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Financial Analysis Report ( ACCT6010 ) | Blackmores Limited

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The University of Sydney

   

Financial Analysis (ACCT6010)

   

Added on  2020-03-04

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ACCT6010, Financial Analysis of Blackmores Limited’ has been carries has carried out in this report. We will discuss the overview of Blackmores Ltd, its financial analysis, limitations of ratio analysis, and also the Information in the Annual Report and its Use.

Financial Analysis Report ( ACCT6010 ) | Blackmores Limited

   

The University of Sydney

   

Financial Analysis (ACCT6010)

   Added on 2020-03-04

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Running Head: Financial AnalysisReport on Financial Analysis of Balckmores Ltd.
Financial Analysis Report ( ACCT6010 ) | Blackmores Limited_1
Financial Analysis 2ContentsExecutive Summary.........................................................................................................................3Introduction......................................................................................................................................3Overview of Blackmores: Firm’s Strategy and Prospects...............................................................3Financial Analysis of Blackmores...................................................................................................4Limitations of Ratio Analysis..........................................................................................................6Usefulness of the Annual Report and the information Contained Therein.....................................7Conclusion.......................................................................................................................................7References........................................................................................................................................8Appendix-1:.....................................................................................................................................9Appendix-2:.....................................................................................................................................9
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Financial Analysis 3Executive SummaryBlackmores Limited’s financial analysis for the financial year 2015 has been carried out in this report. The outcome of analysis depicts that the company has been able to improve the financial performance over the period from 2013 to 2015. The net profit margin and return on equity has been found to be increasing. The net profit margin increased from 7.65% to 9.96% and the return on equity increased from 25.51% to 35.34%. IntroductionThe analysis of the financial statements of a company provides evaluation of the company’s profitability, liquidity, solvency, and efficiency which are four crucial aspects of the business (Gibson, 2012). This analysis has impact on the investor’s decision, lender’s decisions and the government’s revenue policies. In this context, this report has been prepared to provide financial performance analysis of Blackmores for the year 2015. Overview of BlackmoresBlackmore limited is listed on the Australian Stock Exchange having headquarters in Australia. The company was incorporated way back in 1930 and since then it has grown magnificently standing with $471.62 million revenues in 2015 (Blackmore Limited, 2015). Blackmore operates in the consumer goods industry with the main products being produced for human and animal healthcare. The company’s mission is to expand the business operations outside Australia and increase its reach to a large part of population. For the achievement of the mission, the company is working with the strategy of delivering quality products. The focus of the company is on improving the quality of products, which will push the demand upside. Further, the company is also considering expanding the business to the Asian countries namely China and Malaysia (Blackmore Limited, 2015). The company is running with the goal of satisfying the customers to the hundred percent. It believes that customer satisfaction is necessary for the achievement of the company’s mission and vision.
Financial Analysis Report ( ACCT6010 ) | Blackmores Limited_3
Financial Analysis 4Financial Analysis of BlackmoresIn order to analyze the financial performance, it is crucial to extract the information from various sources which mainly comprise the financial statements, annual report, and board’s report. The financial statements of a company comprise of three main components such as income statement, balance sheet, and the cash flow statement. The different piece of information is provided by these different components of the financial statements. Further, the companies listed on the stock exchange are required to prepare the annual reports that contain essential information about the company’s business. The board’s report provides information about the company’s future plans and prospects.The information collected from the above discussed resources is analyzed by applying thefinancial evaluation tools. The ratio analysis is the most commonly used financial evaluation tool(Tracy, 2012). However, the other evaluation tools such as vertical analysis and horizontal analysis are also used in assessing the financial performance of a company. The ratio analysis covers all crucial aspects of the business such as profitability, liquidity, solvency, and efficiency. The ratios not only provide analysis into the trend but these also facilitates the comparison of the company with its peers (Tracy, 2012). The horizontal analysis on the financial statements of Blackmores Limited is presented inthe appendix-1. Figure 1: Revenue growth of Blackmores
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