This document is a corporate finance analysis of JB Hi-Fi, which provides an instance where the non-current assets of JB Hi-Fi were revalued upwards or downwards. The document also includes a recommendation and reference and bibliography. The subject is corporate finance and the document type is an analysis. The assignment type is not mentioned.
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Running head:CORPORATE FINANCE ANALYSIS Corporate Finance Analysis Name of the Student: Name of the University: Authors Note:
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CORPORATE FINANCE ANALYSIS 1 Table of Contents Providing an instance where the non-current assets of JB Hi-Fi were revalued upwards or downwards:................................................................................................................................2 Recommendation:......................................................................................................................4 Reference and Bibliography:......................................................................................................5
CORPORATE FINANCE ANALYSIS 2 Providing an instance where the non-current assets of JB Hi-Fi were revalued upwards or downwards: From the evaluation of the annual report, it could be identified that non-current assets of JB Hi-Fi, as a relatively revalued upwards during the face value of 2017. The revaluation process was relatively conducted on the intangible assets of the company, which was seen in the financial report section. The other components of the non-current assets were relatively not increasing in value, Other than the intangible assets of the organization, which increased exponentially during the fiscal year of 2017. The above figure directly indicates the level of increment in Goodwill that was generated during the fiscal year of 2017. This revaluation process was relatively conducted, due to the addition in business combinations of the organization. The valuation of goodwill relatively allows the organization to increase and boost the non-current assets in there balance sheet which increases the total assets.Seay (2014) stated that with the help of revaluation process the organization is able to understand the current market value of their non-current, which in turn allows the management to make adequate decisions.
CORPORATE FINANCE ANALYSIS 3 The figure relatively indicates the overall increment in Goodwill valuation of JB Hi-Fi that has been conducted during the fiscal year of 2017. The report highlights the overall increment of boost in the goodwill conditions of JB Hi-Fi during the fiscal year. From the evaluation, it could be understood that during the financial year of 2017 JB Hi-Fi is relatively in code for you good well known as โThe Good Guysโ, which was valued at 566.9 million. This relevant valuation directly boosted the Goodwill composition of JB Hi-Fi from a mere 49.5 million to 736.3 million in 2017.Yao, Percy and Hu (2015) argued that without adequate revaluation process organizations are not able to understand their current market value.
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CORPORATE FINANCE ANALYSIS 4 The above figure depicts the overall measurement or methods that have been used for evaluating the Goodwill conditions of JB Hi-Fi. Moreover, the company directly utilizes impairment testing, recognition and Measurement to determine the adequate and correct value of the goodwill. This has a relatively help in adequately determining the current value oftheGoodwillwhichwasrepresentedintheannualreport.Therecognitionand Measurement method relatively utilizes the brand names premium locations and rights to profit share to determine the current Goodwill conditions of the organization.Furthermore, with the help of empowerment testing amortization of the intangible assets are relatively conducted to determine their actual value. Recommendation: JB Hi-Fi should continue with the revaluation process, as it helps in determining the fair value of the organization, which was seen during the fiscal year of 2017. This process will eventually help the organization to project their current valuation to the investors, which can be used for valuing their actual share price.
CORPORATE FINANCE ANALYSIS 5 Reference and Bibliography: Jbhifi.com.au.2019.[online]Availableat: https://www.jbhifi.com.au/Documents/2017%20Annual%20Report.pdf[Accessed8Jan. 2019]. Seay, S.S., 2014. The economic impact of IFRS-a financial analysis perspective.Academy of Accounting and Financial Studies Journal,18(2), p.119. Yao, D.F.T., Percy, M. and Hu, F., 2015. Fair value accounting for non-current assets and audit fees: Evidence from Australian companies.Journal of Contemporary Accounting & Economics,11(1), pp.31-45. Zakaria, A., Edwards, D.J., Holt, G.D. and Ramachandran, V., 2014. A Review of Property, Plant and Equipment Asset Revaluation Decision Making in Indonesia.Mindanao Journal of Science and Technology,12.