Accounting Report of a business

Accounting Report of a business

 

Weighting – 30%

Due Date 26^th April

ASSESSMENT TASK 2: DESCRIPTION

This is a group task, groups of 3 or 4 students should work together to analyse and critically assess the performance and position of your chosen company – no groups larger than 4 students will be permitted. The assignment consists of a full financial analysis and assessment of a company listed on the Australian Stock Exchange.  Students may select any company listed on the Australian Stock Exchange, and must obtain relevant financial statements from the company website (the three basic financial statements for each of the years that you analyse and discuss must be one of the appendices to your report), as well as relevant contextual and performance research from multiple sources. We suggest you use an industry with which you are familiar so that you can include relevant information and sensible data and deploy your industry knowledge to enhance your contextual analysis and discussion.

 

Tis assessment is a group activity.  This means that you must work constructively in a group. There will be opportunities to work in class on this assignment during the first intensive weekend. Your group performance mark will be moderated based initially on the lecturer’s observation of how well you are prepared, and how well you contribute to the overall group process and output.

 

Minimal group requirements include, but are not limited to:

• All group members must attend the 3^rd collaborate session on 3^rd April with the financial reports already downloaded and ready to work on them.
• If you are not present, your personal group participation may be negatively impacted.
• If you come without financial statements downloaded and ready to analyse, your personal group participation may be negatively impacted.

 

The report should adhere to the following requirements:

• Report length should be no more than 2000 words, not including the Executive Summary, Appendices, or Bibliography.
• Executive summary (The first page of your report – one page absolute maximum, double spaced) It is essential that you obtain the JCU resource that describes what ‘a report’ is, and then demonstrate that you are able to comply with it.
• Contents page
• Introduction and explanation of the business and any important contextual information that assists in understanding the financial data you are analysing and presenting. (short but sufficient to provide context)
• Discussion and critical analysis of financial statements and accompanying material in the context of the particular business and economy, competitors, and any other relevant information and data that enhance understanding of the business’s financial situation. In this section you will draw on the analysis you have undertaken, details of which will be in the appendices of your report.
• Conclusion about the financial performance and position of the business, how you see its likely future performance and any other relevant conclusion supported by your analysis and discussion.
• An appendix containing details of your analysis. Depending on which analytical tools you choose to use, this could include vertical and horizontal analysis, and ratios analysing the business’s liquidity, working capital management, solvency, capital structure and gearing, profitability and efficiency and market performance and other relevant areas that you discuss in the body of your report, trend analysis and so on.
• An appendix of the three core financial statements for the years that are analysed.
• Other relevant material that enhances your analysis and discussion
• Bibliography in proper academic format using APA conventions (if you are unsure of how to do this, please consult the library guides)

 

 

 

 

• RATIO FORMULAE
• Profitability Ratios
• ROE = Profit available for distribution * 100
  Average Equity
• ROA =         EBIT  * 100       
  Average Total Assets
• GP Margin =  Gross Profit  * 100
  Sales or Revenue
• Profit Margin =  EBIT    * 100
  Sales or Revenue
• Expense ratio =    Expense * 100
  Sales or Revenue       
• Efficiency Ratios
• Asset turnover = Sales (Revenue) * 100
  Average total assets
• Inventory (av.days) =     Average Inventory * 365
                                      Cost of Goods Sold
• Inventory (turns) =        Cost of Goods Sold
  Average Inventory
• Debtors (av.days) =       Average Debtors * 365
                                      Sales or Revenue
• Debtors (turns) =       Sales or Revenue
  Average Debtors
• Creditors (av.days) =     Average Creditors * 365
                                      Cost of Goods Sold
• Creditors (turns) =       Cost of Goods Sold
  Average Creditors
• Liquidity ratios
• Current ratio = Current Assets
  Current Liabilities
• Quick ratio = Current Assets less Inventory
  Current Liabilities
• Cash ratio = Cash + Marketable Securities (i.e. near cash)
  Current Liabilities
• Cashflow to Sales = Cashflow from operating activities
  Sales
• Cashflow to total debt = Cashflow from operating activities
  Total Debt
• Capital Structure Ratios
• Debt to equity ratio = Total Liabilities  * 100
  Total Equity
• Debt ratio: = Total Liabilities * 100
  Total Assets
• Equity ratio: = Total Equity    * 100
  Total Assets
• Interest coverage           =          EBIT
                                            Net Interest

 

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