Corporate Accounting Analysis of Harvey Norman Limited

HARVEY NORMAN LIMITED
Corporate Accounting
Student’s Name
[25/5/2018]

Corporate Accounting
2
Contents
Introduction:.....................................................................................................................3
Harvey Norman limited:...................................................................................................3
Que 1:................................................................................................................................3
Que 2:................................................................................................................................5
Que 3:................................................................................................................................5
Que 4:................................................................................................................................6
Que 5:................................................................................................................................6
Que 6:................................................................................................................................7
Que 7:................................................................................................................................7
Que 8:................................................................................................................................8
Que 9:................................................................................................................................9
Que 10:..............................................................................................................................9
Que 11:............................................................................................................................10
Conclusion:.....................................................................................................................10
References:.....................................................................................................................11

Corporate Accounting
3
Introduction:
Evaluating the income statement recording process, cash flows recording process and
taxation recording process are one of the major elements of the accounting process. It
examines the standards and the accounting process which has been used by the company to
measure the accounting figures and their recording process in the annual report. It examines
the fair accounting valuation method, disclosure policy, materiality policy, notes to accounts
and a detailed description about all the accounting figures in the annual report of the
company.
The report explains about the various financial statement of the company such income
statement, cash flow statement, comprehensive income statement and the balance sheet of the
company. It measures the different figures and the recording style of the company to identify
that whether the company has used proper rules, regulations and the policies to record the
financial and accounting figures of the company in the final financial statement of the
company.
Harvey Norman limited:
Harvey Norman limited is one of largest Australian company in the retailing and
electrical industry. Mainly, the comapny operates it business in retailing of furniture,
computers beddings, consumer electrical products and combination products. The company
operates it business through various franchise, it has been founded in 1982. Home (2018)
explains that around 2820 franchise stores are owned by the company to run the business and
manage the performance of the company. The brand names of the company are Harvey
Norman, Domayne and Joyce, Mayne etc. the company is also operating its business at
overseas. Annual report of the company briefs that the company has followed the AASB,
FASB and IFRS rules to determines and record all the accounting activities and figures in the
annual report of the company.
Que 1:
Cash flow statement is crucial statement of an organization which is prepared by the
companies to evaluate the changes in the cash in a particular period; this statement measures

Corporate Accounting
4
the entire cash outflow and inflow of an organization of a particular period and measure
about the liquidity and solvency position of the company. Cash flows statement does not
affect by the outstanding expense and revenue of the company. It only records those activities
which have been impacted on the cash position of the company. Every listed company is
required to prepare this statement according to IFRS rules (Walsh, McGregor‐Lowndes and
Newton, 2008).
The Harvey Norman limited explains that the cash flow statement of Harvey Norman
limited explains about huge changes into the cash position of the company from 2016 in
2017. The main changes into the cash flow position of the company has been occurred due to
investments, purchase of PPE, acquisitions, investment purchase, debt issuance, repayment of
debt amount, dividend amount etc.
The below table explains that the investments and purchase of PPE has enhanced the
cash outflow of the company which has directly impacted on the total cash flow position of
the company. In addition, it has been recognized that the long term debt issuance has
enhanced the cash inflow position of the company from last year (Horngren et al, 2012).
Though the higher dividend amount has been paid to shareholders of the company and
it has impacted the cash inflow position. The changes could be seen on the net changes in the
cash. It explains about the improved position of cash items of the company from 2016.
CASH FLOW STATEMENT
Amt in AUD 2015 2016 2017
Investments in property, plant, and
equipment -55012000 -68155000 -89366000
Property, plant, and equipment reductions 7152000 9051000 28592000
Acquisitions, net -4000 -25349000
Purchases of investments -19876000 -64484000
-
130397000
Long-term debt issued 44349000 349000 72075000
Long-term debt repayment -52000000 -45862000 -15250000
Cash dividends paid
-
333664000
-
266882000
-
344962000
Net change in cash
-
302400000
-
487280000
-
485889000
(Yahoo finance, 2018)