Analysis of Corporate Accounting and Strategies for Clean Seas Seafood Limited

The assignment provides a detailed analysis of the corporate accounting practices of Clean Seas Seafood Limited, including an examination of their financial statements and a critical evaluation of their strategy. It highlights the importance of effective capital structure development and provides recommendations for improving the company's financial performance.

CORPORATE
ACCOUNTING

EXECUTIVE SUMMARY
Corporate accounting is known for special branch of accounting which developed by
companies in order to measure their financial capabilities. The present assessment is developed
to analyse financial capabilities of companies. Such companies are Clean Seas Seafood limited,
Bellamys Australia limited and Elders limited. Calculation of change in equity is to be prepared
in this report for reflecting every item of equity in order to develop effective understanding of
change over past three years with comparative analysis of debt and equity. Lastly, calculation of
cash flow is provided.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
EQUITY AND LIABILITY............................................................................................................4
1. Calculation of each item of equity with understanding of three chosen companies .........4
2. Calculation of each item of liability with understanding of three chosen companies........6
3. Comparative analysis of debt and equity of three chosen companies................................8
CASH FLOW STATEMENT..........................................................................................................9
4. Explanation of each item of cash flow with understanding of three companies................9
5. Calculation of cash flow statement with understanding of three chosen companies.......10
6. Comparative analysis of chosen three companies............................................................11
OTHER COMPREHENSIVE INCOME STATEMENT..............................................................11
7. Explanation of Items which stated in other comprehensive income for each company. .11
8. Explanation of reason for not reporting items in income statement.................................12
9. Calculation of other comprehensive income statements to evaluate performance of
managers of companies........................................................................................................12
10. Explanation of including OCI for measuring performance of managers of company...13
ACCOUNTING FOR CORPORATE INCOME TAX..................................................................13
11. Tax expenses which shown in financial statements of selected companies...................13
12. Calculation of effective tax rate of selected companies.................................................13
13. Comment on deferred tax assets and liabilities which recorded in balance sheet of selected
companies.............................................................................................................................14
14. Evaluation of changes in deferred tax assets/ liabilities.................................................14
15. Calculation of cash tax amount of all three companies using book tax, change in deferred
tax asset and liabilities..........................................................................................................15
16. Calculation of the cash tax rate of all three companies..................................................16
17. Difference between cash tax rate and book tax rate.......................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Corporate accounting is known for special branch of accounting which develop for
preparing accounting statements of company such as preparation of final accounts, cash flow
statement. It is also used to analyse and interpret financial results and for accounting of
amalgamation, absorption, etc. The present assessment is developed to analyse financial
capabilities of companies. Such companies are Clean Seas Seafood limited which operates in
aquaculture industry through 2 segments that is Finfish sales and Tuna operations. Bellamys
Australia limited which deals in producing and marketing organic food and formula of products
for babies, and Elders limited which deals in providing products based on agriculture business.
Firstly, calculation of change in equity is to be prepared in this report for reflecting every
item of equity in order to develop effective understanding of change over past three years with
comparative analysis of debt and equity. Further, calculation of cash flow of the selected
companies will be prepared in order to comparatively analyse financial capabilities of
organisations. Lastly, in this assessment accounting of effective cash tax rate will be provided in
order to develop better understanding of performance of companies in business market.
EQUITY AND LIABILITY
1. Calculation of each item of equity with understanding of three chosen companies
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Clean seas seafood limited
Share Capital 157736 165998 5% 165998 182345 10%
Share rights reserve 0 172 100% 172 661 284%
accumulated losses -114819 -114617 0% -114617 -111237 -3%
Total Equity 42917 51553 20% 51553 71769 39%
Items of changes in equity are:
Share capital: which is known as part of capital of company that arise because of issue of shares.
Share rights reserves: which is a dividend of subscription rights in order to buy additional
securities in company.

Accumulated losses: which reported as negative retained earnings in balance sheet.
From the above calculation, it is analysed that in 2017, Clean seas seafood ltd. has
reduced its accumulated losses with (114617) and increase its share capital with 165998. In
2018, entity reduced its accumulated deficit with (111237) and increased its share capital with
182345. This result in change in equity with 20% in 2017 and 39% in 2018. As compared to
2017, there have been an increase in share capital in 2018 which indicates that company created
more investment. In case with share right reserves, compared to 2016 it gets decreased which
indicate that stocks have been over issued.
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Bellamys Australia limited
Issued capital 40216 53795 34% 53795 120870 125%
Reserves 2829 5635 99% 5635 11843 110%
Retained profits 40176 31829 -21% 31829 74645 135%
Total Equity 83221 91259 10% 91259 207358 127%
Items of changes in equity are:
Issued capital: Known for share capital which issued of shareholders of the company.
Reserves: type of amount which retained by organisations for their future use.
Retained profits: It is a type of profit which kept in company rather than paid to shareholders as
dividend.
From the above calculation, it is analysed that in 2017, Bellamys Australia Ltd. has
increased its issued capital and reserves with 53795 and 5635 and its retained profit with 31829.
In 2018, entity increased its issued capital and reserves with 120870 and 11843 and its retained
profit with 74645. This result in change in equity with 10% in 2017 and 127% in 2018 (Annual
Report of Bellamys Australia Limited, 2018). issued capital increases in 2018 which indicate that
company have issued new shares with its own fund.
Particulars 2016 2017 % change in 2017 2018 % change in

2017 2018
Elders limited
Contributed equity 1422382 142225
5
-0.01% 1422255 1426835 0%
Hybrid equity 36830 0 -100% 0 0 0
Reserves -29063 -27596 -5% -27596 -26034 -6%
Retained earnings/
accumulated losses
-
1246064
-
113911
8
-9% -
1139118
-
1094027
7
860%
Total Equity 184085 255541 39% 255541 -9539476 -3833%
Items of changes in equity are:
Contributed equity: it is known as total value of stock which brought by shareholders directly
from company.
Hybrid equity: it is a type of mutual funds which invest in both debt and equity.
Retained earnings: It is a type of profit which kept in company rather than paid to shareholders
as dividend.
From the above calculation, it is analysed that in 2017, Elder's Ltd. has increased its
contributed equity with 142225 and reduced its retained profit with (1139118). In 2018, entity
increased its contributed equity with 1426835 and reduced its retained profit with (10940277).
This result in change in equity is with 39% in 2017 and (3833)% in 2018. Increase in reserve
states that company might have issued stock in excess of par value. Increase in accumulated
losses states that company has bear a loss through its business operations.
2. Calculation of each item of liability with understanding of three chosen companies
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Clean seas seafood limited
Trade and other payables 3101 4083 32% 4083 6504 59%
Borrowings 3063 330 -89% 330 622 88%

Provisions 545 726 33% 726 862 19%
current liabilities 6709 5139 -23% 5139 7988 55%
Borrowings 68 832 1124% 832 1727 108%
Provisions 189 132 -30% 132 178 35%
Non-current liabilities 257 964 275% 964 1905 98%
Total 6966 6103 -12% 6103 9893 62%
Above table interpret that major changes in liabilities is because of borrowings (1124%)
and after with non-current liabilities (275%) in 2017. In 2018, major changes in liabilities is
because of borrowings (108%) and non-current liabilities (98%). This result in change in liability
with (12%) in 2017 and (62%) in 2018. This analyse that as compared to year 2018, company is
more financially sound in 2017. Borrowings in both year get increases because company might
have purchase some equipment and other needed assets. Increase of trade and other payable
might indicate purchase of additional inventory. Increased non-current liability indicts that
company has purchased costly fixed assets.
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Bellamys Australia limited
Trade and other payables 48373 37726 -22% 37726 69108 83%
Borrowings 113 25264 22258% 25264 62 -100%
Provisions 328 2329 610% 2329 1663 -29%
Derivatives 807 34 -96% 34 232 582%
Current tax liabilities 10495 0 0% 0 2344 0%
current liabilities 60116 65353 9% 65353 73409 12%
Borrowings 18 0 -100% 0 0 0%
Provisions 146 29 -80% 29 45 55%
Non-current liabilities 164 29 -82% 29 45 55%
Total 60280 65382 8% 65382 73454 67%

It is analysed from above table that major changes in Bellamys Australia limited is
because of borrowings (25264) and trade and other payables (37726) in 2017 and in 2018,
changes in because of trade and other payables (69108). This result in change in liability with
8% in 2017 and 67% in 2018. This analyse that as compared to year 2018, company is more
financially sound in 2017. Increase of trade and other payable might indicate purchase of
additional inventory. Decrease in provision states that company used some amount money for
other business operations. Increase change in liability in 2018 shows that company does not have
sound financial capabilities.
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Elders limited
Trade and other payables 331565 355539 7% 355539 371907 5%
Interest bearing loans and
borrowings
121300 130482 8% 130266 184001 41%
Current tax payables 1090 109 -90% 109 1166 970%
Provisions 42661 49077 15% 49077 45856 -7%
current liabilities 496616 535207 8% 534991 602930 13%
Other payables 3820 5343 40% 5343 12668 137%
Interest bearing loans and
borrowings
0 0 0% 216 1074 397%
Provisions 4349 3924 -10% 3924 4998 27%
Non-current liabilities 8169 9267 13% 9483 18740 98%
Total 504785 544474 8% 544474 621670 14%
It is analysed from above table that major changes in Elders limited is because of current
liabilities (535207) and with non-current liability (9627) in 2017 and in 2018, changes in because
of current liabilities (602930) and non current liability (18740). This result in change in liability
with 8% in 2017 and 14% in 2018. this analyse that company does not have effective financial

capabilities (Annual Report of Elders Limited, 2017). increase current tax payable shows that
company did not have paid its income because of transaction which tool place in current period.
Increase in interest bearing loan and borrowing indicate that company might have purchase some
equipment and other needed assets.
3. Comparative analysis of debt and equity of three chosen companies
Particular
s
Clean seas
seafood
limited
Debt equity
position
Bellamys
Australia
Ltd
Debt equity
position
Elders
Ltd
Debt
equity
position
Debt 9893 12% 73454 26% 621670 -7%
Equity 71769 88% 207358 74% -9539476 107%
Total 81662 100% 280812 100% -8917806 100%
The above table is evaluating comparative analysis of capital structure of selected
companies. The ideal structure is 40:60 for organisations but here limited debt is of Elders Ltd.
In comparison to Elder Ltd., other companies has huge debt comparatively to equity as they
should control their liability for effective capital structure.
CASH FLOW STATEMENT
4. Explanation of each item of cash flow with understanding of three companies
Primary purpose of establishing cash flow statements in business is to find information
regarding cash receipts, cash payments and net change in cash which arises because of operating,
investing and financing activities (Ahiadorme, Gyeke-Dako and Abor, 2018).
Bellamys Australia limited: It is analysed that organisation have generated effective cash
through cash receipt from customer, suppliers and employees (Annual Report of Bellamys
Australia Limited, 2017). With its investing activities, it is comprised that from sale of property,
plant and equipment and purchase of property, plant and equipment effective asset will get
developed for improving business operations. With financing activities, proceed from share
issue, borrowings etc. which indicate sound financial capability of company.

Clean Seas Seafood limited: In its operating activity, receipts from customer, payment to
supplier, payment for feed and employees included which indicate that company has faced loss
because of huge payment to its suppliers and employees with payment to government grant as
well (Bhasin, 2015). financing activity include gross proceeds from issue of shares, share issue
expenses, repayment of borrowings.
Elders limited: It analysed that company has done a huge payment to its suppliers,
employees and also paid an interest and other cost of finance. Investing activity comprise that
entity has provided payment for property, plan, equipment and for intangibles too (Miao Teoh
and Zhu, 2016).
5. Calculation of cash flow statement with understanding of three chosen companies
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Clean seas seafood limited
Net Cash Flow from
operating activity
-2354 -3324 41% -3324 -6815 105%
Net cash flow from investing
activity
-1384 -2439 76% -2439 -4854 99%
Net cash flow from financing
activity
2823 5689 102% 5689 16679 193%
Net Cash -915 -74 -92% -74 5010 -6870%
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Bellamys Australia limited
Net Cash Flow from
operating activity
8895 -45718 -614% -45718 68241 -249%

Net cash flow from investing
activity
-2402 -472 -80% -472 -17981 3710%
Net cash flow from financing
activity
-6230 31173 -600% 31173 19898 -36%
Net Cash 263 -15017 -5810% -15017 70158 -567%
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Elders limited
Net Cash Flow from
operating activity
48676 81599 68% 81599 -12132 -115%
Net cash flow from investing
activity
-27292 -42011 54% -42011 -38391 -9%
Net cash flow from financing
activity
13098 -39553 -402% -39553 26978 -168%
Net Cash 34482 35 -100% 35 -23545 -67371%
6. Comparative analysis of chosen three companies
Clean seas seafood
limited
Bellamys Australia
limited
Elders limited
Particulars 2017 2018 2017 2018 2017 2018
Net Cash Flow from
operating activity
41% 105% -614% -249% 68% -115%
Net cash flow from
investing activity
76% 99% -80% 3710% 54% -9%
Net cash flow from
financing activity
102% 193% -600% -36% -402% -168%

From the above calculation it is analysed that highest cash has been generated by Clean
seas seafood company through its operating activity in 2018. Through investing activity huge
cash is generated by Bellamys Australia Ltd. and from financing activity, clean seas seafood Ltd
has used the highest cash (Harrison and van der Laan Smith, 2015).
OTHER COMPREHENSIVE INCOME STATEMENT
7. Explanation of Items which stated in other comprehensive income for each company
 Clean Seas Seafood Limited:
According to annual report of entity, it is analysed that company has bear a loss from its business
operation (Annual Report of Clean Seas Seafood Limited, 2017). A clear indication of facing loss
in financial year also predicted when there is a negative operating activities. This reason predicts
reason for not preparing other comprehensive income as this will not impact profit which
attributable to shareholders.
 Bellamys Australia Ltd:
It has statement of other comprehensive income which consist of changes in fair value of cash
which helps against altering value of liabilities and exchange different arising from transaction
which include foreign operations and foreign currency transactions in financial statements
(Bauman and Shaw, 2016).
 Elders Ltd:
Entity have also prepared other comprehensive income in order to record its foreign operations
and foreign currency transactions. It consists of exchange difference which arising from
transactions (Annual Report of Elders Limited, 2018).
8. Explanation of reason for not reporting items in income statement
These are the values which cannot be realised until they get sold and any type of
adjustment which done in the middle of year will be recognised in this statement. It is also not
recorded in income statement because of accounting standards as they are not contributed in net
margin. On the other hand, it is directly claimed as other margin where such types of transactions
are recorded as investments because of which this is eliminated from financial statement as it
will realise profit and loss.

9. Calculation of other comprehensive income statements to evaluate performance of managers
of companies
 Clean Seas Seafood Limited:
While measuring performance of managers of Clean Seas Seafood limited, it is clearly
analysed with their annual report that company did not maintain its other comprehensive income
statement as it does not impact profit attributable to its shareholders.
 Bellamys Australia Ltd:
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Bellamys Australia limited
Profit 38328 -809 -102% -809 42816 -5392%
OCI
Changes in fair value of
cash
-565 540 -196% 540 45 -92%
exchange difference arising
from transaction
-599 -447 -25% -447 -843 89%
 Elders Ltd:
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Elders limited
Profit 54239 118571 119% 118571 73927 -38%
OCI
exchange differences on
translation of foreign
operations
-818 -1211 48% -1211 -328 -73%
From above calculation, alteration in profit of organization is view from outside of its
core operations and provides volatile information has been allowed with flow of shareholder's
equity. If this will be included in profit and loss statement, then this will impact profit
attributable to shareholder's equity in positive aspect.

10. Explanation of including OCI for measuring performance of managers of company
This statement develops to provide information on company's profit which are outside of
core operations to shareholder's equity. Other comprehensive income statement considered as
expensive in comparison to statement of profit and loss but this is prepared to analyse daily
operations with huge consideration of the business. It provides information which is based on the
essential items which needs to develop in order to measure performance of the managers.
ACCOUNTING FOR CORPORATE INCOME TAX
11. Tax expenses which shown in financial statements of selected companies
2018
Particulars Clean seas seafood
limited
Bellamys Australia
limited
Elders limited
Income tax expense nil -18380 19342
12. Calculation of effective tax rate of selected companies
2018
Particulars Clean seas seafood
limited
Bellamys Australia
limited
Elders limited
Income tax expense nil -18380 19342
Earning before interest
and tax
nil 60269 61698
Effective tax rate nil -30% 31%
It is analysed from calculation that Elder's Ltd has effective tax rate as compared to other
industries.

13. Comment on deferred tax assets and liabilities which recorded in balance sheet of selected
companies
Deferred tax asset is a type of asset which included in balance sheet of company in order
to reduce its taxable income. It raised in business when company has overpaid taxes and has paid
tax in advance. It is prepared with the principle of prudence and shown under the head of non-
current assets in balance sheet of company (Watson, 2018).
Deferred tax liability is the type of tax which is assessed and become due in current
period but it is not been paid because of difference in timing between tax accrued and paid. It is
subject to payment of minimum alteration tax which shown under the head of non-current
liabilities in balance sheet (Unerman, Bebbington and O’dwyer, 2018).
14. Evaluation of changes in deferred tax assets/ liabilities
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Clean seas seafood limited
Deferred tax asset 0 0 0 0 0 0
Deferred tax liability 0 0 0 0 0 0
It is clearly analysed that Clean seas seafood ltd. Did not have maintained any type of
deferred tax assets/liabilities.
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Bellamys Australia limited
Deferred tax asset 1500 3537 136% 3537 6798 92%
Deferred tax liability 0 0 0% 0 0 0%
Particulars 2016 2017 % change in
2017
2017 2018 % change in
2018
Elders limited
Deferred tax asset 64126 59382 -7% 59382 78014 31%

Deferred tax liability 0 0 0% 0 0 0.00%
15. Calculation of cash tax amount of all three companies using book tax, change in deferred tax
asset and liabilities
 Clean Seas Seafood Ltd.
By considering annual accounts of the company, it is analysed that in year 2018, company has
faced loss because of that they did not pay their corporate tax (Annual Report of Clean Seas
Seafood Limited, 2018) It is also analysed that company already have estimated about the loss
which they will bear by considering negative operating activities.
 Bellamys Australia Ltd.
Bellamys Australia ltd.
Particulars 2017 2018
Total tax provision 131 18380
change in deferred tax asset -2037 -3261
change in deferred tax liability 0 0
unleverd cash tax -1906 15119
 Elders Ltd.
Elders ltd.
Particulars 2017 2018
Total tax provision -4109 -19342
change in deferred tax asset 4744 -18632
change in deferred tax liability 0 0
unleverd cash tax 635 -37974
16. Calculation of the cash tax rate of all three companies
 Clean seas seafood Ltd.
According to annual report, company has created a loss by which it is impossible to calculate its
cash tax rate.
 Bellamys Australia Ltd.

Bellamys Australia ltd.
Particulars 2017 2018
Total tax provision 131 18380
change in deferred tax asset -2037 -3261
change in deferred tax liability 0 0
unleverd cash tax -1906 15119
EBIT 593 60269
Cash tax rate -321% 25%
 Elders Ltd.
Elders ltd.
Particulars 2017 2018
Total tax provision -4109 -19342
change in deferred tax asset 4744 -18632
change in deferred tax liability 0 0
unleverd cash tax 635 -37974
EBIT 118775 61698
Cash tax rate 1% -62%
In nutshell:
Cash tax rate 2017 2018
Clean seas seafood ltd. Nil Nil
Bellamys Australia ltd. -321% 25%
Elders ltd. 1% -62%
17. Difference between cash tax rate and book tax rate
Cash Tax Rate Book Tax Rate
It is the type of tax which is directly paid to
government authorities and is based on the
amount of income which reported by company
Book tax rate is the type of tax which reflected
in books of organisation. In order to evaluate
this tax rate, books of accounts of the company