BUS5IAF Introduction To Accounting & Finance | Assignment
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Added on 2020-02-19
BUS5IAF Introduction To Accounting & Finance | Assignment
Added on 2020-02-19
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BUS5IAF Introduction to Accounting & FinanceFinancial Statement AnalysisDATA#3 Limited1 | P a g e
ContentsPart I: Introduction.....................................................................................................................4Part II: Industry Situation and company plans...........................................................................4Part III: Financial Statement Analysis.......................................................................................6A: Statement of financial performance...................................................................................6Gross Profit, Operating Income and net income.................................................................6Trend analysis (horizontal analysis and vertical analysis) of the comprehensive incomestatement form year 2013 to year 2017..............................................................................7Significant changes to the accounting policies while preparing the income statement......9Trend and any item that seems to be different from the industry norms............................9B: Statement of Financial Position.......................................................................................10Analysis of Accounting Equation for past years..............................................................10Trend analysis (horizontal analysis and vertical analysis) of the Balance sheet statementform year 2013 to year 2017.............................................................................................10Accounting Policies in respect to different items presents in the balance sheet...............16Trend and any item that seems to be different from the industry norms..........................17C: Statement of Cash Flow...................................................................................................17Comparison of cash flow from operating activity with past net income..........................17Note on whether company is expanding through the investing activity...........................17Important source of finances for the Data3 Limited.........................................................18Movement of cash flows after comprising all the three activities....................................182 | P a g e
D: Summary of above analysis.............................................................................................18Part IV: Ratio Analysis............................................................................................................18Trends, Strength and Weakness of the company performance measured through ratioanalysis.................................................................................................................................22Part V: Conclusion and recommendations...............................................................................23References................................................................................................................................243 | P a g e
Part I: IntroductionAnalysis of financial statements helps in evaluating the performance of the companyduring the past years and compares them with the current year. In this report financialperformance of Data3 Limited has been evaluated for last five years using the trend analysisand ratio analysis. The head office of the company is located at Brisbane, Australia. The chiefexecutive director of the company is Laurence Baynham. The ending date of lasted financialyear was June, 2017. Data3 Limited is related to the information technology industry andaims to provide the services to the business organization to overcome their data problem andother IT related problems. Some of the major services provided by the company areConsulting services, procurement services, projects handling service, managing the taskservices; and resourcing the human requirement. Company provides their services in wholeof Australia, and Asia Pacific (Company Overview, 2017). The independent auditors of thecompany are Pitcher Partners. As per the auditors financial statements present true and fairpicture of the company financial performance. The most recent price of the company as on 7September, 2017 was AUD $1.82. The last dividend per share for the year 2016-17 was $0.13AUD (Morning Star, 2017).Part II: Industry Situation and company plansData3 Limited belongs to IT services industry and it provides services that is needs byorganizations to handle there data problems and other IT related problems. This industry isgrowing at rapid pace in Australia as well as in Asia Pacific countries. So it is highlyexpected that company will definite expand their business in future years and become theworld strong player in this industry. 4 | P a g e
The long term business plan of the company is to grow the business aspect consultinggroup and leveraging the Data3 Limited. Make the brand name Data3 Popular enough to getinternational business frequently. Improving the health of employees and playing importantrole in sustainable accounting with help of corporate governance (Annual Report, 2016).5 | P a g e
Part III: Financial Statement AnalysisA: Statement of financial performanceGross Profit, Operating Income and net income Particulars2013-062014-062015-062016-062017-06Amount in AUD thousandNet Revenue $771,042.00$833,595.00$870,470.00$983,223.00$1,098,221.00Gross Profit$196,709.00$199,187.00$226,108.00$253,810.00$289,562.00 IncomefromOperation$17,754.00 $10,999.00 $15,389.00 $19,582.00 $22,507.00 Net Profit$12,138.00 $7,524.00 $10,604.00 $13,601.00 $15,809.00 (Annual Reports 2013 to 2017)2013-062014-062015-062016-062017-06$- $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00 $350,000.00 Trend Analysis of Various IncomesGross ProfitIncome from OperationNet ProfitAUDMillion6 | P a g e
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