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Abstract： Cavalier Corp is a vertically integrated group of companies which buy and scour wool， make yarn， and design and make produce broadloom carpet and carpet tiles. Meanwhile， this company is based in New Zealand and Australia with exports around the world. （This is an individual assignment and collusion， copying or plagiarism may result in disciplinary action.）
Key words： Cavalier Corp； Freightways
Introduction
In this assignment， we are going to talk about two companies and discuss whether the company is going to be choosen to be invested. I have already selected two companies which is Cavalier Corp and Freightways. Cavalier Corp is a vertically integrated group of companies which buy and scour wool， make yarn， and design and make produce broadloom carpet and carpet tiles. Meanwhile， this company is based in New Zealand and Australia with exports around the world.
Freightways is a express company which provide the service of package throughout New Zealand. The Group？蒺s origins date back to 1964 through New Zealand Couriers—a pioneer in the express package industry in New Zealand. Since the business of Freightways is running in Auckland， it is growing organically and becoming a leading New Zealand service provider， with representation in every major town and city throughout the country.
1.evaluating the financial performance
This is the profit of Cavalier Corp in four years.
These figures I get it from the annual report. From this form we can see that income statement is a company？蒺s financial performance that indicates how the revenue is transformed into the net income. The net profit in 2009 is 14，889，000， 11，369，000 in 2010， 18，180，000 in 2011 and loss 1，633，000 in 2012， and it is easy to see that we can not make profit in 2012 and loss 1，633，000. Maybe this company met economy crisis or something like that. In the recent year expect in 2012， the company make the profit continuously. It is a good reason for the investor to invest this company. But the company dose not make profit in 2012 which is a warning for the company.
Review the comment.
The Board Chairperson show that compared with the year 2011， in 2012 the company loss 1.6 million dollars at 30 June 2012. From 2010 to 2011， the net profit increases from 18，180，000 to 11，369，000. From 2009 to 2011 the net profit goes down from 14，889，000 to 11，369，000.
This form below shows the profit of Freightways in four years. A financial statement that measures a company？蒺s financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non？鄄operating activities. It also shows the net profit or loss incurred over a specific accounting period， typically over a fiscal quarter or year.
According to the form， we can see that the profit in 2009 is 34，593，000 and 23，164，000 in 2010 and 29，899，000 in 2011 and 37，005，000 in 2012. From 2009 to 2012， the profit dropped firstly and then increase to 37，005，000 which is more than the figure in 2009. So the company was getting more and more profit in the future. And the shareholder will get more benefits from the company. From the income statement of Freightways， it will attract more investors to invest this company.
Review the comment.
The chairman of Freightways report that compared with the year 2011 the profit increases from 29，899，000 to 37，005，000 in 2012.
Conclusion
Compared with the income statement of this two company. The profit of Freightways is more than Cavalier， and the ROA of Freightways is better than Cavalier. Because the Cavalier in 2012 is loss 1.6 million dollars， so the investors will prefer to invest in Freightways.
2.firm？蒺s historical performance over a number of years
This is the part of the cash flow of Cavalier
Cash inflows usually arise from one of three activities—financing， operations or investing. From the picture we can see that cash and cash equivalents at beginning of the period in 2012 is 1，302，000 dollars， and the amount at the end of the period is also 1，950，000 dollars. It means closing balance is more than opening balance. The cash flow is positive. But in 2011 the cash and cash equivalent at the beginning of the period is 2，737，000 dollars， and the amount at the end of this period is 1，302，000 dollars， that means opening balance is more than closing balance. So the cash flow in 2011 is negative. And in 2010 the opening balance is 3，518，000， and the closing balance is 2，737，000 which is less than opening balance so it is also negative. in 2009 the opening balance is less than closing balance. It means the cash flow in 2010 is positive.
According to the balance sheet of Cavalier， I am going to analysis the current ratio， quick ratio， working capital， and leverage ratio.
According to the working capital ratio， the 2009 working ratio was lower than any other years which means that Freightways has less capital to pay off its short-term liabilities in 2009. The 2009 current ratio is lower than the any other three years current ratio which shows that Freightways have as strong an ability to pay the short？鄄term obligations as in 2009. In the four years the current ratios are over 1， it would be able to pay off its obligations on their due day. 2012 quick ratio goes up from 2011 it has a stronger liquid asset to pay current liability. When Freightways had a low rate on debt ratio， it could get the finance from lenders easily. Leverage ratio in this four years are over 1， the company will hold more liabilities which is more risky in the long term business. This is the part of cash flow of Freightways
Cash flow analysis is a method of analyzing the financing， investing， and operating activities of a company. This is the annual report of cash flow of Freightways. From the cash flow statement we can see that the company of the cash and cash equivalent at the beginning year in 2012 is 4，325，000 dollars， and cash and cash equivalent at the end of year in 2012 is 9，130，000 dollars. So the closing balance is more than the opening balance. Therefore， it is a positive cash flow. Meanwhile， the company of cash f and cash equivalent at the beginning year in 2011 is 4，996，000 dollars， and at the end of year in 2011 is 4，325，000 dollars. It means the closing balance is less than the opening balance. Therefore， it is a negative cash flow. From the form it is easy to see that the cash flow in 2010 is negative and in 2009 is also negative. So this is a risk for the investor.
According to the working capital， 2009 has the highest figure in this four years， and followed by 2012， 2011 and 2010. The 2010 current ratio is lowest one which shows that Freightways does not have as strong an ability to pay the short？鄄term obligations as in other there years. When Freightways had a low rate on debt ratio， it could get the finance from lenders easily. All this four year the current ratio is over 1， the Freightways will hold too much liability which is risky in their long term business.
3.firm？蒺s dividend policy
From the annual report of this two companies， I can not find any information about the dividend policy. But I find some information about dividend policy on the official website. These are the information below：
Dividend policy of Cavalier：
Cavalier Corporation usually pays dividends three times a year as follows：
？誗 First interim announced at the Annual Meeting in early November and payable in early December.
？誗Second interim announced together with the half year result in mid February and payable in early March.
？誗Final dividend announced together with the annual result in late August and payable in early October.
The Company has established a dividend reinvestment plan under which shareholders may elect to reinvest the net proceeds of cash dividends to be paid or credited on some or all of their ordinary shares held in the Company from time to time towards acquiring further fully paid up ordinary shares in the Company.
The Directors may， in their sole discretion， at any time terminate， suspend or modify the plan. The terms and conditions of the plan can be viewed by downloading the Dividend Reinvestment Plan or obtained from the Company？蒺s share registrar， Computershare Investor Services Ltd， Private Bag 92119， Auckland 1142.
Shareholders who receive their dividends in cash have the option of having a dividend cheque mailed to them or having the payment directly credited to their nominated bank accounts in New Zealand. The Company strongly recommends that shareholders choose to have their dividend payments directly credited to their nominated bank accounts in New Zealand. To do this， shareholders should contact the Company？蒺s share registrar by phoning Computershare on 09 488 8777 or by visiting the Computershare website.
Dividend policy of Freightways：
The Company？蒺s dividend policy is to declare dividends at a rate of 75% of NPATA （net profit after tax and amortisation） in conjunction with the release of the half year and full year results. Payment of dividends is proposed to be in March and September each year.
The Directors reserve the right to amend the dividend policy at any time. Each dividend will be determined after due consideration of the capital requirements， operating performance， financial position and cash flows of the Company at the time.
4.Agency theory
Agency theory is a concept that explains why behavior or decisions vary when exhibited by members of a group. Specifically， it describes the relationship between one party， called the principal， that delegates work to another， called the agent. It explains their differences in behavior or decisions by noting that the two parties often have different goals and， independent of their respective goals， may have different attitudes toward risk. As a whole， from the cash flow and balance and income statement and dividend payment history， these are the important factor which to be considered whether or not should be invested in this two company. Compared with net income， the Freightways is more than Cavalier. In addition， the Cavalier does not make profit in 2012. On the contrary， it loss about 1.6 million dollars. so If the investor invest in Freightways， they will get stable profit， and even more than Cavalier.
Conclusion
To sum up， with lots of comparisons， the company of Freightways is the best choice to invest. The investor who will invest in this company will get higher return with lower risk.
Reference：
[1]Cavalier Corporation Ltd annual report （2012） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2012annualreport.pdf.
[2]Cavalier Corporation Ltd annual report （2011） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2011annualreportfinal.pdf.
[3]Cavalier Corporation Ltd annual report （2010） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2010annualreportfinal.pdf.
[4]Cavalier Corporation Ltd annual report （2009） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2009annualreportfinal.pdf.
[5]Cavalier Corporation Ltd （2012） Retrieved from http：//www.cavcorp.co.nz/dividendpolicy.
Key words： Cavalier Corp； Freightways
Introduction
In this assignment， we are going to talk about two companies and discuss whether the company is going to be choosen to be invested. I have already selected two companies which is Cavalier Corp and Freightways. Cavalier Corp is a vertically integrated group of companies which buy and scour wool， make yarn， and design and make produce broadloom carpet and carpet tiles. Meanwhile， this company is based in New Zealand and Australia with exports around the world.
Freightways is a express company which provide the service of package throughout New Zealand. The Group？蒺s origins date back to 1964 through New Zealand Couriers—a pioneer in the express package industry in New Zealand. Since the business of Freightways is running in Auckland， it is growing organically and becoming a leading New Zealand service provider， with representation in every major town and city throughout the country.
1.evaluating the financial performance
This is the profit of Cavalier Corp in four years.
These figures I get it from the annual report. From this form we can see that income statement is a company？蒺s financial performance that indicates how the revenue is transformed into the net income. The net profit in 2009 is 14，889，000， 11，369，000 in 2010， 18，180，000 in 2011 and loss 1，633，000 in 2012， and it is easy to see that we can not make profit in 2012 and loss 1，633，000. Maybe this company met economy crisis or something like that. In the recent year expect in 2012， the company make the profit continuously. It is a good reason for the investor to invest this company. But the company dose not make profit in 2012 which is a warning for the company.
Review the comment.
The Board Chairperson show that compared with the year 2011， in 2012 the company loss 1.6 million dollars at 30 June 2012. From 2010 to 2011， the net profit increases from 18，180，000 to 11，369，000. From 2009 to 2011 the net profit goes down from 14，889，000 to 11，369，000.
This form below shows the profit of Freightways in four years. A financial statement that measures a company？蒺s financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non？鄄operating activities. It also shows the net profit or loss incurred over a specific accounting period， typically over a fiscal quarter or year.
According to the form， we can see that the profit in 2009 is 34，593，000 and 23，164，000 in 2010 and 29，899，000 in 2011 and 37，005，000 in 2012. From 2009 to 2012， the profit dropped firstly and then increase to 37，005，000 which is more than the figure in 2009. So the company was getting more and more profit in the future. And the shareholder will get more benefits from the company. From the income statement of Freightways， it will attract more investors to invest this company.
Review the comment.
The chairman of Freightways report that compared with the year 2011 the profit increases from 29，899，000 to 37，005，000 in 2012.
Conclusion
Compared with the income statement of this two company. The profit of Freightways is more than Cavalier， and the ROA of Freightways is better than Cavalier. Because the Cavalier in 2012 is loss 1.6 million dollars， so the investors will prefer to invest in Freightways.
2.firm？蒺s historical performance over a number of years
This is the part of the cash flow of Cavalier
Cash inflows usually arise from one of three activities—financing， operations or investing. From the picture we can see that cash and cash equivalents at beginning of the period in 2012 is 1，302，000 dollars， and the amount at the end of the period is also 1，950，000 dollars. It means closing balance is more than opening balance. The cash flow is positive. But in 2011 the cash and cash equivalent at the beginning of the period is 2，737，000 dollars， and the amount at the end of this period is 1，302，000 dollars， that means opening balance is more than closing balance. So the cash flow in 2011 is negative. And in 2010 the opening balance is 3，518，000， and the closing balance is 2，737，000 which is less than opening balance so it is also negative. in 2009 the opening balance is less than closing balance. It means the cash flow in 2010 is positive.
According to the balance sheet of Cavalier， I am going to analysis the current ratio， quick ratio， working capital， and leverage ratio.
According to the working capital ratio， the 2009 working ratio was lower than any other years which means that Freightways has less capital to pay off its short-term liabilities in 2009. The 2009 current ratio is lower than the any other three years current ratio which shows that Freightways have as strong an ability to pay the short？鄄term obligations as in 2009. In the four years the current ratios are over 1， it would be able to pay off its obligations on their due day. 2012 quick ratio goes up from 2011 it has a stronger liquid asset to pay current liability. When Freightways had a low rate on debt ratio， it could get the finance from lenders easily. Leverage ratio in this four years are over 1， the company will hold more liabilities which is more risky in the long term business. This is the part of cash flow of Freightways
Cash flow analysis is a method of analyzing the financing， investing， and operating activities of a company. This is the annual report of cash flow of Freightways. From the cash flow statement we can see that the company of the cash and cash equivalent at the beginning year in 2012 is 4，325，000 dollars， and cash and cash equivalent at the end of year in 2012 is 9，130，000 dollars. So the closing balance is more than the opening balance. Therefore， it is a positive cash flow. Meanwhile， the company of cash f and cash equivalent at the beginning year in 2011 is 4，996，000 dollars， and at the end of year in 2011 is 4，325，000 dollars. It means the closing balance is less than the opening balance. Therefore， it is a negative cash flow. From the form it is easy to see that the cash flow in 2010 is negative and in 2009 is also negative. So this is a risk for the investor.
According to the working capital， 2009 has the highest figure in this four years， and followed by 2012， 2011 and 2010. The 2010 current ratio is lowest one which shows that Freightways does not have as strong an ability to pay the short？鄄term obligations as in other there years. When Freightways had a low rate on debt ratio， it could get the finance from lenders easily. All this four year the current ratio is over 1， the Freightways will hold too much liability which is risky in their long term business.
3.firm？蒺s dividend policy
From the annual report of this two companies， I can not find any information about the dividend policy. But I find some information about dividend policy on the official website. These are the information below：
Dividend policy of Cavalier：
Cavalier Corporation usually pays dividends three times a year as follows：
？誗 First interim announced at the Annual Meeting in early November and payable in early December.
？誗Second interim announced together with the half year result in mid February and payable in early March.
？誗Final dividend announced together with the annual result in late August and payable in early October.
The Company has established a dividend reinvestment plan under which shareholders may elect to reinvest the net proceeds of cash dividends to be paid or credited on some or all of their ordinary shares held in the Company from time to time towards acquiring further fully paid up ordinary shares in the Company.
The Directors may， in their sole discretion， at any time terminate， suspend or modify the plan. The terms and conditions of the plan can be viewed by downloading the Dividend Reinvestment Plan or obtained from the Company？蒺s share registrar， Computershare Investor Services Ltd， Private Bag 92119， Auckland 1142.
Shareholders who receive their dividends in cash have the option of having a dividend cheque mailed to them or having the payment directly credited to their nominated bank accounts in New Zealand. The Company strongly recommends that shareholders choose to have their dividend payments directly credited to their nominated bank accounts in New Zealand. To do this， shareholders should contact the Company？蒺s share registrar by phoning Computershare on 09 488 8777 or by visiting the Computershare website.
Dividend policy of Freightways：
The Company？蒺s dividend policy is to declare dividends at a rate of 75% of NPATA （net profit after tax and amortisation） in conjunction with the release of the half year and full year results. Payment of dividends is proposed to be in March and September each year.
The Directors reserve the right to amend the dividend policy at any time. Each dividend will be determined after due consideration of the capital requirements， operating performance， financial position and cash flows of the Company at the time.
4.Agency theory
Agency theory is a concept that explains why behavior or decisions vary when exhibited by members of a group. Specifically， it describes the relationship between one party， called the principal， that delegates work to another， called the agent. It explains their differences in behavior or decisions by noting that the two parties often have different goals and， independent of their respective goals， may have different attitudes toward risk. As a whole， from the cash flow and balance and income statement and dividend payment history， these are the important factor which to be considered whether or not should be invested in this two company. Compared with net income， the Freightways is more than Cavalier. In addition， the Cavalier does not make profit in 2012. On the contrary， it loss about 1.6 million dollars. so If the investor invest in Freightways， they will get stable profit， and even more than Cavalier.
Conclusion
To sum up， with lots of comparisons， the company of Freightways is the best choice to invest. The investor who will invest in this company will get higher return with lower risk.
Reference：
[1]Cavalier Corporation Ltd annual report （2012） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2012annualreport.pdf.
[2]Cavalier Corporation Ltd annual report （2011） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2011annualreportfinal.pdf.
[3]Cavalier Corporation Ltd annual report （2010） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2010annualreportfinal.pdf.
[4]Cavalier Corporation Ltd annual report （2009） Retrieved from http：//www.cavcorp.co.nz/images/ReportPDFs/cavcorp2009annualreportfinal.pdf.
[5]Cavalier Corporation Ltd （2012） Retrieved from http：//www.cavcorp.co.nz/dividendpolicy.