Financial Analysis Essay 2022

Running head: FINANCIAL ANALYSIS
FINANCIAL ANALYSIS
Name of the Student
Name of the University
Author Note

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FINANCIAL ANALYSIS
Introduction
The procedure of financial statement analysis of evaluating the financial statement of
the entity to understand how the entity can perform its activities properly in their industry. It
helps the user to know whether the entity is having stability and liquidity in their books of
account (Blum and Dacorogna 2014). This study helps the shareholders to take proper steps
in regards to entity business activities and able to invest the same in the company operations.
The essay is based upon Bega Cheese Ltd and shows the financial analysis of the
corporation’s annual report.
Overview of the Company
The essay based upon Bega Cheese Ltd, which is engaged in Australia for conducting
its business and it carries its business activities in dairy products (Annualreports.com 2019).
The company was founded in 1899 and had it headquarter in Bega, New South Wales,
Australia. The entity has diversified its business activities in cheese, powdered milk and
cream cheese, it carries its business operates mainly in New Zealand and Australia.
Financial Study of the Business
As per the examintaion of entity income statement, it can see that the there is an
increase in overall revenue of the company which signify that the entity can carry their
business activities properly in their industry (Dahmen and Rodríguez 2014). As in 2017 it
was having 1226663, and in 2018 it is having 1438281 so this show the marketing strategy
which the company has made is working properly, and company can earn the proper amount
of revenue in their business activities.
The gross profit of the entity has also augmented in the current year which signifies
that the entity can have proper amount of business in the industry (Annualreports.com 2019).

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FINANCIAL ANALYSIS
As in 2017 the profit was 154227, and in 2018 it is 271952 as this show a significant increase
in the overall profit of the business.
The net profit shows a diminishing trend which is not a good sign for the entity. As
this denotes that the company is not able to meet the customers need and preference due to
which there is a fall in overall profit of the business (Annualreports.com 2019). The net profit
was 139229 in 2017 and 28768 in 2018, so the entity should change their marketing strategies
to get a proper amount of revenue in the business. It should carry proper market analysis that
will help them to build a proper amount of strategies and help them to have a proper analysis
of the competitors in the entity business.
As per the analysis of entity balance sheet, the current asset of the entity has been
decreased, which signify that the entity is not having a stable liquidity position
(Annualreports.com 2019). The company should have a proper amount of strategy that will
help them to carry their business operation properly as well as helps them to get an increase
in their total current asset.
There is a massive increase in entity non-current asset which is a positive mark for the
company as well as the other user of financial statement. The increase in non-current asset is
due to property, plant and equipment and intangible asset which denotes that company has
invested their sum in the property and plant (Annualreports.com 2019). There is also an
increase in the intangible asset that denotes that the company can have an increase in its
brand value and goodwill. These will also help the entity to get more amount of investment
from the investors in their business activities.
The current liability is not having any significant change that denotes the entity has
not able to increase their debt and also it not able to pay the debt due to which there is no
such change in the entity current liabilities (Seay 2014).

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FINANCIAL ANALYSIS
There is an increase in non-current liability which signifies that the entity has an
increase its overall debt (Annualreports.com 2019). It shows that the entity can expand their
business operation and due to which it has an increase in its overall debt in their financial
reports.
There is an increase in overall equity which denotes that the entity can have an
increase in shareholder value, as well as the entity, has transfer specified amount of profit in
there retained earnings and reserves. This shows that the entity is earning proper amount of
business and due to which the entity can enhance the reserves of the business and show the
same in the annual reports.
As per the cash flow statement of the entity it is not able to have good amount of flow
of cash in the business (Annualreports.com 2019). There is a decrease in the closing cash
balance which has happen due to the cash flow from investing activities as there is a high
amount of cash outflow in this activity and due to which there is a decrease in overall cash
balance in the business.
Conclusion
On a conclusive note, this state about the financial analysis method carries by the user
in regards to the financial report. This analysis helps the user to ascertain the financial health
of the business as well as the efficiency of the management of company. The assignment
based upon the dairy-based company which is Bega Cheese Ltd. The company is based in
Australia and carry its business operation in New Zealand and Australia. The analysis of the
entity financial report has been discussed in the essay and due to which the user can get a
proper view of the entity financial health. The entity is not having proper financial position as
there is a decrease in overall net profit so the entity should carry different marketing
strategies to get more amount of revenue in their business activities. Analysis of balance

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FINANCIAL ANALYSIS
sheet and cash flow statement has also been showing in the essay and based on which the
investor can take necessary decision in regards to entity operations
Reference
Annualreports.com 2019. [online] Annualreports.com. Available at:
http://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_BGA_2018.pdf
[Accessed 27 Sep. 2019].
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