Financial Analysis of Crown Resorts Limited and Comparison with Skycity Entertainment Group

RUNNING HEAD: BUSINESS FOR ACCOUNTING
Financial analysis

Business for accounting i
Executive Summary
This report provides a brief summary about the financial performance and position of Crown
Resorts for 2016 and 2017. It deals with the ratio and horizontal analysis of company’s past
two years financial statements. The ratio analysis performed suggested that Crown has
improved and increased its liquidity, profitability and efficiency in the last year as compare to
2017. Furthermore, the horizontal analysis reflected that though the revenue and gross
income of the company has reduced but it was able to maintain its profit by reporting a
significant hike in its net profit margin last year. Crown’s horizontal analysis is compared to
the analysis of Skycity Entertainment Group, another company operating in the same
industry. It is observed that the overall performance of Crown Limited is better than Skycity.

Business for accounting ii
Contents
1.0 Introduction..........................................................................................................................1
1.1 Purpose........................................................................................................................1
1.2 Scope...........................................................................................................................1
1.3 Limitations........................................................................................................................2
1.0 Company Overview........................................................................................................2
3.0 Ratio Analysis......................................................................................................................3
3.1 Current Ratio....................................................................................................................3
3.2 Gross Profit Margin..........................................................................................................3
3.3 Return on Equity...............................................................................................................4
3.4 Return on Assets...............................................................................................................5
3.5 Days Inventory Ratio........................................................................................................5
4.0 Analysis and Comparison....................................................................................................6
4.1 Horizontal Analysis..........................................................................................................6
References..................................................................................................................................9

Business for accounting 1
1.0 Introduction
Financial analysis is the procedure of evaluating and analysing the financial statements of the
company. It deals with the examination of accounts prepared by the organization at the end of
the accounting period. Generally, the analysis conducted is used by the investors and
management to make correct and appropriate decisions regarding the concerned entity
(Fridson and Alvarez, 2011). The report contains ratio and horizontal analysis of Crown
Resorts Limited and then compares the performance of the company with its competitor
Skycity Entertainment Group.
1.1 Purpose
The purpose of the report is to provide insights to its users about the financial performance
and position of Crown Resorts for the past two years. Ratio analysis is conducted with an
objective to know about the position of the firm in a nutshell. Various categories of ratios are
calculated on the basis of quantitative data presented in the annual report of Crown Resorts.
The main aim of horizontal analysis is to reflect the changes occurred in some specific items
of company’s financial statements over the years 2016 and 2017. The changes are then
compared with the analysis of Skycity for the same number of years.
Overall the objective of financial analysis is that it helps the managers, investors,
shareholders and other users to have an idea about the liquidity and profitability of Crown
Resorts.
1.2 Scope
The report covers the financial data of Crown Limited for the past two years and it analyses
the liquidity, profitability and efficiency of the company for 2016 and 2017. Furthermore, it
examines the changes in the specific items of entity’s income statement such as sales, net