Corporate Accounting: Financial Analysis of PPK Group Limited, Protean Energy Limited and Orbital Corporation Limited

The report assesses the financial reports of PPK Group Limited, Protean Energy Limited and Orbital Corporation Limited. It includes analysis of their cash flow scenario, position of debt to equity, corporate taxation process and other comprehensive income statements. The report concludes by finding out which company has been performing effectively.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student;
Name of the University:
Author’s Note:

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Executive Summary
The concerned report has been constructed in order to assess the several sorts of items that have
been listed within the financial reports of PPK Group Limited, Protean Energy Limited and
Orbital Corporation Limited. The main aim of this report has been to assess their cash flow
scenario, position of debt to equity, corporate taxation process and other comprehensive income
statements. The first phase of the report has concentrated on the aspect of debt and equity of the
companies that have been selected for this report. Thereafter the position of cash flow for all the
three companies are compared and evaluated. The report then tries to assess the other
comprehensive income statements of the three companies. The report is completed by assessing
and addressing the various elements of tax that are paid off by the companies. In this manner the
entire report in accordance to the three companies are completed and a conclusion is attained in
order to find out which company has been performing effectively.

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Table of Contents
Introduction......................................................................................................................................4
Equity and Liability.........................................................................................................................5
Question (i)..................................................................................................................................5
Question (ii).................................................................................................................................6
Question (iii)................................................................................................................................7
Cash Flow Statement.......................................................................................................................8
Question (iv)................................................................................................................................8
Question (v).................................................................................................................................9
Question (vi)..............................................................................................................................12
Other comprehensive income statement........................................................................................13
Question (vii).............................................................................................................................13
Question (viii)............................................................................................................................13
Question (ix)..............................................................................................................................13
Question (x)...............................................................................................................................14
Corporate Income Tax...................................................................................................................14
Question (xi)..............................................................................................................................14
Question (xii).............................................................................................................................15
Question (xiii)............................................................................................................................15
Question (xiv)............................................................................................................................16

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Question (xv).............................................................................................................................16
Question (xvi)............................................................................................................................16
Question (xvii)...........................................................................................................................17
Conclusion.....................................................................................................................................17
Reference List and Bibliography...................................................................................................18

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Introduction
The current report looks to assess the financial reports of the companies that have been
selected from the ASX list and all the three companies have been chosen from the same sector so
that the comparison can be effective and fruitful. The companies that have been selected are PPK
Group Limited, Protean Energy Limited and Orbital Corporation Limited. The three companies
that have been chosen belong from the Australian mining sector. This report therefore tries to
assess the current annual report for the three companies and assesses their financial report for the
last three years. The assessment would comprise of analysing the liability and equity of the
companies, corporate income tax and other comprehensive income statements.
PPK Group Limited is a renowned Australia based company, which is associated with the
manufacturing of automation based mining products and other services group. There are several
kinds of products that are related to improvement in the mining sector and even in various
services with the help of which they are able to expand a world class technology all over the
globe. The company was established in the year 1979 and ever since the company has been
operating in an effective manner.
Protean Energy Limited is known to be a vanadium resource and vanadium redox flow
battery development organization, which is an Australian based organization and they operate
with the assistance of a South Korea based company. The organization with the assistance of
Stonehenge Korea Limited have been involved with various kinds of uranium vanadium mineral
projects have been looking forward to enhance the world of technology with the help of which
various developments are possible. The company was established in the year 2006 and ever since

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the company has been looking for better developed equipment and products with the help of
which the mining industry can be developed in a better manner.
Orbital Corporation Limited previously known as Orbital Engine Corporation Limited is
an Australian based organization, which has the aim of providing clean and effective
technologies and even alternative fuel systems with minimum level of impact on the
environment from the emission of gas and enhanced fuel economy. The company was
established in the year 1972 and from then the company has been making various changes in
order to make up with the changing environment in the economy.
Equity and Liability
Question (i)
By assessing the annual report of the three companies, it is seen that each of the
companies have specific level of items of equity within their balance sheet.
By assessing the annual report of PPK Group Limited, it is seen that there are two items
of equity and they are retained earnings and common stock. The common stock for the company
has been found to same for the year 2015 and 2016 and the value has been 35 million and this
value has decreased to 34 million in the year 2017 (PPK Group Limited 2019). The retained
earnings of the company have been negative for the company for all the three years. It is seen
that negative 20 million for the year 2015 and 2016 however, the value has increased to negative
19 million indicating that the company is looking to improve their financial position.
By assessing the annual report of Protean Energy Limited it is seen that the equity items
are inclusive of retained earnings, common stock and capital reserves. It is seen that there has not

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been any changes in the values in the year 2015 and 2016. It is seen that there has been a certain
rise in the capital reserves in the year 2017 (Protean Energy 2019). The retained earnings for the
company have been negative as well and thereby signifying that the company has not performing
properly. The common stock of the company has been very poor as well and therefore it can be
said that the company has not been performing in an effective manner.
By assessing the annual report of Orbital Corporation Limited, it can be said that the
company has reserves, retained earnings and contributed equity. There has been no change on the
contributed equity of the company as there has not been any addition of shares within the time
period that has been taken into consideration (Home – Orbital 2019). There has been a decline in
the reserves for the company when assessment is done for the three years. The retained earnings
has shown some amount of increase as there has been a rise in the level of profit for the
company.
Question (ii)
By assessing the annual report for PPK Group Limited it is seen that there are availability
of current and non-current liabilities. The current liabilities are known to be various financial
liabilities and borrowings that have been taken by the company. There has been a fall in the
current liabilities from the time period of 2016 to 2018. This reveals that the trade payable for the
company has declined (PPK Group Limited 2019). The non-current liabilities of the company
have even fallen as well as it is seen that there has been a fall in the non-current liabilities as well
and this has been mainly due to the fall in the long term borrowings and various other financial
liabilities. It is due to this fact that the total liabilities have declined as well from the year 2016 to
2018.

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In case of Protean Energy Limited, the current liabilities of the company are trade
payables, deferred income and other financial liabilities. The current liabilities of the company
has fallen in the year 2017 from 2016 by a significant margin and this has been mainly due to
various factors of the company (Protean Energy 2019). The current liabilities have increased in
the year 2018 from the previous year as the extent of deferred income has increased. The non-
current liabilities of the company comprises of the trade payables and other financial liabilities
and the same has been observed as the non-current liabilities have decreased in the year 2017 and
thereafter has increased in the year 2018.
By assessing the current and non-current liabilities of Orbital Corporation Limited, with
the help of their annual report, it is seen that the non-current liabilities of the company. The
current liabilities of the company constitutes of borrowings and tax liabilities. The non-current
liabilities of the company are deferred tax liabilities (Home – Orbital 2019). The assessment of
the annual report reveals that the total liabilities of the company has fallen as well from the year
2016 to 2018.
Question (iii)
In order to compare the equity and debt scenario of the selected three companies, the
debt-to-equity ratio is known to be the most ideal measure.
2016 2017 2018 2016 2017 2018 2016 2017 2018
Total Liabilities 18,402,000$ 8,341,000$ 8,243,000$ 887,683$ 1,574,299$ 308,681$ 17,920,000$ 17,331,000$ 12,939,000$
Total Equity 16,986,000$ 16,318,000$ 15,490,000$ 8,815,500$ 2,915,748$ 6,969,874$ 31,268,000$ 19,183,000$ 21,663,000$
Debt to Equity Ratio [Total Liabilities/Total Equity] 1.08 0.51 0.53 0.10 0.54 0.04 0.57 0.90 0.60
PPK Group Limited Protean Energy Limited Orbital Corporation Limited
Particulars

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2016 2017 2018
-
0.20
0.40
0.60
0.80
1.00
1.20 1.08
0.51 0.53
0.10
0.54
0.04
0.57
0.90
0.60
Debt to Equity Ratio
PPK Group Limited Protean Energy Limited Orbital Corporation Limited
By assessing the table and graphs that have been pasted above, it can be stated that all the
three companies are not able to make use of their debt capital in a proper manner but are able to
use their equity capital more in order to meet their demand for capital. The maximum amount of
debt capital is used by PPK Group Limited and Orbital Corporation Limited. But by looking into
the liabilities, it is seen that Protean Energy Limited has the lowest amount of liability in
comparison to the other companies. Therefore, when assessing the financial leverage of the three
companies, Orbital Corporation Limited has the minimum amount of risk and thereafter PPK
Group Limited and Protean Energy Limited.
Cash Flow Statement
Question (iv)
The cash flow statement of PPK Group Limited is inclusive of various items like the
interest received, interest paid, dividends received. The investing cash flows include plant and
equipment, exploration costs; proceed from the sale of proceeds and assets etc. The financing
cash flows are inclusive of the interest bearing liabilities, repayment of the interest bearing

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liabilities, ordinary proceeds from shares, purchase of shares, proceeds from instruments related
with debt etc (PPK Group Limited 2019).
It is seen that in case of Protean Energy Limited and Orbital Corporation Limited, the
cash flow statement and their items have been more or less similar and therefore one can state
that computation of the cash flows are done on the basis of these items. These are the items that
are used by the companies with the help of which proper functioning of the operational activities
of the companies can be ascertained. The annual report of the company has been very effective
in recording all the financial values and figures and thereby better results can be ascertained.
Question (v)
2016 2017 2018
Net Cash from Operating Activities 6,230,000-$ 7,615,000-$ 176,000-$
Net Cash Used in Investing Activities 5,037,000$ 13,974,000$ 556,000-$
Net Cash Used in Financing Activities 336,000-$ 6,196,000-$ 940,000$
PPK Group Limited
Particulars
2016 2017 2018
-$10,000,000
-$5,000,000
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
-$6,230,000 -$7,615,000
-$176,000
$5,037,000
$13,974,000
-$556,000
-$336,000
-$6,196,000
$940,000
PPK Group Limited
Net Cash from Operating Activities Net Cash Used in Investing Activities Net Cash Used in Financing Activities

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By analysing the case flow statement of PPK Group Limited, the key items within the
operating cash flow is inclusive of interest paid and received, dividends received and the changes
in the liabilities and assets. The cash flows for the concerned company has fallen significantly
from the year 2016 to 2018 and the value has been negative. The cash flow from the investing
activities has been found to be positive as well and the values have been low in the year 2016
and thereafter have increased in the year 2017. In 2018, the value has again declined and has
become negative (PPK Group Limited 2019). By looking into the financial activities, it is seen
that the value has been negative in the year 2016 and 2017 and in the year 2018 the value has
increased and has become positive.
2016 2017 2018
Net Cash from Operating Activities 1,911,935-$ 1,834,505-$ 1,427,703-$
Net Cash Used in Investing Activities 245,000-$ 68,138-$ 448,500-$
Net Cash Used in Financing Activities 3,350,940$ 830,475$ 4,229,331$
Protean Energy Limited
Particulars
2016 2017 2018
-$3,000,000
-$2,000,000
-$1,000,000
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
-$1,911,935 -$1,834,505 -$1,427,703
-$245,000 -$68,138 -$448,500
$3,350,940
$830,475
$4,229,331
Protean Energy Limited
Net Cash from Operating Activities Net Cash Used in Investing Activities Net Cash Used in Financing Activities

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By assessing the cash flow statement of Protean Energy Limited, it is seen that net cash
from operating activities has been negative and the value has increased from the year 2016 to
2018. By looking into the net cash from investing activities, the value is negative in the year
2016 and thereafter in 2017 the value has increased a bit even though the value has been negative
(Protean Energy 2019). In the year 2018, the value has decreased by a significant margin and the
value has been negative as well.
2016 2017 2018
Net Cash from Operating Activities 5,081,000-$ 4,853,000-$ 8,778,000-$
Net Cash Used in Investing Activities 23,052,000$ 1,909,000-$ 1,627,000$
Net Cash Used in Financing Activities 597,000-$ 717,000-$ 860,000-$
Particulars
Orbital Corporation Limited
2016 2017 2018
-$15,000,000
-$10,000,000
-$5,000,000
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
-$5,081,000 -$4,853,000
-$8,778,000
$23,052,000
-$1,909,000
$1,627,000
-$597,000 -$717,000 -$860,000
Orbital Corporation Limited
Net Cash from Operating Activities Net Cash Used in Investing Activities
Net Cash Used in Financing Activities
On the other hand, by assessing the cash flow statement of Orbital Corporation Limited,
it is seen that net cash from operating activities has been negative in 2016 and the value has
increased in the year 2017 and thereafter has again fallen in 2018. With respect to net cash from
investing activities the value has been positive in the year 2016 and the value became negative in

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the next year and in 2018 even though the value has been negative the amount has increase a bit
(Home – Orbital 2019).
Question (vi)
By looking into the assessment that has been done in the previous question, it can be
determined that net cash from operating activities has been the best for Protean Energy Limited
followed by PPK Group Limited and Orbital Corporations Limited. With respect to the net cash
from investing activities it can be stated that the figures has been the best for PPK Group
followed by Orbital Corporation Limited and Protean Energy Limited. With respect to the net
cash from financing activities it is seen that Protean Energy Limited has the best financing
activities, which is followed by Orbital Corporation Limited and PPK Group Limited. It can be
observed that all the three companies are related to making investments in purchasing plants and
equipment, properties and other sorts of business acquisitions. The companies have invested a lot
of capital in these aspects as seen from their annual reports. It is even seen that all the three
companies have made extensive expenses, which have led to rise in cash flow with respect to the
previous years.

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Other comprehensive income statement
Question (vii)
By analysing the annual report of PPK Group Limited, the key items within the other
comprehensive income statement includes sale of investment that is available, cash flow hedge
and the items that has not been classified in the statement of income (PPK Group Limited 2019).
In case of Protean Energy Limited, the items that are in the other comprehensive income
statement are reserves for foreign currency translation and other transactions (Protean Energy
2019).
Orbital Corporation Limited has revealed that their items in the other comprehensive
income statement has been found to be foreign currency exchange, differences in the net
exchange, interests that are non-controlling and other various items (Home – Orbital 2019).
Question (viii)
The three companies that have been taken into consideration have not kept or maintained
the items that have been discussed in the other comprehensive income statement, as their trait is
special and they are not utilised for undertaking their daily operations of business. The
companies have been using them for revealing their operations of business within the year. It is
due to this fact that the organizations do not expose their within their income statement due to
which the comprehensive statement is made to report.
Question (ix)
By looking at the annual report of the three companies, the common factor has been the
cash flow hedge in the other comprehensive income statement. PPK Group is found to have the

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largest amount of other comprehensive income statement and thereafter Orbital Corporation
Limited and Protean Energy Limited. The organizations have even taken into account the foreign
exchange currency transactions. This has made an impact on the non-controlling interests as well
as welfare of the shareholders interest.
Hence, the recording of these items in the statement of income of the selected three
companies would have a direct effect on the net profit with the fall or rise in the special items.
Hence, the aspect of profitability of the company would be affected with the addition of these
items in the other comprehensive income statement.
Question (x)
The entities performance is not dependent on the items of the comprehensive business as
they have been explained in the annual report directly. Therefore, it can be stated that at the time
of presence of all the aspects, the companies management may not utilise the other
comprehensive income statement for assessing the performance of the managers.
Corporate Income Tax
Question (xi)
The company’s annual report has published the expenses related to tax that have taken
place for the current and the previous years. By looking at the annual report of PPK Group the
company has incurred some amount of tax expenses and the tax benefit has been very less (PPK
Group Limited 2019).

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The annual report of Protean Energy Limited has shown that the company has paid a
certain amount of tax in the year 2017 but has not received any sort of tax benefit out of it
(Protean Energy 2019).
The annual report of Orbital Corporation Limited even reveals the same thing. The
company with respect to the other companies has paid higher taxes and therefore the tax benefit
that they have received is more as well (Home – Orbital 2019).
Question (xii)
For the purpose of calculating the tax rate of PPK Group Limited, Protean Energy
Limited and Orbital Corporation Limited, there have been certain calculations that have been
computed, which have been revealed the tables below:
Particulars PPK Group Limited Protean Energy Limited Orbital Corporation Limited
Income Tax Expenses (A) -$ -$ 2,000$
Earnings/(Loss) Before Tax (B) 1,561,000-$ 3,669,483-$ 1,737,000$
Effective Tax Rate (A/B) 0.00% 0.00% 0.12%
The tax rate that is effective to the organizations refers to the aggregate rate of tax, which
the companies use for the purpose of calculating the taxable value on the profit of the business.
The calculation is done by dividing the earnings before tax by the income tax costs, the efficient
tax rate is found out. The table above explains that Orbital Corporation Limited has incurred the
highest tax rate and the other companies have not incurred at all.
Question (xiii)
One of the critical elements for the purpose of financial statements for a company has
been deferred tax liabilities and assets and the companies are responsible to publish their values
within the financial reports at the end of every accounting year. By looking into the annual report

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of the three companies, it is seen that they have published their deferred tax assets and liabilities
by looking into the financial footnotes. The key reason for the fact these items are maintained
because of the maintenance of the variation among the accounting profit and profit tax. The other
factor that assists their addition in the financial statements is the inclusion of the forward tax
liabilities and assets in the current year from the previous year.
Question (xiv)
By looking into the annual report for PPK Group it is seen that their deferred tax assets
has been minimum for all the years. The same has been noticed for deferred tax liabilities for the
company (PPK Group Limited 2019).
For Protean Energy Limited, the issue has been the same and therefore negligible deferred
tax assets and liabilities have been found (Protean Energy 2019).
By assessing the annual report for Orbital Corporation Limited, it is seen that they have
certain amount of deferred tax assets and liabilities and this has been represented in the annual
report of the company as well (Home – Orbital 2019).
Question (xv)
Particulars PPK Group Limited Protean Energy Limited Orbital Corporation Limited
Income Tax Provision -$ -$ 2,000$
Add: Increase in Deferred Tax Liabilities -$ -$ -$
Less: Increase in Deferred Tax Assets -$ -$ 2,000-$
Add: Taxes on Finance Cost 47,100$ 15,711$ 158,400$
Total Amout of Cash Tax 47,100$ 15,711$ 158,400$
Question (xvi)
Particulars PPK Group Limited Protean Energy Limited Orbital Corporation Limited
Cash Tax Amount 47,100$ 15,711$ 158,400$
Operating Profit/(Loss) 1,404,000-$ 3,317,114-$ 1,209,000$
Cash Tax Rate 0.00% 0.00% 13.10%

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By looking into the table depicted above it is seen that Orbital Corporation Limited has the
most cash tax rate amounting to 13.10% and thereafter the two companies come in as they have a
percentage of 0%.
Question (xvii)
The main factor due to which the cash tax rate and the book tax rate is not similar to each
is for the fact that the companies show their cash tax rate on the basis of the current year. On the
other hand the computation of the book tax rate is undertaken on the basis of the current and the
future years.
Conclusion
The explanation that has been taken earlier it is evident that the selected companies are
more dependent on equity financing. It is even seen that the companies take considerable value
of money from their customers and thereby make investments on the repayment and purchase of
various sorts of assets. The assessment of all the sections that have been discussed in this report
has revealed a great deal about these companies and thereby proper understanding of the
companies are known in an effective manner.

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