Ratio Analysis

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EXECUTIVE SUMMARY

The purpose of writing this report is to analyse and to compare relevance of data of the ARI (ARRIUM LIMITED) with the context of various financial ratios and to give suitable recommendation to potential new investor UNO Super fund Management. Discussion of the topic starts with the core business of the company with the all financial background. The report also summarise the way the fund generated by the company and the capital investment by the company. The nucleus of the report analyse the various financial ratio to determine the liquidity of company.

TABLE OF CONTENT

1. Arrium Limited- Management Summary ................................................ 3 2. Management Report Review .................................................................. 6 3. Sustainability Report ................................................................................7 4. Financial Ratio Analysis ..........................................................................9 5. Recommendation .....................................................................................16 6. References ..............................................................................................17

Arrium Limited- Management Summary

Arrium Limited was established as OneSteel Limited in 2000 as subsidiary from BHP.At the inception OneSteel was predominately domestic steel manufacturer and distributor through Australia. Since then the company has gone the long way becoming the leading mining and material corporation delivering consistently superior return to its investors. In a short span Arrium has established itself as one of the largest resource based corporation in Australia by implementing the strategy such as continuous expansion in to non-ferrous resources and discovery of new mining projects geographically as well as reinvesting capital in to sustainable growth opportunities. The core business of

Arrium Limited can be divided in to following segments.

➢ Arrium Mining
The mining division was formed in 2007 after the commercialisation of Hematite Iron Ore Reserve. Arrium Mining has two mining operations Middleback Ranges and Southern Iron

Middleback Ranges –The operation here includes three mining regions with multiple pits like Iron Duchess, Iron Knight, Iron Duke, Iron Magnet, Iron Baron and Iron Chieftain. As per the reserve report of 2011 this site still has following reserve. • 43.6mt Reserve @ 60.5% Fe

• 148mt total Resource @ 58.9% Fe
• 77mt Magnetite Reserve @ 40.8%
• 234 magnetite Resource @ 38.7% Fe

Arrium Mining also owns private rail network which enables this site to transport iron ore to nearby port The Whyalla, also owned and operated by Arrium Mining.

Southern Iron - The business is the result of acquisition from WPG Resources limited in 2011. The main asset of the division includes the Peculiar Knob high grade DSO hematite project that is under development, as well as the Buzzard and Tui DSO hematite and magnetite deposits at Hawks Nest, and other exploration tenements all located in South Australia. As per reserve report of Arrium the Southern Iron division has following reserve • 29.5mt Reserve @ 61.7% Fe

• (Peculiar Knob 16.2 mt Reserve @63% Fe)
• 569mt Magnetite Resource @ 35% Fe

Apart from the iron ore drilling Arrium mining is also optimistic towards non ferrous elements such as copper, gold and uranium which will also contribute towards future growth of business.

➢ Arrium Mining Consumables

The another division is known as Arrium Mining Consumables which supplies the critical products to mineral processor .The core operation can be divided as per follows.

Grinding Media – Moly-Cop is world’s leading manufacturer of still grinding balls and rods. It has manufacturing facilities thought the world which has been strategically designed to ensure smooth...
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