Corporate Accounting: Analysis of Coca Cola Amatil and Commonwealth Bank of Australia

This article provides an analysis of the financial position of Coca Cola Amatil and Commonwealth Bank of Australia through a comparative analysis of their owners' equity, cash flow statements, and more.

Running Head: CORPORATE ACCOUNTING 0
Corporate Accounting

Running Head: CORPORATE ACCOUNTING
Table of Contents
Introduction................................................................................................................................2
Owners’ Equity..........................................................................................................................2
Ordinary Share capital............................................................................................................3
Other Equity Instruments.......................................................................................................3
Reserves..................................................................................................................................4
Retained profits......................................................................................................................4
Comparative Analysis................................................................................................................4
Cash flow statements..................................................................................................................5
Operating Activities................................................................................................................5
Income statement.....................................................................................................................15
Accounting for Corporate Income Tax....................................................................................17
References................................................................................................................................21

Running Head: CORPORATE ACCOUNTING
Introduction
Coca Cola Amatil belongs to the beverage industry and the Commonwealth Bank of
Australia is serving under the banking industry. Currently the companies are operating at the
revenue of the A$9.12 billion and in case of the commonwealth bank of Australia the revenue
is A$2.005 billion for the year 2017 respectively (Coca Cola Amatil, 2017). The Coca Cola
Amatil is basically engaged in the business of the non-alcoholic drink and the
Commonwealth bank of Australia is engaged in the business of providing the financial
services to its customers (Commonwealth bank of Australia, 2018).
Coca Cola Amatil is the pioneer in the selling of the beverages and there are endless
opportunities with the customers and the innovation of the products and also makes sure that
the company is delivering the right product to the communities. The Coca Cola Amatil
recently launched the platform full of possibilities which are supporting the indicative start
up. The Commonwealth bank of Australia is the bank which is engaged in the financial and
the advisory services to the customers. The interest rate is at 4.32% in case of the deposits
and this is the real way to generate the income.
Owners’ Equity
Shareholder's Equity 2017 2017
Commonwealt
h bank
Coca Cola
Share Capital
Ordinary Share
capital 34971 1920
Other Equity

Running Head: CORPORATE ACCOUNTING
Instruments
Reserves 1869 262.5
Retained profits 26330 -620.7
I)
Ordinary Share capital
The ordinary share capital of the company is that amount which is brought by the promoters
of the business in the organisation in order to get the number of shares. The number of share
is given to the promoters after the capital amount has been brought in. The ranking of the
ordinary shares are done after the preference shares. As can be observed form the table above
the ordinary share capital of the Coca Cola Amatil is $1920 & that of the Commonwealth
bank is $34971 (Coca Cola Amatil, 2017). The Coca Cola Amatil belongs to the beverage
industry hence the sales volume is mainly through the sale of the products. The
Commonwealth bank belongs to the banking industry & hence the numbers of the shares are
dependent upon the deposits made by the customers. The shareholder capital of the Coca
Cola Amatil has been decreased from $2271.7 to $1920.5 due to the sale of the shares & the
payment of the accumulated losses which also decreased from $720.3 to $620.7 (Coca Cola
Amatil, 2017).
On the other hand the ordinary share capital of the Commonwealth bank of Australia has
increased from $33845 to $34971 as the more capital has been brought up by the promoters
in the organisation.
Other Equity Instruments
The other Equity Instrument is the document which generally is treated as the document that
presents the legal evidence to the company & provides the ownership right in the firm in

Running Head: CORPORATE ACCOUNTING
return for the share certificate given to the shareholders. The share certificates are given to
the company & similarly they are used by the shareholders of the company to fund the
business (Collins, Hribar & Tian, 2014).
Reserves
The reserve is a group of the funds which has been kept aside by the company so that it can
be used in the later times by the company for the other important purposes. The reserves of
the Coca Cola Amatil have been used by the company to set off the accumulated losses of the
last year of 720.3 (Coca Cola Amatil, 2017). In the ends the balance of the reserves has been
262.5 for the year 2017. The reserves of the Commonwealth bank are A$1869 & they have
been decreased in case of Commonwealth Bank of Australia due to payment of debts
(Commonwealth Bank, 2018).
Retained profits
The retained profits are shown in the balance sheet under the head shareholders & the equity.
The retained profits are the amount of the surplus that the company has gained after the
amounts earned from sale of the products & the services. The retained earnings are used by
the company to pay the dividends & the future liabilities. The increase retained earnings
means the companies are stable & profitable. Currently the retained earnings of the Coca
Cola Amatil is the negative figure of $(620) & that of the Commonwealth Bank of Australia
is $26330 (Creed & Gemmell, 2017).
II)
Comparative Analysis
The near examination of the investor’s equity of both the organizations exhibits the budgetary
position of the organization. The above components decide how much the proprietors has put

Running Head: CORPORATE ACCOUNTING
in the form of the resources into the business & how they are performing in contrast with the
previous years & the competitors. The current total share capital of the Coca Cola Amatil is
$1561.8 & that of the Commonwealth Bank of Australia is $63170 (Davis, 2015).
Cash flow statements
Operating Activities
Operating activities are the activities of the business which are specifically identified with the
supply of the products & the administration of the services in the market. These activities are
considered as the central activities of the organization & certain models of such activities are
marketing of the product, distribution of the services & the selling of the complete product.
The activities are basically the part of the direct trading & manufacturing of the materials
(Duska, Duska & Kury, 2018).
III)
Funds from operations
Funds from operations are the sum which is utilized by the l& venture trusts to characterize
the income from their activities. They are ascertained by including back the depreciation
amount & the reduced value after the profit (Merz & Overesch, 2016).
Changes in the Working Capital
The changes in the working capital is the term which is determined when the company
calculates the difference between the assets & the liabilities to get an idea of how the assets
are utilised to pay back the liabilities on time.
Net Operating Cash Flow

Running Head: CORPORATE ACCOUNTING
The amount of the cash when generated through the revenue it brings front the sale of the
goods & the services the amount so generated is termed as the net operating cash flow &
basically reported in the cash flow to assess the items of the capital nature.
Investing Activities
The investing activities in the cash flow statement are recorded in relation to the factor that
the company will get the future benefits from these activities & all the purchase & sale of the
assets are recorded to underst& the financial position of the company.
Capital Expenditures
The capital expenditures are the long term expenses that are incurred in order to attain the
fixed assets to generate the revenue for the firm. The examples of the capital expenditure are
the l&, building, plant & machinery, capital investment & lot more. The main purpose to
record these transactions is as they are going to provide the future benefit to the firm (Bratten,
et al 2016).
Sale of Fixed Assets & Businesses
The sale of the fixed assets though generated the income for the business but yet it is a loss to
the company as the sale of the assets means the company’s machinery or plant is not in the
working condition anymore. The business runs on the machinery & therefore the positive
effect in the cash flow is shown as it is an inflow of cash for the business
Purchase/Sale of Investments
The purchase & sale of the investments are also treated in the same manner in which the
assets are treated & therefore the negative balance is shown in the cash flow statement as
there is an outflow of the cash. The purchase of the investments determines the outflow of the

Running Head: CORPORATE ACCOUNTING
cash and because of the outflow the company is liable to pay the cash. The purchase and the
sale of the investments are present in the cash flow from the financing activities.
Financing Activities
The financing activities basically deal with the transaction of the share capital & the retained
earnings, the balance of the bonds & the debentures & the inflow & the outflow of the cash
accordingly. These kinds of activities help in the expansion of the business & are categorised
as the third set of the transactions (Uwonda & Okello, 2015).
The models of the financing exercises are Total, Common Dividends, Change in Capital
Stock Cash Dividends Paid, Net Change in Long-Term Debt, Repurchase of Common &
Preferred Stock, Sale of Common & Preferred Stock, Proceeds from Stock Options, Cash
Dividend Growth Issuance/Reduction of Debt, Issuance of Long-Term Debt, Reduction in
Long-Term Debt, Other Funds & sources of equity (McInnis, Yu and Yust, 2018).
Sale of the Common and the Preferred stock
The sale of the stock is the inflow of the cash and the same has been recorded in the financing
activity. The company sold the stock lying at the end of the year.
Issuance/ Reduction of the Debt
The debt is issued which means there is an inflow of the debentures and the outflow of the
cash and the reduction of the debt means the sale of the debt and hence this activity is
recorded under the financing activity of the cash flow of the organisation.
Net Change in Cash
The net change in the money mirrors the expansion or decline in the money & the money
counterparts from the beginning stage to the end purpose of a year. The net change is

Running Head: CORPORATE ACCOUNTING
ascertained because of money from working, contributing & the financing exercises (Gordon,
Henry, Jorgensen & Linthicum, 2017).
Free Cash Flow
The free income is estimated by how much measure of the money the organization can
produce subsequent to satisfying for every one of the costs & can be utilized for the
development, profits, & decrease of the obligations & for different purposes (Free cash flow,
2017).
The below cash flow entails that the free cash flow of the Coca Cola Amatil is 295500 & that
of the Commonwealth Bank of Australia the free cash flows are 700. The overall analysis
would suggest the Coca Cola Amatil is better, however due the change in the nature of the
industry it cannot be predicted at this level (Free cash flow, 2017).
IV)
Cash flow Statement Coca Cola Amatil
Particulars 2017 2016 2015
Net Income before Extra ordinaries 678400 466100 393400
Net Income Growth 0.4555 0.1848 0.4458
Depreciation, Depletion &
Amortization 261800 269300 270200
Depreciation & Depletion 231600 241200 242400
Amortization of Intangible Assets 30200 28100 27800
Other Funds -295800 -31800 29400
Funds from Operations 644400 703600 693000
Changes in Working Capital -55200 71200 -66200

Running Head: CORPORATE ACCOUNTING
Income Taxes Payable - - -
Other Accruals - - -
Other Assets/Liabilities -55200 71200 -66200
Net Operating Cash Flow 589200 774800 626800
Net Operating Cash Flow Growth -0.2395 0.2361 0.062
Net Operating Cash Flow / Sales 0.1192 0.1521 0.1226
Capital Expenditures -312200 -303200 -266200
Capital Expenditures (Fixed Assets) -293700 -283500 -246400
Capital Expenditures (Other Assets) -18500 -19700 -19800
Capital Expenditures Growth -0.0297 -0.139 0.0669
Capital Expenditures / Sales -0.0631 -0.0595 -0.0521
Net Assets from Acquisitions -20700 - -
Sale of Fixed Assets & Businesses 152300 28100 29700
Purchase/Sale of Investments -2000 85300 -84900
Purchase of Investments -2000 - -84900
Sale/Maturity of Investments - 85300 -
Net Investing Cash Flow -182600 -189800 -321400

Running Head: CORPORATE ACCOUNTING
Net Investing Cash Flow Growth 0.0379 0.4095 -0.0932
Net Investing Cash Flow / Sales -0.0369 -0.0373 -0.0629
Cash Dividends Paid - Total -345600 -339800 -320700
Common Dividends -345600 -339800 -320700
Change in Capital Stock -351200 - 646800
Repurchase of Common & Preferred
Stk. -351200 - -
Sale of Common & Preferred Stock - - 646800
Proceeds from Stock Options - - 646800
Issuance/Reduction of Debt, Net - - -203700
Change in Long-Term Debt - - -203700
Issuance of Long-Term Debt - - 167600
Reduction in Long-Term Debt - - -371300
Other Funds -200 -200 -
Other Uses -200 -200 -
Net Financing Cash Flow -684500 -438500 122400
Net Financing Cash Flow Growth -0.561 -4.5825 1.1322
Net Financing Cash Flow / Sales -0.1384 -0.0861 0.0239

Running Head: CORPORATE ACCOUNTING
Exchange Rate Effect -62800 -6900 6600
Net Change in Cash -340700 139600 434400
Free Cash Flow 295500 491300 380400
Free Cash Flow Growth -0.3985 0.2915 0.1608
Free Cash Flow Yield -0.0079 - -
Cash flow Statement Commonwealth Bank
Fiscal year is July-June. All values AUD Millions. 2017 2016 2015
Funds from Operations 15800 12389 17215
Funds from Operations Growth 0.2753 -0.2803 0.3469
Changes in Working Capital -14623 -13102 -21698
Net Operating Cash Flow 1177 -713 -4483
Net Operating Cash Flow Growth 2.6508 0.841 -1.618
Net Operating Cash Flow / Interest Income 0.0341 -0.0214 -0.1314
Investing Activities
Capital Expenditures -980 -1097 -1768
Capital Expenditures (Fixed Assets) -477 -602 -1259
Capital Expenditures (Other Assets) -503 -495 -509
Net Assets from Acquisitions - -31 -857

Running Head: CORPORATE ACCOUNTING
Sale of Fixed Assets & Businesses 181 382 515
Purchase/Sale of Investments -271 -25 -
Purchase of Investments -271 -25 -
Sale of investments
Other Sources - - -
Net Investing Cash Flow -1070 -771 -2110
Net Investing Cash Flow Growth -0.3878 0.6346 -0.6407
Net Investing Cash Flow / Interest Income -0.031 -0.0231 -0.0619
Cash Dividends Paid - Total -5366 -6084 -5827
Common Dividends -5366 -6084 -5827
Cash Dividend Growth 0.118 -0.0441 0.0602
Change in Capital Stock -40 -64 4025
Repurchase of Common & Preferred Stk. -95 -98 -1047
Sale of Common & Preferred Stock 55 34 5072
Proceeds from Stock Options 55 34 5072
Issuance/Reduction of Debt, Net - - 3489
Change in Long-Term Debt - - 3489
Issuance of Long-Term Debt - - 102907
Reduction in Long-Term Debt - - -99418

Running Head: CORPORATE ACCOUNTING
Other Funds 27 61 -67
Other Uses - - -67
Other Sources 27 61 -
Net Financing Cash Flow -934 10472 1620
Net Financing Cash Flow Growth -1.0892 5.4642 1.2057
Net Financing Cash Flow / Interest Income -0.027 0.3144 0.0475
Exchange Rate Effect 715 -318 150
Net Change in Cash -112 8670 -4823
Free Cash Flow 700 -1315 -5742
Free Cash Flow Growth 1.5323 0.771 -1.8601
Free Cash Flow Yield -0.0346 - -
V)
From the near examination of both the managing an account organizations which are the
Commonwealth Bank of Australia and the Coca Cola Amatil, the similar investigation is
fundamentally embraced to quantify the monetary connection between the factors more than
at least two detailing period. The most ideal approach to discover the situation in the market
is to complete a similar investigation over a distinct timeframe. Additionally there are
numerous corrupt strategies through which the benefit can be expanded however under the
situation of the income proclamation it isn't conceivable (McInnis, Yu and Yust, 2018).

Running Head: CORPORATE ACCOUNTING
The money related experts not just view the salary explanation, rather they additionally
investigate the income proclamations and every one of the movement, for example, the
income from working exercises, income from contributing exercises and finally income from
the financing exercises (Commonwealth Bank of Australia, 2018). The distinction between
the various years can be accounted for with the assistance of the correlation articulation and
the information is likewise exhibited regarding the rates. Since money is substantial and it
very well may be estimated in this way the money is the metric which will provide
examination between the two associations (McInnis, Yu and Yust, 2018).
Income statement
(Source: Coca Cola Amatil, 2018)

Running Head: CORPORATE ACCOUNTING
(Source: Commonwealth Bank of Australia, 2018)
VI) The comprehensive income is the statement of the income which reflects those income
that are not included in the normal income statement. The comprehensive income of the Coca
Cola Amatil is the $461 & the commonwealth bank is $9952. The comprehensive income of
the company after the net of the income tax in case of the Amatil is the 296.9 & the 9233 in
case of the Commonwealth Bank of Australia. The adjustments of the current in case of the
Coca Cola Amatil is the negative at 141.4 for the year 2017 & the commonwealth bank of
Australia shows the negative amount of (282) & the Equity holders of the bank have also
been reduced from $9510 to $9209 respectively in the year 2017 (Graham & Lin, 2018).
VII) The particulars of the Comprehensive Income statement are not recorded in company’s
income statement or the profit & loss account because there are certain demerits of the profit

Running Head: CORPORATE ACCOUNTING
& loss account. The statement of the comprehensive income is the advanced account in
comparison to the normal income statement as the advanced statement presents the view of
the different incomes & the expenses that cannot be clubbed in the normal income statement
& requires the disclosure separately (Harford, Wang & Zhang, 2017).
VIII) The image above represents the sum of all the special incomes & the expenses of both
the Coca Cola Amatil & the Commonwealth Bank of Australia is 296 & 9233. The changes
are seen when the implementation of the accounting policies has been carried & ultimately it
reflects the comparative analysis of the company (Bao, Billett, Smith,& Unlu, 2018).
The comprehensive income also shows the amount of the other reserve movements & in case
of the Coca Cola Amatil the amount of the reserves are 1.6 that can be sued by the company
to adjust against the losses & other cumulative expenses. In case of the Commonwealth Bank
of Australia the amount of the reserve is not available (Huang, Wang & Tsai, 2016).
IX) No, the comprehensive will not be incorporated into the assessment of the performance
of the managers & the supervisors as these incomes & expenses may occur & may not & in
this manner they are not the unadulterated source or the determinants of the evaluation of the
managers (Creedy & Gemmell, 2017). The managers are assessed on the basis of the work
done & accounted for through their capacity to devise the methodologies & to record the
exchanges accurately. In any case, they will be at risk for their recording & posting of the
entries in the proper accounts & head (McInnis, Yu & Yust, 2018).
Accounting for Corporate Income Tax
Accounting for Corporate
Tax
National
Bank of
Australia
Commonwealt
h Bank of
Australia

Running Head: CORPORATE ACCOUNTING
Tax Expense 148.6 3960
Income tax expense 148.6 3960
Earnings before Tax 609.6 13944
Effective Tax rate 24% 28%
Deferred Tax
Assets/Liabilities (17) 283.8 332
2016 306.3 340
Deferred tax assets increase
Increase/ Decrease 22.5 -8
Income tax provision 63.4 3960
Increase/Decrease in Deferred
Tax 22.5 -8
Total taxes 85.9 3952
Other income 461 5626
Tax paid on other Income 1 16
Unlevered Taxes 85 3936
Earnings Before Income tax 149 13944
Cash Tax Rate 57% 28%
Income Tax Provision 63.4 3960
Deferred Tax 22.5 332
Total Taxes 85.9 4292

Running Head: CORPORATE ACCOUNTING
Interest Income 104.4 17600
Tax paid 0.3 50.0
Cash Tax Amount 86 4242
X) The tax expenses that have been recorded for the last year of both the companies are
A$148.6 & A$3960 respectively for the Coca Cola Amatil & the Commonwealth bank of
Australia (Commonwealth bank of Australia, 2018).
XI) The effective tax rate of Coca Cola Bank & the Commonwealth bank of Australia is at
24% & the 28% respectively & the higher is that of the Commonwealth Bank of Australia.
XII) The deferred tax is the amount of the tax & showcases the temporary difference between
the accounting income & the taxable income. The accounting income is recorded as per the
provisions of the Companies Act & the taxable income is calculated as per the Income tax
Act. The deferred tax asset assists in reduction of the taxable income & it is reported on the
asset side & the deferred tax liability is reported on the liability side to report the amount of
the liability the company is going to pay (Campbell, 2015).
.
XIII) The deferred tax asset of the Coca Cola Amatil was nil & the deferred tax liability of
the company was 22.5 & in case of the Commonwealth Bank of Australia there is a decrease
of A$8 in case of the liabilities (Coca Cola Amatil, 2017).
XIV) The cash tax amount for the Coca Cola Amatil is the 86 only whereas the
Commonwealth bank is A$4242 (Coca Cola Amatil, 2017).

Running Head: CORPORATE ACCOUNTING
XV) The cash tax rate of the Coca Cola Amatil is the 57% & that of the Commonwealth
Bank of Australia is 28% lower in comparison to the Coca Cola Amatil (Coca Cola Amatil,
2017).
XVI) As per the difference between the pre taxable income & the pre taxable income & the
pre taxable book value the cash tax rate seems to be different in such cased as compared to
the book rate of the effective tax rate. The differences are also categorised into the temporary
& the permanent basis, the temporary differences relate dot the cash tax rate & the permanent
difference related to the effective tax rate (Larson, Lewis & Spilker, 2017).
.

Running Head: CORPORATE ACCOUNTING
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https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/
annual-reports/annual_report_2017_14_aug_2017.pdf

Running Head: CORPORATE ACCOUNTING
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Running Head: CORPORATE ACCOUNTING
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