Table of Contents
Analysis of the financial posture and annual reports. 3
Analysis of organized results and different perceptions. 8
In this task, I take the part of a speculator looking to put a measure of USD 50,000 in the capital of an open constrained organization. To sagaciously contribute, one needs to do an exhaustive relative investigation of the yearly reports, securities exchange execution, news, methods, vision of the organizations, and so forth to achieve a conclusion. I have taken up two organizations in the money related area – to be specific, Amlak Finance PJSC and Tamweel PJSC for this study. As of now, I am working in Dubai in the IT deals area and both these organizations are my clients and they are intensely putting resources into IT security. This is the purpose behind my uncommon enthusiasm toward researching these organizations (Woodford, 2010).
Importance of the Study
Both Amlak and Tamweel are heading money related associations in the UAE, particularly noticeable in property fund. There is a considerable measure of rivalry between these organizations furthermore they are both recorded in money markets (Connolly et al,. 2010). An alternate explanation behind my enthusiasm toward putting resources into these organizations is that the Dubai land business is as of now blasting. Individuals have begun to put vigorously in the properties division of Dubai and there is more request than supply. “Property costs in Dubai look set to climb somewhere around 5% and 10% one year from now, as per another report, as deferrals in lodging tasks implies repressed interest stays unfulfilled. Costs will top in the second a large portion of 2008. It will students to understand financial analysis. To the company it will help the organization to get the strengths and weakness of the organizations.
From my study, I have inevitably discovered that both Amlak Finance and Tamweel are running in benefit yet have their own preferences and detriments, I have chosen to part my speculation of USD 50,000 among both these organizations as I feel that this would decrease my danger in the meantime, boost my degree of profitability. I see that starting 2014, Tamweel is more guaranteeing than Amlak. Be that as it may, the business cost of Amlak’s shares is less expensive. Therefore, I have chosen to put USD 20,100 in Amlak Finance and USD 27,100 in Tamweel (Connolly et al,. 2010).
The objective of the Study
- The main objective is to evaluate the ratio analysis of the two companies to determine their success factors.
As a financial specialist, I have acquired the yearly reports of both Amlak Finance and Tamweel. They are publically accessible on the Internet. I might want to give a short on the Annual reports of both these organizations (Vogel, 2010).
Analysis of the financial posture and annual reports
Amlak Finance began its operations in 2003 and it has had a steady reputation of development and extension. Despite everything I recall that when I came to Dubai in 2012, they were a little association with around 70 workers and they had stand out office. They have been my clients for data security from that point forward. I have seen them become in the course of the most recent three years and now they have three work places in Dubai itself. Their staff quality has additionally expanded to 400 representatives. All these show a positive development of the association. With reference to the yearly report (Shaoul 2005), please find underneath a few screenshots that demonstrate the monetary record patterns, key degrees, resources and liabilities of Amlak Finance.
In the year 2014, we see that the there has been a critical development in Amlak nonetheless, in the meantime; there has likewise been an increment in the liabilities also. From, we see a 87.5% expansion in the benefits of the firm. Interestingly, demonstrates that the liabilities are additionally as high as the advantages (an increment of 87.5%) (Shaoul 2005). “In the year 2008, Amlak plans to attain a development of 70%. Amlak’s 2014 income was posted at AED 706 million, up 85% against 2013, with the organization’s essential line of business – i.e. – property money helping 65% of the aggregate income. In the mean time, the EPS saw an increment of 122%. There was additionally a general increment of 77% in the organization’s general volume of business.” In short, the organization is hinting at positive development – both as far as the size and number of representatives and as far as the terrible turn over. It’s imparts are performing great, and the general business sector criticism is great. Amlak has driven arrangements for development. It has gone into a joint wander in Saudi Arabia with Al Baraka Banking Group, Saudi Investment gathering Bank and Aseer bunch. In 2008, Amlak arrangements to open operations in Jordan, Qatar and Bahrain. They have likewise begun to rebuild their inner operations and to re-building of administration therefore enhancing center of every office. They have likewise marked a MOU with International Finance Corporation (IFC).
Tamweel was made in 2011 and like Amlak it has likewise hinted at noteworthy positive development. Tamweel is likewise our client regarding the matter of Information Security and in the UAE market Tamweel is the boss contender to Amlak Finance in terms of property account. This is one of the purposes behind my enthusiasm toward looking at the execution of Amlak money and Tamweel. The third organization that has as of late entered the race is Dubai First, then again, it has quite recently begun up. There are no different firms in the same alliance as Amlak and Tamweel. The yearly report of Tamweel is likewise publically accessible on the web.
Tamweel has reliably hinted at positive development year on year. The net benefit of Tamweel in the year 2014 was AED 451 million while in 2013 it was AED 153 million, we see that there has been an increment of 175% in net benefit. This has likewise been said by the executive of Tamweel – Sheik Khaled Bin Zayed Bin Saqr Al Nehayan in the Annual report 2014 of Tamweel. We additionally see an increment of 125.5% in the EPS (Earnings every offer). The EPS for Tamweel was AED 0.2 in 2013 and in 2014, it rose to AED 0.451 – This is altogether higher than Amlak. People in general responsibility for is 55%. The screenshot underneath demonstrates the asset report and the money stream articulation of Tamweel for the years 2013 and 2014.
We see that there is an increment of approx 161% in the advantages of the firm (From 3.26 Billion to 8.51 Billion AED). The advancement of the organization is clear as the staff quality of Tamweel expanded from 130 workers to 250 representatives (Approx 72% development) amid the 2013 – 2014 period. In the meantime, there has been a significant 3 fold increment of approx 348% in the liabilities and values of the organization. The shares of Tamweel are performing admirably in the stock exchange furthermore the general business sector input about the organization is sure. Different accomplishments of Tamweel incorporate winning a few recompenses, for example, “Best Islamic Home Finance Product” – from Banker Middle East and being recorded among the “50 most appreciated organizations” in the Gulf by Arabian Business magazine
Tamweel has confidence in concentrating on the ability advancement of its workers and staff. They contribute vigorously on preparing and advancement of their representatives. They likewise concentrate much on IT and improvement of methods, for example, credit hazard administration framework to improve their execution. Not at all like Amlak, Tamweel does not have operations outside the UAE right now. Notwithstanding, year 2008 is seen as the year to begin development to other inlet nations. They likewise want to attain Emiratisation in abundance of 30% by 2014. Tamweel likewise expects to concentrate on brand building exercises and attain further development by concentrating on bringing out new items, uncommon client administration and remarkable advancements.”
In view of the yearly reports got, I have utilized ratio investigation to get more perceivability and to contribute sagaciously. Displaying data in ratio structure is more significant than communicating it in total terms particularly regarding choice making like choosing what amount & where to contribute. Degree investigation helps us comprehend and examine the budgetary proclamations of organizations. “Money related degree investigation is the computation and correlation of ratios which are gotten from the data in an organization’s monetary explanations. The level and recorded patterns of these degrees can be utilized to make surmizing around an organization’s money related condition, its operations and engaging quality as a speculation.” In short, monetary ratios toss light upon the budgetary examination and control. Asset report ratios demonstrate the money related position of the organization and the degrees identified with pay proclamation tosses light upon the monetary execution of the organization.
EPS * P/E = Market Price of Share
Profit Per Share (EPS) = Net Income (PAT)/ No. of Outstanding Shares Here Net wage is the pay accessible to value offer holders. This is only (Profit after assessment – benefit given to special offer holders) Value Earning Ratio (P/E numerous) = Market cost of Share/ EPS Weighted normal number of shares in 2014 = 1,500,000,000
Weighted normal number of Shares in 2013 = 1,500,000,000
Net Income(profit after Tax) for 2014 = AED 3,01,212,000
Net Income(profit after Tax) for 2013 = AED 1,27,423,000
EPS in 2014 = (301,212,000/ 1,500,000,000) = AED 0.200808 = AED 0.2 Approx EPS in 2013 = (127,423,000/ 1,500,000,000) = AED 0.086282 = AED 0.07
Approx This is a positive sign.
From the yearly report, we see that the estimation of each one offer was AED 1 in both 2013 and 2014. The business cost for offer was not specified as it varies now and again. “However from the Internet we comprehend that:
P/E ratio for 2013 = 52.7
P/E ratio for 2014 = 22.7”
Henceforth we can compute the business sector cost of offer = EPS * P/E various For 2013, the Market cost = 0.07*52.7 = AED 4.76
At 2014, the Market Cost = 0.2*22.7 = AED 4.58
We realize that the higher the EPS, the higher is the benefit of the organization. For existing offer holders higher the p/e ratio is ideal, on the other hand, for those wanting to contribute, a lower p/e degree is best as we can buy more imparts. In short, these figures demonstrate that Amlak is a decent prospect for speculation. On page 40 of the yearly report, we see that the proposed profit every offer is AED 0.10 Dividend pay-out degree = DPS/ EPS = 0.10/0.2 = 0.5 (for 2014)
Profit yield = DPS/Market Price of Share = 0.1/ 4.58 = 0.0218 => 2.18% (for 2014) we realize that the higher the Dividend Yield and the Dividend Payout degree, the more best it is for the financial specialist. We realize that the profit for resources is 4.17% in 2014 and it saw an increment from 2.72% in 2013.
The net overall revenue is given to be 42.87% for 2014 up from 34.33% in 2013 we realize that ROA = Net Profit Margin
Average Asset Turnover
Average Asset Turnover for 2014= 4.17/42.87 = 0.077
Average Asset Turnover for 2013 = 2.72/34.33 = 0.077
We realize that the bigger the normal resource turnover, the better it is so this is a positive sign.
Productivity Ratio = working cost/ net income.
GP Margin Ratio = Gross Profit/ Net Sales (Net deals = Total Sales – Excise Duty) NP Margin Ratio = Net Profit/ Net Sales. It is given to be 20.55% in 2014 as against 22.82% in 2013. In short, it demonstrates Amlak to be gainful.
On sheet 25 of Tamweel’s yearly report 2014, we see that weighted normal number of shares in 2014 = 1,000,000,000. Weighted normal number of Shares in 2013 = 767,452,055
Net Income(profit net of executive’s compensation) for 2014 = AED 447,187,000 Net Income(profit net of chief’s compensation) for 2013 = AED 850,776,000 EPS in 2014 = (447,187,000/ 1,000,000,000) = AED 0.447 = AED 0.45 Approx EPS in 2013 = (850,776,000/ 767,452,055) = AED 1.1 Approx
We see that the EPS has descended. This is a negative sign. Be that as it may, the executive says that the pay from IPO Proceedings was 677 Million (Page5 of yearly report). In the event that we prohibit this, the EPS in 2013 was 0.2. Consequently we see that Tamweel has fared well in 2014. There is certain development. “From the Internet we comprehend
P/E ratio for 2014 = 14.6
P/E ratio for 2013 = 7.7”
Henceforth we can figure the business cost of offer = EPS * P/E various For 2014, the Market cost = 0.45*14.6 = AED 6.57. At 2013, The Market Cost = 0.20*7.7 = AED 1.54
We realize that the higher the EPS and P/E degree, the better it is for the shareholders. The cost of the offer has likewise gone up and this implies that alternate financial specialists are expecting positive development. Be that as it may, this additionally implies that as another speculator I need to contribute more to buy the shares of Tamweel as contrasted with Amlak. On page 28 under “Proposed Dividends” of the yearly report, we see that the proposed profit every offer is AED 0.218 Dividend pay-out degree = DPS/ EPS = 0.218/0.45 = 0.484 (for 2014) Dividend yield = DPS/Market Price of Share = 0.218/ 6.57 = 0.0331 => 3.31% (for 2014) Hence Tamweel scores over Amlak (which has a profit yield of 2.18%). From charts on (Screenshot), we realize that the profit for resources (ROA) was 7.66% as contrasted with 6.30% in 2013. Again Tamweel scores over Amlak. The Return on Equity (ROE) has likewise expanded from 13.12% in 2013 to 23.35% in 2014. The networking benefit has additionally expanded from AED 152,771,000 in 2013 to 451,237,000 in 2014 up by 175.36% in 2013. This is a brilliant sign.
Analysis of organized results and different perceptions
The ratios show that both the organizations are doing admirably and in examination, Tamweel is performing superior to Amlak as the PE ratio is bring down, the EPS, Return on Assets, Return on Equity and general benefit and overall revenue is higher. The overall revenue of Tamweel in 2013 is contorted in light of the arrival of IPO. Nonetheless, we should likewise remember that the expense of shares of Tamweel is higher than that of Amlak (Tamweel is at AED 6.5 and Amlak is at AED 4.58) this is agreeable to Amlak. The quantity of offer of Amlak is consistent at 1.5 billion, though the quantity of shares of Tamweel is at 1 billion yet expanding (Johnson et al,. 2005).
It is astute; I accept to put resources into both these organizations as every one of them is performing admirably. It is more secure to part the speculation as there is lesser danger included. In any case, I would put more in Tamweel than with Amlak as the offer execution capability of Tamweel is more. I would buy USD 27,700 value of shares of Tamweel (@ AED 6.5/offer) and USD 20,100 value of shares of Amlak (@ AED 5.0/offer). This would intimate that I would get 16,728 offer of Tamweel and 14,773 shares of Amlak. In this way I can have the greatest number of shares (31,721) part over two benefit making organizations with negligible danger and with most extreme possibility of ROI.
Revsine, L., Collins, D. W., Johnson, W. B., Collins, D. W., & Johnson, W. B. (2005). Financial reporting & analysis. New York, NY: Pearson/Prentice Hall.
Shaoul, J. (2005). A critical financial analysis of the Private Finance Initiative: selecting a financing method or allocating economic wealth?. Critical Perspectives on Accounting, 16(4), 441-471.
Vogel, H. L. (2010). Entertainment industry economics: A guide for financial analysis. Cambridge University Press.
Wallentin, L., Yusuf, S., Ezekowitz, M. D., Alings, M., Flather, M., Franzosi, M. G., … & Connolly, S. J. (2010). Efficacy and safety of dabigatran compared with warfarin at different levels of international normalised ratio control for stroke prevention in atrial fibrillation: an analysis of the RE-LY trial. The Lancet,376(9745), 975-983.
Woodford, M. (2010). Financial intermediation and macroeconomic analysis.The Journal of Economic Perspectives, 21-44.
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