Analysis of Company Financial Position

This assignment involves analyzing the financial position of a company using various ratios such as debt to equity ratio, interest coverage ratio, debt coverage ratio, price earning ratio, and dividends per share. However, due to certain limitations in the provided data, some ratios could not be calculated accurately.

Accounting and Finance
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Q1: Identification and evaluation of main ethical issues related with job automation...............1
(b): Norms, principles and values related with job automation..................................................2
(c): Determine two company that are impacted by job automation............................................2
(d): Identification of stakeholder in chosen company those are impacted through automation. 3
PART 2............................................................................................................................................4
(a): Discussion of the various regulatory impacts on external reporting....................................4
(b): Answer of questions through using consolidate financial report.........................................4
(c): Ratios calculation ................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Accounting is one of the effective tools of any business enterprises. They uses this as
primary tools to record all those financial transactions that are being done during an accounting
period of time. This project report is related with two parts, one is related with research analysis
about various impacts of job automation and norms, principles or values to all those issues
related automation. The other part of this report is providing financial report analysis of virgin
Australia group and their regulatory aspects. With the use of consolidated financial report of the
company certain questions is be resolved to determine their current position in the market
(Anandarajan, Anandarajan and Srinivasan, 2012).
PART 1
Q1: Identification and evaluation of main ethical issues related with job automation
Job automation is said to be an effective technique or system of operating or managing
through highly automated means by using electronic devices, eliminating human involvement to
minimum level. Basically, it is automatic control process which is use by Virgin Company for
operating their necessary equipments such as machinery, switching on electronic devices and
aircraft or their application. There are certain aspects that are related with virgin overall business
profitability (Job Automation, 2011). There are certain ethical issues which are related with the
company. These can create certain implication in accordance to overall performance of an
organisation. Some of them are mentioned underneath:
 Privacy regulation: The main ethical issues found in job automation are privacy
of data. Because of minimum control the chances of hampering privacy can get
affected (David, 2011).
 Formulating liability framework: It is necessary to design all debt related
obligations in systematic manner so that they would not make maximum impacts
on financial stability on Virgin Company.
 Safety regulations: There are certain crucial regulations which are related with
safety measures are needed to be followed in ethical manner.
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 Scrutiny of machine learning: It is necessary to make proper selection of people
that are having ability to handle their valuable machine use by virgin company in
their daily business operations.
(b): Norms, principles and values related with job automation
The code of ethics in accordance with job automation is a professional incorporates values,
principles and other professional standards. Most of the people in Virgin company has been
creating effective as valuable antiquity as proper evidence through drawing specific terms and
conditions to all the staffs and members those are operating in company. The ability of job
automation is to transform vast amount of complex, indistinct data into a particular insight which
has certain potential to reveal long term aims and objectives of an organisation. In order to
determine its valuable benefits to the society, it is necessary to make understanding to make sure
that company is following the same ethical principles, moral values and norms (DRURY, 2013).
The right level of trust will be adopted through repeated experience; in the same manner
the company would always make faith in employees that they will provide better results in order
to attain their overall aims and objectives. Trust is being formulated upon accountability. They
need to explain their ethical behaviour in relation to human to understand their inner capability
towards determining overall increase in company’s profitability. The primary reason for
consisting algorithmic accountability in any job automation is to manage the potential for
removing bias in overall decision making process.
(c): Determine two company that are impacted by job automation
There are mainly company those are making their ways in the field of job automation.
This will increase overall profitability as well as their efficiency in current time. To determine
their implications. The two major companies which are increasing at faster rate are:
Apple Company: It is has said to be one of the biggest mobile phone companies which
are able to produce electronic devices to various classes of people. This has changed the entire
scenario of telecom sectors. It has been seen wide number of impact of automation on labour
forces in their factories and warehouses. With the introduction of robots a huge downfall is being
recorded into employment and wage rate.
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Advantages: with the use of automation system they are able to unite maximum people
to connect with the digital network with faster rate. They are able to keep mobile to maintain
their standard in front of other people. The standard of living has increase up to an extent.
Disadvantages: The biggest limitation of this particular industry is that they are not able
to provide economical prices of their cell phone to people those are having low level of income.
This can only be carried by upper class people of mostly business purposes.
Virgin company: It has been found that a total of 30% of work is done electronic in
global private sector which assessed the impacts on automation in socio economic environments.
Maximum number of passenger are using online mode to book their trips and other necessary
requirements (Scott, 2015).
Advantages: The maximum benefits to customers will be provided in the form of instant
transaction and online booking facilities without going to any particular places.
Disadvantages: Chances of fraudulent activities because of hacking systems done by
unethical parties from outside. These seem to be not so secure and safe.
(d): Identification of stakeholder in chosen company those are impacted through automation
As per the above selected companies, it has been found that both of them have increase
more effectively in recent past. This drastic change has seen because of their automation impacts.
Out of those two companies, the maximum affected stakeholder is seen in Apple Inc. This
particular company get relaxed prices of notebooks for their huge amount of deal. There are
certain specific stakeholders of apple those are getting affected because of job automations.
Some of them are discuss underneath:
Suppliers: According to apple company each of their suppliers to meet its higher standard
for all products and services. They are making maximum focused on maintain superior quality of
their gadgets. The must know about the working of automation systems as well as other aspects
that are related with them (Renz and Herman, 2016).
Customers: It has been seen that a total of 166 million people as well as supporters of
connected with this particular company. The get affected because they would lose job
opportunity as they do not have that much ability to work on automated system. This will create
chances of accidents.
Investors: They are mostly related with providing valuable amount of funds in order to
establish such kind of implementation system. In order to accepted the proposal they need to
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make sure that wants further growth chances it will provide to them in near future. This can get
certain impacts on their investment thinking.
PART 2
(a): Discussion of the various regulatory impacts on external reporting
All the company those are operating in Australia are needed to lodge a business activity
statement to Australian taxation office in order to make payment and report of all tax related
obligations. The ASIC is known as Australia’s corporate, financial market or regulatory bodies
which held responsible for producing more reliable outcomes for the company to operate their
business in more effective and reliable manner. The company such as Virgin has to make use of
IFRS to record their all accounting related information in their regular course of business. This
will responsible for maintain proper standard in setting power over all specific matter related to
the Australian standards (Wood, 2016).
The regulatory modification that has made for the purpose of formulating business
operations in virgin company Local government of Australia is responsible for looking after all
activities that regulation those are helpful to manage their every day financial transactions.
Companies those are listed on ASX are liable to regulate their periodic disclosure rule and
regulations so that chances of mistakes can be easily avoided. Usually, the reports are prepared
at the closing of financial year so that all necessary analysis of auditing of reports can be done
more accurately. Apart from all companies they need to keep record of financial data to ensure
that proper understanding of their operations can be done in more effective manner.
(b): Answer of questions through using consolidate financial report
1. Accounting equation is said to be the base of double entry accounting system. This will
display all related assets are either financed through borrowing or by paying funds to companies
shareholder.
Assets= Liabilities + Shareholder equity
= 4782+1573
= 6355
2. The company which has audited the performance of Virgin Australia is “KPMG groups”.
They as audited certain matters those are related to deferred tax assets associated with Historical
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tax losses. By having proper knowledge about key factors regarding airline sectors all losses to
analyse by estimating total taxable income.
3. The auditors have done specific information about remuneration services provided to that
particular airline company. In accordance with other aspects related with materially inconsistent
with financial reports are obtained in the audit.
4. The interest bearing liabilities are other non-current liabilities which are be kept by the
company. They are subsequently measured at amortised costs which are used as effective interest
method. They are being classified as current debts unless the group has an unconditional right to
defer settlement of debts after the balance date (Weißenberger and Angelkort, 2011).
5. Property, plant and equipment are recorded at cost less accumulated depreciated at straight
line method of the total life of leasing.
6. The largest sources of finance is taken as Bank loan and from leasing, whereas the other
ancillary revenues are arises from non-ticketing sources such as baggage fees and on board good
and service.
7: The total number of recognise expenses for finance costs are 5171 during 2017. It has
decrease from last year which is happens to be 5278. The total changes are seen with 107
million.
8. The group had not any contingent liability or capital commitment associated with their interest
in Virgin as on 30 June 2017.
9. A total of 19% ordinary shares are being kept by virgin company. It has been increase from
2.4% during the year.
10. The total loss incurred during the time is about -185.8 million. The cash from operating
activities are generated as 273.9. The total difference is collected with 88.1. These impacts are
seen because of overall transaction done by the company during the time is relatively different
from one another.
11. The unearned revenues is consists of non-current liability portion of $1074.2million.
Revenue received in advance. Passenger revenues, loyalty program revenue, Credit vouchers and
other earnings. Yes, these are expected from the company.
12. The director reports are done to make comparison about their capabilities and duties are
discuss under this report. While director declaration report is presented to provide all information
about the company are held accurate to publish in the market.
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13. The basic reason behind doing is to reduce extra losses or expenditure as well as tried to
determine the hidden drawbacks of the company. The time period covered is about April to
September (Chandra, 2011).
(c): Ratios calculation
Ratios Formula 2017
ROE Net income/ Shareholder equity 3.2087094723
ROA Net income/ Total assets 0.7941250511
Profit margin ratio Net profit/ sales *100 -3.6811760743
Asset turnover ratio Revenue / net asset 0.7941250511
Current ratio Current asset/ current liability 0.7611889452
Debt to equity ratio Total debt / Total equity 3.038505528
Interest coverage ratio EBIT/ interest expenses 8.3942028986
Debt coverage ratio Net operating incomes/ debt service 1.0813885404
Price earning ratio Market price per equity/ EPS
Cant not be
calculated as
organisation is
having loss
Dividends per share Total dividend paid/ total number of share issue
Cant not determine
as company is not
sufficient amount
profit to pay
dividend
CONCLUSION
From the above project report, it has been concluded that accounting is an effective
process that can assist in formulating overall performance of an organisation. The primary
purpose of using auditing process is to analysis virgin company financial position during the
time. This can be determine by using various ratios that are helpful to present valuable
information about their future plans and growth chances.
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REFERENCES
Books and Journals:
Anandarajan, M., Anandarajan, A. and Srinivasan, C. A. eds., 2012. Business intelligence
techniques: a perspective from accounting and finance. Springer Science & Business
Media.
David, F. R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.
DRURY, C. M., 2013. Management and cost accounting. Springer.
Scott, W. R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.
Renz, D. O. and Herman, R. D. eds., 2016. The Jossey-Bass handbook of nonprofit leadership
and management. John Wiley & Sons.
Wood, D. A., 2016. Comparing the publication process in accounting, economics, finance,
management, marketing, psychology, and the natural sciences. Accounting Horizons.
30(3). pp.341-361.
Weißenberger, B. E. and Angelkort, H., 2011. Integration of financial and management
accounting systems: The mediating influence of a consistent financial language on
controllership effectiveness. Management Accounting Research. 22(3). pp.160-180.
Chandra, P., 2011. Financial management. Tata McGraw-Hill Education.
Online
Job Automation. 2011. [Online]. Available through: <https://www.huffingtonpost.com/martin-
ford/job-automation-is-a-futur_b_832146.html>.
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