Accounting for Decision-Making

Running Head: Accounting for Decision-Making
Accounting for
Decision-Making
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Accounting for Decision-Making 1
Contents
Introduction......................................................................................................................................2
Valuation of Financial Ratios..........................................................................................................2
Valuation of Trend Analysis............................................................................................................4
Horizontal Analysis.....................................................................................................................4
Vertical Analysis.........................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7
Appendices......................................................................................................................................9

Accounting for Decision-Making 2
Introduction
The aim of this assessment is to enlighten the reader concerning the details about the company
Bluescope Steel Ltd. BlueScope Steel Ltd. is an organization that produces and sell metal coated
and painted steel building products in the market of Asia, Australia, New Zealand, North
America and internationally in other areas as well. The company operates its scope of business in
five different segments that are Australian Steel products, Building Products Asia and North
America, North Star BlueScope Steel, Buildings North America and New Zealand and Pacific
Steel Products. The company offers varied products like hot and cold rolled coils, steel slabs,
roof and wall claddings etc. The BlueScope Company was initially known as BHP Steel Limited
which further changed its name to BlueScope Steel Ltd. Company in the year 2003. Further, the
below mentioned report highlights details about the financial analysis of the company in the
external environment (Yahoo Finance 2019). Various ratios and trend analysis have been
implemented to attain knowledge of the activities of the company over 5 years. More details
about the paper are discussed below:
Valuation of Financial Ratios
2014
2015
2016
2017
2018
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80
Liquidity Ratios
Quick Ratio
Current Ratio
The liquidity as well as profitability ratio of the company BlueScope limited has been accounted
in the paper to attain true information about the current position and productivity of the

Accounting for Decision-Making 3
organization in the external environment. The liquidity ratio explains the efficiency of the
company to manage the regular working capital requirement in the business. This ratio also
elaborates the capability of the business to timely recompense the bills (Stouraitis 2015).
The current asset ratio of the BlueScope organization elaborates that the liquidity aspects of the
company is adequate. An adequate current asset ratio is 2, while the company is regularly
fluctuating between 1.4 to 1.7. This ratio of the company was minimum in the year 2016 while in
the previous year it regained its pace. Further, the quick ratio of the organization refers to the
ratio that elaborates the assets of the business that can be transformed into cash within 90 days or
a shorter period of time. Generally an adequate quick ratio is 1 while the company is close to it
as the quick ratio of BlueScope in the year 2018 was 0.98. Thus, it can be said that the company
adequate manage the liquidity requirement of the business (BlueScope Ltd 2018).
20142015201620172018
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Net Profit
Asset Turnover
Ratio
Further, profitability ratio in the business environment explains the company’s performance in
the external environment. This ratio is most important ratio for the people who wish to invest in
the company as it explains the profitability of the company. This ratio helps in analysing the
capability of the business to produce earnings over time. Through the graph, it can be clearly
seen that the net profit ratio of the company is continuously exceeding in the market
(MorningStar 2019). The company suffered loss in the year 2014 that was converted into profits
in the succeeding year itself. Higher the net profit ratio, higher the profitability of the company
(Ready Ratios 2019).