Financial and Management Accounting Report: Goodman Group Analysis

This report provides a comprehensive financial and management accounting analysis of the Goodman Group, focusing on financial performance, corporate social responsibility (CSR), and reporting quality. The analysis includes an executive summary, a detailed financial analysis using key ratios (liquidity, solvency, profitability, and efficiency), and a comparison of Goodman Group's performance against industry benchmarks and competitors like Dexus. The report also examines Goodman Group's CSR initiatives, highlighting its commitment to sustainability, asset management, community engagement, and corporate performance. Furthermore, the report assesses the quality of financial reporting, offering insights from an investor's perspective, and concludes with a summary of findings and recommendations for improvement. The student report aims to provide a clear understanding of Goodman Group's financial position and its approach to CSR.

Financial and Management
accounting

EXECUTIVE SUMMARY
Financial accounting is the aspect in which all the transactions in respect of finance will
be accounted for. For this information is required that is collected with the help of management
accounting. All the accounts and statements are prepared which can be used by managers in
making of appropriate decisions. In the report, analysis of them is conducted with the help of
ratios that will prove to be beneficial as manner in which operations are performed is identified
by this. Different aspects such as profitability, liquidity, solvency and efficiency are taken into
consideration under it. investors view is provided importance and for that interpretation is done
so that they can draw valid conclusions. Corporate and sustainability responsibility of Goodman
are discussed which provides benefit to customers and company both and they are also
mentioned here under. in order to identify the qualitative aspect comparison has been made with
the another entity in same sector that is Dexus.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Task 1: Financial analysis......................................................................................................1
Task 2: CSR reporting............................................................................................................3
Task 3: Comparison of reporting............................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
APPENDIX......................................................................................................................................9

INTRODUCTION
Finance is the most important requirement of any business and it will be required that all
the aspects with respect to it shall be analysed in an appropriate manner (Yadav, Kumar and
Bhatia, 2014). For this, there are various techniques which can be used and also, a company can
compare itself with others so that final outcomes can be evaluated properly. The report will be
made by taking Goodman group which is dealing in real estate. By the help of this it will be
determined that whether the quality has been maintained in statements prepared or not.
Task 1: Financial analysis
In the conduction of financial analysis it will be required that various methods shall be
used so that proper conduction can be done. The main tool which can be used here is ratios.
position of company will be determined with the use of it. There are various ratios that can be
used and are classified under four main heads which will be representing, liquidity, profitability,
efficiency and solvency of business (Brigham and Ehrhardt, 2013). The calculation of them will
be made and then it is to be compared with benchmarks set so that evaluation can be done. The
classification is as follows:
 Liquidity: They are those by which liquidity of business will be examined. In this, it is
checked that whether company will be able to meet its liabilities on time or not. here, the
main ratios which are to be calculated are current and quick . Investors will be wanting to
know about this as they are willing to invest in company only when it is having strong
liquidity. This is because; this proves that it is in good position and their money is not at
risk.
 Solvency ratios: In this, the financial stability of business is checked and for the same,
debt of company will be compared to assets and equity which is held by it. If debt is high
then it will be considered that there is no flexibility and lot of expenditure is to be made
in the form of interests. Debt to equity or asset are major ratios which can be carried out
in this section. If debts of company are less then, it has an opportunity to use funds for
making investments which yield additional earnings and this is beneficial for investors as
they are also the part of company.
 Profitability: The main purpose for which any entity is established is profit. So, it is
needed that profitability shall be maintained and for the same, ratios are calculated to
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know whether required earnings are made or not. For this, gross profit or net profit ratios
are determined. More the profits, higher is dividend which is paid so if the profitability is
strong then investors will believe that they will get good returns on their investments.
 Efficiency ratios: The manner in which work is performed in organisation is examined
with the help of them. It identifies that efficiency is achieved in processes or not. For this
Inventory or receivable turnovers are calculated (Fridson and Alvarez, 2011). The more
the ratio, it will be much better. If work will be performed with full efficiency then it
means that resources are utilised in most effective manner and no wastage is made in
respect of them. This will ensure investors that their funds will be used by organisation in
proper manner and will help in development of it.
The ratios in respect of Goodman group and real estate industry as whole are provided below:
Particulars Goodman group Industry
Quick ratio 3.27 1.21
Current ratio 4.13 1.27
Debt equity 0.34 90.15
Gross profit ratio 46.42% 4.54%
Net profit ratio 47.18% 12.92%
Inventory turnover 1.38 4.66
Receivable turnover 3.78 4.05
Return on Equity 9.51 11.07
By the calculation, performance can be measured and for this, interpretation is done of all
the results that are obtained and same is provided here under:
Quick ratios: In this, the ability of business to pay its short term liabilities is checked. The
standard ratio set in this respect is 1:1. In this, all the assets which can be easily converted into
cash are considered. In case of GRG it is 3.27 and of industry is 1.21. So, as this is more it can be
said that payments will be made on time being too high also has its consequences. It shows that
there are liquid assets which are lying ideal.
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Current ratios: by this the current asset and liabilities are compared and in this all assets are
involved which can be used for liabilities to be met in next 12 months. This is good if it is at or
above 2. Here, it is determined to be 4.13 which is more than that of industries 1.27 and hence
shows that Goodman maintains good liquidity.
Debt equity: This is at 0.34 which says that the debts of company are 34 percent of total equity.
It shows good position as less amount of debts are there so less interest will be paid and that
money can be used for other purposes which will be in overall interest of business.
Gross profit: It is the ratio which shows the profit before reduction of indirect expenses. If it
will be more then it will be considered as beneficial for business (Healy and Palepu, 2012). In
given case Goodman is having it at 46.42 which is more than 4.52 that industries rate so it is
earning good profits.
Net profit: The final earning are depicted by help of it. The more will be this, it is much better.
47.18% is earned by compnay which is higher then that of industry level and this shows that
company is efficiently managing its expenses.
Inventory turnover: This shows that the inventory in comparison to sales and this is good if
more (Goodman Group, 2017). This in given case is less than industry parameters and so it is
needed that improvement shall be carried out in this respect. This is same for receivable turnover
also and shows company is not collecting its money on proper time.
Return on equity: The earnings made on equity will be represented by this and it is at 9.51
which although is less than standard that is 11.07 but then also it at considerable level. This is
good sign for company and investors who will be wanting to make investments.
Task 2: CSR reporting
In the success of any business a great role is played by corporate responsibility and
sustainability. From the results obtained it can be said that it has been a good year for Goodman.
In order to achieve sustainability, proper consistency has been maintained (Saeed, Rasid and
Basiruddin, 2015). Proper growth in skills and knowledge is built so that various trends such as
urbanisation, consumerism can be dealt with in proper manner. In this important is given on
improvement of quality as by that only long term sustainability can be maintained. For this it
reviews its strategies in this respect on regular basis and main focus is given to following areas:
 Asset management: In order to improve the competitiveness, resilience and efficiency,
assets are managed and investment is made in them.
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 Sustainable development: Innovation is included so that sustainability can be improved
and for this evaluation is needed that is done by involving customers in designing.
 People and community: A foundation is established with the help of which people of
organisation are challenged and inspired (Brigham and Houston, 2012). Also various
groups in community are supported.
 Corporate performance: Overall performance is improved and for this impact of
various factors is measured. All the stakeholders are taken into consideration on regular
basis.
Various achievements have been made by it and they include completion of green
development in various parts of world. Benchmarks for sustainability are submitted in respect of
partnerships.
The interiors have been improved and by that LEED gold standards are achieved and also
system is established for air purification and water filtration (Klettner, Clarke and Boersma,
2014). Material which are locally sourced are utilised for internal purposes. The performance is
considered as main priority and for that focus is given to required parts. The new technologies
have been used such as lighting and they are growing at continuous basis. This has resulted in
decrease of expenses for customers which will be providing final benefit to Good man only.
Foundation which is established provides help to those in need in form of grants and in
addition to this support is provided from staff of company including fund raising. There are
various forms in which help is made such as cash grants are provided on basis of projects
undertaken. Some contributions are made by which facilities are given to charitable partners.
Values have been reset in which various aspects are included. The management systems
which is responsible for evaluation of employees working has enhanced and provided better
results as this has been used in better manner. Also communication among organisation is
improved in which career progression programme is reviewed so that steps can be taken for
further development. Management skills are boosted in which they are encouraged to consider
the cultural and geographical diversities in the process of reviewing performance.
So all of these are some points which are related to CSR policies of Good man by which
it is maintaining its position and achieving further growth.
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Task 3: Comparison of reporting
Reporting which is done by all organisation is the manner in which all the transactions
are recorded by it and for that it is needed that proper process shall be carried out. The process
that will be followed by all is different in some or other manner. For this it is needed that high
quality shall be maintained as this will attract more investors towards it (McGraw and Dabski,
2010). For this it is required that standards shall be followed. In them economic reality shall be
maintained and also non-financial information shall be incorporated. For the decision making it
is needed that all the characteristics which will be showing quality will have to be incorporated
in the reports. They shall be made in such manner by which comparison will be made possible
and will be prepared for a particular period of time. All the differentiations shall be shown in
most appropriate manner so that no confusion remains in respect of them.
There are various methods that can be used to measure quality of reports made. By them
it is identified that whether proper procedure has been adopted or not and by that all targets are
attained. Some of them include accrual approach, research or value relevance. In value and
accrual models quality of earnings made are measured which shows the level of earnings made
by following the present regulations. So it shall be ensured that they shall be reported on
appropriate basis as earnings will be managed on basis of them. Then next by value model,
reliability is measured which ensures that the matter involved shall be such by which it will be
possible for users to rely on them and make decisions on basis of them.
In order to determine that whether the data entered in statements is useful for decisions
making it is required to access the qualitative characteristics of them. By following all these it
will be possible to identify and draw results regarding companies reporting.
So it can be noted that all the necessary details that are required in reporting are made by
both the companies and they will be beneficial for all the persons or can say stakeholders who
are using them. By the use of them they can take all required decisions so that they can also get
benefit from it. Proper reporting essentials are followed by them and this can be ascertained from
the evaluation that is made in this respect and analysis conducted above.
For that it is required that comparison shall be made. In given case it will be performed
between Goodman group and Dexus which are both involved in real estate business. From the
examination it can be seen that the manner in which assets are recorded by both are different.
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The quality will be maintained when all the required information will be disclosed in proper
format and for this all the details will have to be provided.
Proper information is not available in respect of all the entries that are made in equity
which is not good as true position is not depicted due to this. In case of Dexus, all the categories
which are involved in equities are shown separately which involves common stock, retained
earnings and other reserves (Dexus, 2017). They are better in case of Dexus and its performance
is also good as income earned by it is more than that of Good man.
The information that is available through these statements is useful only when the proper
quality is maintained and so it shall be ensured that it is done. If it is possible then they can be
used by all stakeholders for various purposes and this improves their decision making power.
The persons who are responsible for the preparation of them are accountable to all as they
are the ones who have made them. So if any issue arises to anyone in respect of them the they are
required to provide suitable answers.
So, it can be said that Good man is following proper methods for reporting but less than
Dexus and it will not be possible for stakeholders to make appropriate decisions by the help of
this data as they will be requiring the additional information. So it can be concluded that manner
adopted by Dexus is far much better (Van der Heijden, Driessen and Cramer, 2010). Quality of it
is good and will help various parties to make proper evaluation and then decide all the aspects.
CONCLUSION
From the above report, it can be concluded that for financial management, it is necessary
that analysis shall be carried out in which various methods can be undertaken. By this
performance of organisation can be evaluated which is helpful in decision making process. the
manner in which reporting shall be done to improve the quality has also been explained. Also it
is identified that there will be accountability and usefulness of the statements for all of the
stakeholders.
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REFERENCES
Books and Journals
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage
Learning.
Brigham, E.F. and Houston, J.F., 2012. Fundamentals of financial management. Cengage
Learning.
Fridson, M.S. and Alvarez, F., 2011. Financial statement analysis: a practitioner's guide (Vol.
597). John Wiley & Sons.
Healy, P.M. and Palepu, K.G., 2012. Business analysis valuation: Using financial statements.
Cengage Learning.
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics. 122(1). pp.145-165.
McGraw, P. and Dabski, S., 2010. Corporate Social Responsibility Reporting in Australia's
Largest Companies. Labour & Industry: a journal of the social and economic relations of
work. 21(1). pp.390-409.
Saeed, S., Rasid, S.Z.A. and Basiruddin, R., 2015. The mediating role of Intellectual capital in
corporate governance and the corporate performance relationship. Mediterranean Journal
of Social Sciences. 6(5). p.209.
Van der Heijden, A., Driessen, P.P. and Cramer, J.M., 2010. Making sense of Corporate Social
Responsibility: Exploring organizational processes and strategies. Journal of cleaner
production. 18(18). pp.1787-1796.
Yadav, B., Kumar, A. and Bhatia, B.S., 2014. Concept of creative accounting and its different
tools. International Journal of Management and Social Sciences Research (IJMSSR).
3(2). pp.66-74.
Online
Dexus -DXS. 2017. [Online]. Available through:
<http://tools.morningstar.co.uk/uk/stockreport/default.aspxtab=10&vw=bs&SecurityTok
en=0P00009Y0L%5D3%5D0%5DE0WWE
%24%24ALL&Id=0P00009Y0L&ClientFund=0&CurrencyId=GBP>. [Accessed on 28th
September 2017].
Goodman Group -GMG. 2017. [Online]. Available through:
<http://tools.morningstar.co.uk/uk/stockreport/default.aspxtab=10&vw=bs&SecurityTok
en=0P0000A13L%5D3%5D0%5DE0WWE
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%24%24ALL&Id=0P0000A13L&ClientFund=0&CurrencyId=GBP>. [Accessed on 28th
September 2017].
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APPENDIX
Balance sheet of Goodman group
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