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PACCC6000 Financial Statement Analysis - Doc

   

Added on  2020-05-11

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RUNNING HEAD: Financial analysis report1Accounting financial analysis Report

Financial analysis report2Executive summaryIt has been emphasised in this report that how the financial statement of a company could be analyzed. For preparing this report, SPECIALITY FASHION GROUP LIMITED has been analyzed. For analyzing the final financial statement of the company, various methods have been used in this report. Annual reports, notes, director’s report, changes in theinternal and external factors etc have been analyzed for this report. SPECIALITY FASHION GROUP LIMITED’s financial statement has been analyzed through conducting this study over horizontal analysis, vertical analysis, ratio analysis etc. These tools assist the user in identifying the changes from last year in this year and the changes into other expenses in comparison of one expense.

Financial analysis report3ContentsIntroduction.......................................................................................................................4Financial Analysis............................................................................................................4Horizontal analysis.......................................................................................................4Vertical analysis............................................................................................................6Financial ratio analysis.................................................................................................6Conclusion........................................................................................................................8References.........................................................................................................................9Appendix.........................................................................................................................10

Financial analysis report4Introduction:This study has been emphasized on various financial information of the company in terms of performance, profitability; stability etc. for this report, SPECIALITY FASHION GROUP LIMITED has been taken into the context. It has been explained in this report that how this company is managing and performing its financial activities and functions in year 2016 in comparison with 2015 and 2014 (Home, 2017). Analysis of Financial statement is a study that is used to analyze the various statements, activities etc of the company. For this study, various methods, tools and techniques have been used to identify the stability and performance of the firm so that a quick and better conclusion could be prepared by the firm as well as the shareholders and other stakeholders to direct the decisions. Normally, for this examination, balance sheet, profit and loss account and cash flow statements has been taken into the context. Financial Analysis:Financial analysis is a study which is used by the analyst and the shareholders of the company to manage the financial activity of the company. Mainly, accounting and financial analysis study has been performed in the financial analysis. It explains about various position of the company such as stability, viability, profitability of a firm of a firm. This report is investigated by the analysts. Mainly, ratio analysis, horizontal analysis and Vertical analysis have been done in this study (Romney, Steinbart, Zhang and Xu, 2006). This examination is mainly done by the financial analyst and these reports are presented to the directors and the management of the company to make a decision about performance, viability and financial stability of the firm. Below techniques and methods have been taken into the context to analyze the performance, stability and viability of the SPECIALITY FASHION GROUP LIMITED:Horizontal analysis:Horizontal analysis is a method of analyzing the financial statement. This study of horizontal analysis express about various changes into the financial statement especially in a period. This investigation is useful for the company and the analyst to evaluate the trend condition and situation of SPECIALITY FAHSION GROUP LIMITED. In this analysis, normally 2 years or more than that are taken into context. For this analysis, earliest year is taken as a base year; further years data are analyzed according to the base year. Changes are

Financial analysis report5normally expressed in the form of percentage. The below is the formula of horizontal analysis:= (changes in the Dollar / Amount of the item in base year) *100The study of Horizontal analysis has been presented in SPECIALITY FASHION GROUP LIMITED to analyze the company’s performance in caparison of previous year. According to this analysis, it has been found that numerous changes have occupied the place into performance of 2016’s financial figures of the firm according to the 2015’s data. It has been investigated that company’s total revenue is expressing an enhancement from 2015. In addition, the total cost of the company has also been improved. The total increment in the income of the company from 2015 is only 4.43% while the total cost of revenue has been improved by 11.89% of the company from last year and it has been analyzed that the numerous alternations have been done by the company in its figures and activities which could be seen in its income statement.In addition, a study has been performed over the balance sheet of the SPECIALITY FASHION GROUP LIMITED. According to this study, it has been investigated that numerous changes have occupied the place into performance of 2016’s financial figures of the firm according to the 2015’s data of balance sheet. It has been investigated that company’s current assets is expressing an enhancement from 2015. In addition, the total assets of the company have also been improved (Horngren et al, 2005). The total increment inthe total assets of the company from 2015 is only 2.31% while the total liabilities of the company have been improved by 9.27% and the equity has been has been lowered by 13.85%of the company from last year and it has been analyzed that the numerous alternations have been done by the company in its figures and activities which could be seen in its balance sheet of last 3 years.In addition, a study has been performed over the cash flow statement of the SPECIALITY FASHION GROUP LIMITED. According to this study, it has been investigated that numerous changes have occupied the place into the cash management activities of the company from 2014 and 2015 in the year of 2016. It has been investigated that company’s operating cash flow statement is expressing an enhancement from 2015. In addition, the cash inflow from investing activities has been reduced by 23.08%. More, the cash flow from financing activities express about the stability in the cash outflow of the company. The total increment in the net cash inflow of the company from 2015 is -275%

Financial analysis report6which depict that the performance of the cash inflow of the company has been lowered from last 2 years (Kaplan and Atkinson, 2015). The company is required to make the changes into its activities and performance to manage the cash inflow of the company and the performanceof the company. Vertical analysis:Vertical analysis is a method of analyzing the financial statement. This study of vertical analysis express about various changes into the financial statement especially in a period. This investigation is useful for the company and the analyst to evaluate the trend condition and situation of SPECIALITY FAHSION GROUP LIMITED. In this analysis, normally a year’s figures are compared with the total assets, total revenue etc. For this analysis, data are analyzed according to the base activity and figures of the company. Changes are normally expressed in the form of percentage. The below is the formula of horizontal analysis:= (changes in the Dollar of a particular activity / changes in the dollar of base activity) *100 (Du and Girma, 2009)Further, the study of vertical analysis over the balance sheet and cash flow statement has been presented in SPECIALITY FASHION GROUP LIMITED to analyze the company’sperformance in caparison of total assets and total liabilities in income statement and total cashflow in cash flow statement. According to this analysis, it has been found that numerous changes have occupied the place into performance of 2016’s financial figures. The current assets of the company are 53.39%, 53.24% and 51.79% from last 3 years. The balance sheet study depict that few positive changes have taken place into the performance of the company (Gitman and Zutter, 2012). Cash flow statement also depict that the performance of the company have been enhancedFinancial ratio analysis:At the end, for investing over the performance, viability and stability of the organization, ratio analysis has been conducted. It has been analyzed through this paper that what is the position of the company in context of liquidity, profitability, efficiency and capitalstructure. The study of ratio analysis and calculations are given below:Liquidity ratio:

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