Company Analysis: Financial Strength Of Kennedy-Wilson Holdings Inc. (Research Paper Sample)
Company Analysis paper: Using the accounting and analytical tools presented in this class, each student will prepare an analysis of a public company (a company traded on either the NYSE or NASDAQ Exchanges).
The conclusion of the Company Analysis paper MUST INCLUDE whether you (not a rating agency, not a brokerage firm, not any other entity), but will you
- Buy the Company’s bonds in the medium to long term (5 to 10 years). If the Company does not issue bonds, would you buy the Company’s bonds if they did issue bonds?
- Buy the Company’s common stock in the medium to long-term (5 to 10 years)
Approaches to the analysis should include:
- Brief history of the company
- Current state of the financial health of the company
- Trends in the financial health over recent years and potentially into the future
- Comparison of the subject company with one othercompetitor and, perhaps, its industry sector
Company Analysis: Kennedy-Wilson Holdings Inc.
Company Analysis: Kennedy-Wilson Holdings Inc.
The real estate industry in the U.S generates revenues of the tune of billions annually. Entrepreneurs in this industry make a lot of profits. The purpose of this report is to examine Kennedy-Williams Holdings to determine how it performs in the real estate industry including its financial health. The task was achieved through looking at financials of the company. The results of the analysis show that the company is becoming more profitable with each year but their liquidity is increasingly low. The company should ensure that they lower their debt to equity ratio to make them look less riskier to investors.
Kennedy-Wilson Holdings Inc.
Kennedy-Wilson Holdings company was founded in the year 1997 as a “real estate auction” company in the United States. Come the year 1988, William McMorrow and his partners purchased the company. During this period, the company had approximately eleven employees who were all located in a single office. It was also during this period that auction marketing evolved in a globally recognized business that was characterized by “high-end” property sales. In the year 1992, the company went public on Nasdaq and by the year 1993, the company made its firms commercial acquisition when it bought 520 Broadway that was located in Santa Monica, California. The company started expanding to other parts of the globe by the year 1994 and they opened their first office in Japan. Kennedy-Wilson acquired Heitman Properties Limited in the year 1998. In the same year, the company acquired Kawasaki Tech Center thereby launching their acquisition platform. The company then went ahead to launch their “fund management” business in the year 2000.the company went private in the year 20004 and then went public in the year 2009 on New-York Stock Exchange. The company expanded their reach in Europe in the year 2012 by acquiring “real estate investment management” of the Bank of Ireland. The company has since gone ahead to expand their reach in Europe. Much of the revenue that the company generates is from rental income.
The Company's Current Financial Strength
The financial strength of a company is vital to the owners, lenders, corporate managers, and investors. Businesses need to be operating efficiently within manageable costs. Understanding the financial strength of a company requires knowing the profitability and liquidity.
Profitability ratios are used to determine the ability of a firm to generate profits at give investment levels (Lesakova, 2007). A company that is never profitable faces the risk of liquidation. Return on assets shows how profitable a company is with respect to the assets it has (Lesakova, 2007). As of 31st December, 2017, the company's return on assets stood at 1.31 (Morningstar.com, 2018). The implication is that for every dollar that was invested in the assets during the period, a return of $1.31 of net income was realized. This is a positive sign and shows that the company is using its assets well to realize profits. Return on equity determines how much capable a firm is in generating profits from the investments by the shareholders (Lesakova, 2007). The companies ROE stood at 8.33% (Morningstar.com, 2018). This was a positive sign showing that the company is giving investors returns.
Liquidity rations are used to show how a company uses the resources at its disposal to meet its short-term financial obligations (Breuer et al., 2012). Current ratio (current assets/current liabilities) and debt to equity ratio (total debt/total equit...
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