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ACC/ACF5903 - Critical Use of Accounting Information

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Added on  2019-10-31

ACC/ACF5903 - Critical Use of Accounting Information

   Added on 2019-10-31

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Running head: ACF5903ACF5903Name of the studentName of the universityAuthor note
ACC/ACF5903 - Critical Use of Accounting Information_1
1ACF5903Table of ContentsPart 1.....................................................................................................................................................2ROA computation for Inabox Group Limited........................................................................................2Items form asset category......................................................................................................................2Items from income statement.................................................................................................................3Performance rating of the company.......................................................................................................3Reference...............................................................................................................................................5
ACC/ACF5903 - Critical Use of Accounting Information_2
2ACF5903Part 1The ROA or return on assets indicates the profitability of a company with regard to the totalassets. ROA reveals the efficiency of the management regarding employment of its asset forgeneration of earnings (Tiedemann, Johansson & Wikner, 2016). The ROA is computed throughdividing the profit value by the total asset of the company. ROA indicates the amount of earningsgenerated from the assets. However, the ROA of public companies are highly dependent on industryand can vary considerably.ROA computation for Inabox Group LimitedROA formula201420152016Net income / Total assets6.87%-1.00%2.37%It can be identified from the above table that there is no specific trend of return on the assetsof the company. The ROA of the company was 6.87% for the year ended 2014. However, as for theyear ended 2015 the company could not generate any positive income that led to negative ROA forthe company. Nevertheless, the company was able to improve its position during 2016 and the ROAreached to 2.37% (Annual Reports - Inabox Group, 2017). Obviously, higher the return better is the company’s position to with respect to the investor’saspect as it indicates that the company is managing its resources efficiently for generating wealth(Guo & Wang, 2016). The positive ROA reveals that the profit of the company is in upward trend.However, the negative ROA indicated that the company is not able to earn sufficient income out of itsassets.Items form asset categoryAsset name2014($’000)2015($’000)2016($’000)Property, plant and equipment57340912067Intangibles 4,33615,87413,976
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