Table 01 Liquidity Ratios

Short-Term Solvency OR Liquidity

Ratios

2012

2013

Current Ratio
Quick Ratio
Cash Flow from Operations to Current
Liabilities

1.88
1.18
0.965

1.85
1.20
1.076

Efficiency Ratios

2012

2013

Debtors Turnover
Average Days Sale Uncollected
Inventory Turnover
Inventory Turnover in Days

6.955
52.48
9.457
38.595

6.965
52.40
9.646
37.839

Industry
Avg.

Table 02 Efficiency Ratios

Industry
Avg.

Table 03 Profitability Ratios

Profitability Ratios

2012

2013

Net Profit Margin

Interest Cost as a Percentage of Sales
Asset Turnover
Return on Assets
Return on Ordinary Shareholders Equity

12.92
1.58
0.77

12.30
1.30
0.76

0.174

0.172

Long Term Solvency OR Financing

Ratios

2012

2013

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

0.75
0.376
12.03
0.307

0.68
0.350
14.03
0.397

Market Based Investment and Other

Ratios

2012

2013

Price/Earnings (P/E)
Dividend Yield
Dividend Cover
Net Tangible Asset Backing

130.00
5.288
1.454

154.85
5.313
1.215

Industry
Avg.

Table 04 Financing Ratios

Industry
Avg.

Table 05 Market Ratios

Industry
Avg.

Evaluation

1.Short Term Solvency or Liquidity Ratios

Liquidity ratios show the ability of a company to pay of its debts in a particular period of time.
Liquidity ratios have current ratio and quick ratio. Current ratio is help company to see their able
to pay their current debts without going against future earnings. In year 2012, Adelaide current
ratio 2012 is 1.88: 1 and year 2013 is 1.85:1. However, there is a slight decrease in the current
ratio for the year 2013. This is because as they have a major increase in the tax liabilities for the

year 2013. In 2013, Adelaide Brighton Ltd increased its cash reserves by 26.14%, or 2.30m.
The company earned 227.30m from its operations for a Cash Flow Margin of 18.51%. In
addition the company used 63.20m on investing activities and also paid 161.70m in financing
cash flows.
Quick ratio is show of the companys ability to make the payments on current obligation. Quick
ratio for Adelaide in year 2012 is 1.18:1 and year 2013 is 1.20:1. It shows that year 2013 ratio is
slightly increased. This is because during that period they paid off the borrowing and made it nil
for the year 2013. 2013 net profit after tax attributable to members of the
Company decreased 1.2% compared to the prior year to $151.1 million. Excluding a $7.6
million gain in 2012 from fair value accounting on an acquisition, net profit after tax (NPAT) was
$5.8 million (3.9%) higher than 2012. Revenue of $1,228.0 million increased by 3.8% due to
continued demand from project work in South Australia and the resources sector in Western
Australia and the Northern Territory and a recovery in residential construction in New South
Wales which offset lower demand in Victoria. Demand from the non-residential building sector
remain subdued, while residential building generally improved across the majority of markets in
the second half of the year.
Profit before tax increased 0.5% to $208.6 million. Net interest decreased by 3.4% to $14.1
million due to reduced borrowings and historically low interest rates that more than offset the
impact of a reduction in capitalized interest.
(http://www.adbri.com.au/pdfs/2014/ABL%202013%20Statutory%20Acs%20Final%20&
%20PWC%20Independece%20Cert%20&%20Audit%20Report%20Final.pdf)

2.

Efficiency Ratios
Efficiency has to do with the evaluation of the various ways in which companies manage their
assets. Financial analysts are always interested in evaluating the value of a companys assets
as well as the how the company manages these assets. There are many ratios that can be
used by financial analysts to evaluate the level of efficiency within a business (Wild, 2007). The
efficiency ratios analyzed in the above table for Adelaide Brighton for the year 2012 & 2013
depicts that the company is efficiently running. As we can see from the calculations there is a
need of minor improvement which helps in increase the level of efficiency like reviewing the
companys exposure to and management of slow paying debtors and bad debts needs to
improve on inventory turnover as it had a flat trend from 2008-2009. The above given ratio
performance in terms of efficiency had a slightly increasing trend for the year 2013 on both
debtors turnover and inventory turnover. This simply means that the company is working fine in
terms of efficiency but still some minor improvements as stated above needed on both the
areas to get the finest efficiency level. Debts need to be collected faster to ensure the liquidity.

3.Profitability Ratio
Profitability ratios use to show the company overall performance and give an indication for a
companys overall efficiency. According to the calculation of annual report, the Adelaide Brighton

net profit margin from year 2012 (12.92) to 2013 (12.30) decreases .62 percent. It indicates
Adelaide Brighton every year able to grown their revenues as companies like Adelaide Brighton
having a good profitability now can survive and operate well in the global market. Besides that,
the profitability of any company gives an investor a clear picture of companys performance and
to let the investor know how well the company is going to evolution. In case of Adelaide
Brighton, the decrease in the other income and share of net profits of joint ventures and
associate accounted for using the equity method slightly lowers the net profit of the company.
They need to concentrate properly on the other sources of income to get the good profitability
as the gross profit shows a slight increase in the year 2013. During the past 13 years,
Adelaide Brighton Limited's highest Return on Assets (ROA) was 11.28%.
The lowest was -4.86%. And the median was 8.44%. Adelaide Brighton return on assets
is ranked higher than 89% of the 773 companies in the global building material industry.
(http://www.gurufocus.com/term/ROA/ADBCF/Return%2Bon%2BAssets/Adelaide%2BBrighton
%2BLimited)

4.Long Term Solvency Ratios

The solvency ratio is the best measure to analysis the company performance in long run in
terms of its operating profit after taxes against all the liabilities after talking depreciation into
consideration. The Relation between debts to Equity in 2012 was .75, and become .68 in 2013,
showing an decrease, it is generally a positive indicator showing that the firm is decreasing their
borrowing and not more depending on external money lenders.
Total Assets Financed by Debts in 2012 was .376, and became .350 in 2013, showing a
decrease in debt to total assets, again a positive thing for a company as in this case a company
is not much dependent on debt for assets takeover.
Interest Coverage ratio Analysis in 2012 was 12.03, and become 14.03 in 2013, showing an
increase, a positive indicator since its above 1.
Cash Flow from Operations to Liabilities Ratio in 2010 was .307, it became .397 in 2011
showing an increase, and it generally means a positive thing for the companys long term
solvency.

In June 2013, Adelaide Brighton refinanced its existing bank debt facilities with three of
Australias major trading banks. The $500 million bank debt facilities effectively rollover and
replace all previously existing bank debt facilities. New facilities will reduce financing costs by
$1 million from 2015 compared to old facilities. The maturity profile of facilities is now:

http://www.adbri.com.au/pdfs/2013/June/ASX_June13_results_presentation_cover_sheet.pdf

5.Market Based Investment Ratio