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Technology One-Analyst

1846 Words8 Pages

TECHNOLOGY ONE-Analyst Report By, Akash Karunakaran(GSEP14IT47) About Technology One: Technology One is the largest software company in Australia with its global operations spread across 6 countries. It develops software that are known for its user friendly interface. It currently has around 12 products and few in pipeline, which caters 7 industry segments like government, utilities, health and community services, financial services, education, managed services. It is constantly increasing its customer base and boasts for over 1000 clients over these industries. (Technology One, n.d.) Financial Statements Analysis Income Statement Analysis The company has shown an increase in revenue by 8% out of which the main contribution is from initial …show more content…

The R&D expenses has increased from 145.5 to 154.9 million but , expense as a percentage of revenue has decreased from 20% to 19% which is still on the higher side compared to industry standard of 12%.New products like technology one cloud 4.0 and Ci Anywhere were launched and was well received by the market. Almost all the components of the operating cost have significantly increased, which can be attributed with the increase in revenue, as cost is directly related to sales. But from the income statement it’s visible that Depreciation and Amortisation has decreased from 5.4 to 4.7 million, this can be directly related to the decreased in PPE and intangible asset represented in the balance sheet. Balance Sheet Analysis Looking in to the balance sheet its evident that the cash and cash equivalent under current asset has increased from 65.4m to 80.2m, i.e. 23% YOY growth which is a very good indicator as the sales has tremendously increased for technology …show more content…

2014 2013 YOY growth profit margin 15.9% 14.9% 6.21% ROE 53.6% 48.6% 10.24% EPS 10.06 cents 8.8 cents 14.32% receivable turnover 6.326157 5.91927 6.87% current ratio 3.141504 2.621937 19.82% Current ratio: it’s the ratio between the current assets and the current liabilities. For technology one current ratio is 3.14 which indicates that the company is very safe and will be able to pay its immediate liabilities easily in case of any future issues. Also the current ratio is greater than the average industry current ratio of 2.84. (CSI market, n.d.) Receivable turnover ratio: ratio between net income and receivables. It is about 6.32 in 2014 which indicates that roughly the company receives the credit money every two months. Also the company is at par with the industry average standard of 6. The above two ratios clearly signifies that Technology One has a high liquidity and is a safe investment. Ratio 2014 2013 Debt/asset 31% 36% Debt/equity 45% 57% Both Debt to asset and Debit to equity ratios have decreased this year which clearly indicates that the company has a less risky capital structure and is lowering its risk of solvency.

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