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ACCT 5324-Accounting and Financial Reporting | Assignment

   

Added on  2020-03-07

6 Pages1497 Words43 Views
Running Head: Accounting and Financial Reporting 1Accounting and financial Reporting Student’s Name

Accounting and Financial Reporting 2Analyzing, forecasting and interpreting final statements:Income statement and balance sheet of a company has been investigated to forecast about the future and interpret about the financial performance of the company. In this report, it has been analyzed that financial performance of this company is enhancing rapidly as the revenue of the company has been enhanced from last 2 years. Further, it has also been investigated that with the total revenue, the cost of goods sold of the company has also been enhanced. Additionally, entire factors of income statement have been analyzed to reach over a conclusion. Operating margin of company describes the user that the profit has been enhanced with 9.52% from 2012 (Hák, Moldan and Dahl, 2012). EBIT of the company depictthat in 2012, the earnings before interest and tax was $ 1320 million but in 2014, it has been enhanced to $ 2102 million, directly a 59.24% growth has been analyzed in EBIT of the company. Consequently, net profit of the company depicts that in 2012, the net profit was $ 847 million but in 2014, it has been enhanced to $ 1335 million, directly a 57.62% growth has been analyzed in net profit of the company. Thus the investigation over the income statement of the company depict that company has enjoyed a great market from last 3 years. Further, balance sheet of this company has been investigated to analyze that financial performance of this company. It has been analyzed that the current assets of the company has been decreased by 10.27% from last year. A decrement has also been found in the current liabilities of the company. The current liabilities have been decreased by 18.97%. Further, thetotal assets of the company have also been decreased. A decrement has also been found in thetotal liabilities of the company. Shareholder equity has been increased but the growth rate is quite lower. Thus it has been found that the assets and liabilities level have been reduced by the company to manage the sources of the company. ParticularsAmountAmountAmount2Column2AUD$ '000AUD$ '000AUD$ '000Total Revenue27,68626,4052500310.73%COGS16,53815,7381482411.56%Operating Profit/(Loss)11148.010667.0101799.52%EBIT2102.01968.0132059.24%Finance cost767.0712.0473.062.16%Net profit1335.01256.0847.057.62%Current Assets78768777-10.27%Quick Assets25683660-29.84%Inventory530851173.73%Average inventory 5212.5

Accounting and Financial Reporting 3Trade receivables/Debtors371.0368.00.008152Average Debtors 369.5Total Assets2099122095-0.04997Average assets 21543Current Liabilities5075.06263.0-18.97%Trade Payables/Creditors15791593-0.88%Average creditors 1586Total Liabilities1494016162-0.07561Capital Employed15916.015832.00.005306Long term loans6,8066,6550.02269Shareholders' Equity605159330.019889(Lee, 2006)Additionally, forecasting has been done over the balance sheet and income statement of the company and it has been found that the company is performing very well in the market and the economical and market conditions are also in the favour of the company. Further, it has been investigated that from last 3 years, the operations of the company are enhancing rapidly and further, it would also enhance in near future (FIRER et al., 2012). The forecastinghas been done to make better strategies for the future and it has been suggested to the company to enhance its customer base as the demand of the products would enhance in near future. Current assets and current liabilities have been reduced by the companies to make better utilization of minimum resources. This step has also taken by the company to make a better capital structure for the betterment of the company. Computation of ratio analysisLiquidity ratio 20132012Current ratio1.5519211.40140511%Quick ratio0.506010.584384-13%Working capital2,801.02,514.011%Profitability Ratios20132012Operating Profit Margin0.075920.07453-0.00139Net Profit Margin 0.048220.04757-0.00065Return on Capital Employed0.10.1-0.00776

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