Financial Analysis of Coca Cola Amatil: Bad Debt Methods, Audit Assurance and Quality

COCA COLA AMatil
Financial analysis of Company
Audit assurance and Quality
PC-AS0197
University Name-

Table of Contents
Part-D....................................................................................................................................................2
Bed debt methods.............................................................................................................................2
Introduction...........................................................................................................................................2
Recommendation to investors...........................................................................................................4
Comment on the sustainability report of company...............................................................................4
Conclusion.........................................................................................................................................5
REFERENCES......................................................................................................................................6

Part-D
Bed debt methods
Introduction
With the ramified changes in technology, people are inclined towards using the advance
technologies and system process to make automation in the process. This report has focused
on analysing the sustainability and bad debts of Coca Cola Amatil. The profitability and
liquidity ratio have also analyzed.
Coca Cola Amatil has followed proper bad debt provisional method which is used to analyse
amount of bad debts charged in the books of account and provisional method used to reduce
the bed debt (Ehiedu, 2014). However, the bad debts amount shown in its annual report is
very less and it also kept the provision for the bed and doubtful debts to compensate its bad
debts loss.
Bad debts expenses in 2017 recorded in the balance sheet of company is AUD $ 123456
There is no such method to estimate the bad debts in the books of account but on the basis of
the trend analysis, it could determine the bad debts amount which company could have from
its debtors (Owens, 2018). However, company might also use the credit rating of its clients to
estimate the bad debts booked in its books of account.
The liquidity ratio of Coca Cola Amatil Company has increased to 1.28 points which is .3
points higher as compared to last year data. In addition to this, quick ratio has also increased
to 1.29 points in 2017. This shows that Coca Cola Amatil Company has been increasing its
investment in current assets. This liquidity ratio reflects that company may face issue of high
cost of capital due to tis increased investment in its current assets. It may negatively impact
the business functioning if company does not increase its turnover and profitability (Mwangi,
& Murigu, 2015).