manhattan Corporation Limited.

The depictions made as per the price index, the stock price of Manhattan Corporation Limited is depicted to be highly volatile. This is considered with the data available in the last two years.

The company has been able to make significant nature of the publications which is based on Commodity Prices and Uranium, World Nuclear Power Developments, amendments on cost competitive nuclear power and Record Nuclear New Build Underway in China. The global capacity is likely to increase the primary mine production by 83%.

The beta value is computed with the covariance of Percentage monthly change of stock prices of Manhattan Corporation Limited and ^AORD index. This value is further divided with Percentage monthly change of stock prices of ^AORD index. The beta value of the company is depicted with a negative value of -2.578.

As per the depiction of the Beta of the security and rate of return, the investment in the security moves in the opposite direction to the stock exchange. It needs to be further noted that when there is rise in the market the investment will be low. Similarly, with a fall in the market the investment in Manhattan Corporation will rise. The investors need to be particularly cautious before investing any major amount of money in the securities of the company.

Management’s evaluation of WACC

The management’s evaluation of WACC shows that there is there is significantly low risk associated to the operations of the firm. The investors don’t need additional return for considering the additional risk. This also signifies that the firm has scope of proceeding with optimal capital structure.

There have been no significant amendments made on the gearing ratio. Manhattan’s total borrowing has increased from $ 34338 to $ 77107.

The company provides the options over the shares however they are not seen to carry any dividend in 2017.

Dear XYZ,

NSW

Australia

Dear Sir/Madam,

Manhattan is delighted to recommend on the evaluation of the financial information in the last four years. It is observed that there is a significant scope of the improvement for the rate of return as per the stock price.  It is discerned that there is considerable improvement in the rate of return from the stock price. The company strives to reduce the overall obligations with the borrowings. Manhattan has depicted significant scope of improvement in terms of WACC and reducing the cost of operations. There have been significant initiatives taken by the company is terms of the company has been able to make significant nature of the publications which is based on Commodity Prices and Uranium, World Nuclear Power Developments, amendments on cost competitive nuclear power and Record Nuclear New Build Underway in China. The global capacity is likely to increase the primary mine production by 83%.

With Regards

Conclusion

The different finding of the financial analysis of the company is depicted with a downward trend in terms of profitability ratio and solvency ratios. As per the depictions of the share price movements and computation of the rate of return, it is observed that the shares of the company are highly volatile and the investors may not be willing to invest in such stocks.

References

Arzova, B., Sisman, F.A. and Yozgat, U., 2016, January. EVALUATION OF FINANCIAL FAIR PLAY’S CRITERIA IN THE LIGHT OF PRINCIPLES OF INSTITUTIONALIZATION: ANALYSING OF 4 GRAND FOOTBALL TEAM QUOTED ON ISTANBUL STOCK EXCHANGE BY THE METHOD OF FINANCIAL ANALYSIS. In Global Conference on Business & Finance Proceedings (Vol. 11, No. 1, p. 83). Institute for Business & Finance Research.

Chu, P.L., Vanderghem, C., MacLean, H.L. and Saville, B.A., 2017. Financial analysis and risk assessment of hydroprocessed renewable jet fuel production from camelina, carinata and used cooking oil. Applied energy, 198, pp.401-409.

Cucchiella, F., D’Adamo, I. and Gastaldi, M., 2015. Financial analysis for investment and policy decisions in the renewable energy sector. Clean Technologies and Environmental Policy, 17(4), pp.887-904.

Manhattancorp.com.au. (2018). Manhattan Corporation Limited » Corporate » Corporate Overview . [online] Available at: https://manhattancorp.com.au/corporate/overview [Accessed 27 Jan. 2018].

Mayes, T.R., 2014. Financial Analysis with Microsoft Excel. Nelson Education.

Riley, E.B., Fieldston, E.S., Xanthopoulos, M.S., Beck, S.E., Menello, M.K., Matthews, E. and Marcus, C.L., 2017. Financial analysis of an intensive pediatric continuous positive airway pressure program. Sleep, 40(2).

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Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis. Cambridge University Press.

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