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Aventine Renewable Energy Financial Analysis Presentation

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Team presentation: financial analysis of Aventine Renewable Energy. Financial ratio analysis by Laura Rogers. 2008

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Aventine Renewable Energy Financial Analysis Presentation

  1. 1. Aventine Renewable Energy, Inc. is a leading producer and marketer of ethanol and related by-products. Through our own production facilities, marketing alliances with other ethanol producers and our purchase and resale operations, we market and distribute ethanol to many of the leading energy companies in the U.S.<br /> <br />We are proud to be one of the leading innovators in the renewable energy field. The products we sell help reduce our country's dependence on foreign oil, benefit the environment by reducing pollutants and improve automobile performance by increasing octane.<br /> <br />
  2. 2. CorporateHierarchy<br />
  3. 3. Why does our corporation exist?<br /><ul><li>Emission reduction
  4. 4. Octane enhancer
  5. 5. Fuel stock extender
  6. 6. Growth in E85 usage</li></li></ul><li>Sources of Revenue:<br /><ul><li>Equity Ethanol Production
  7. 7. Marketing Alliance Production
  8. 8. Purchase/Resale
  9. 9. Bio-diesel
  10. 10. By-Products</li></li></ul><li>Financial Analysis<br />
  11. 11. Liquidity Ratios: A Closer Look <br /> Current Financials<br />AVR’s current assets are steadily increasing in relation to their current liabilities, contributing to our increasing levels of liquidity.<br />Debt and Equity<br />AVR’s debt and equity ratios show rapidly increasing assets and a growing preference for equity financing.<br />
  12. 12. Turnover Ratios: A Closer Look <br />Inventory<br />Aventine Renewable Energy’s turnover ratios show a definite strength in the rate of inventory turnover. Perhaps this is why they are a leader in the industry.<br />Receivables<br />Aventine Renewable Energy has a remarkably fast rate of receivables turnover. This keeps cash inflows coming but may deter customers.<br />
  13. 13. Profitability Ratios: A Closer Look <br />Cash Coverage<br />AVR’s cash coverage ratios show a good ability to cover interest payments.<br />Profitability<br />We will discuss profitability ratios on the next slide.<br />
  14. 14. Profitability Summary <br />Profit Margin<br />AVR’s profit margin has been decreasing but is still higher than the industry average. This reflects their superior ability to preserve sales revenues. <br />Return on Assets<br />AVR’s return on assets is decreasing and has remained lower than the industry average. This could reflect a poor investment strategy.<br />Return on Equity<br />AVR’s return on equity is decreasing but is still higher than the industry average. This shows that AVR is not using the money invested in it wisely to generate income. This is obviously a problem for the whole industry.<br />

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