Analysis of IskraCorp Pty Ltd on ASS2 Part - 2 B3

Running head: INTRODUCTION TO ACCOUNTING AND FINANCE
Introduction to Accounting and Finance
Name of the student:
Name of the university:
Author Note:

INTRODUCTION TO ACCOUNTING AND FINANCE 1
Executive Summary
Detailed financial performance of the chosen company IskraCorp Pty Ltd which deals with
the artificial intelligence toys. Artificial intelligence is playing an important role now a day in
each and every segment of business. The company has financed its business by mortgage
loans and bank loans. On the other hand, the company has also financed by the help of the
issue of ordinary shares. The financial strategy of the company is analyzed and further
advices provided to improve its business.

INTRODUCTION TO ACCOUNTING AND FINANCE 2
Table of Contents
1. Introduction:.......................................................................................................................3
2. Advices on detailed analysis on Financial Report from ASS2 Part -2..............................3
2.1 Analysis of IskraCorp Pty Ltd on ASS2 Part – 1 A2.......................................................3
2.2 Analysis of IskraCorp Pty Ltd on ASS2 Part – 2 B2.......................................................6
2.3 Analysis of IskraCorp Pty Ltd on ASS2 Part – 2 B3.......................................................9
2.4 Analysis of IskraCorp Pty Ltd on ASS2 Part – 2 B4.....................................................11
2.5 Analysis of IskraCorp Pty Ltd on ASS2 Part – 2 B5.....................................................13
2.6 Analysis of IskraCorp Pty Ltd on ASS2 Part – 2 B6.....................................................14
2.7 Analysis of IskraCorp Pty Ltd on ASS2 Part 3..............................................................18
2.7.1 Profitability Ratios:.................................................................................................18
2.7.2 Efficiency Ratio:.....................................................................................................19
2.8 Analysis on the future expectation ASS2 Part - 5..........................................................20
2.9 Advices of IskraCorp Pty Ltd ASS2 Part – 6.................................................................20
2.9.1 Advices on part 1 of Part - 6:..................................................................................20
2.9.2 Advices on part 2 of Part – 6:..................................................................................21
2.10 Limitations of IskraCorp Pty Ltd.................................................................................21
3. Conclusion........................................................................................................................22

INTRODUCTION TO ACCOUNTING AND FINANCE 3
1. Introduction:
The assignment deal with the company, which is IskraCorp Pty Ltd, sells smart toys
which is a medium sized business enterprise. The financial performance of the chosen
company is advised and further interpretation is done accordingly. The retail business of the
firm is analyzed and recommendations are made accordingly in order to bring certain changes
to improve the efficiency of the firm (Kaplan and Atkinson 2015). Analysis of key financial
ratios is performed in order to conduct an operation on the financial performance of the
company. The financial strength of the company identified through the conducted analysis of
the chosen company, which is IskraCorp Pty Ltd. In order to outperform the competitors the
company needs to brush up the current financial performance of the company and improve it
accordingly in order to outperform its competitors.
2. Advices on detailed analysis on Financial Report from ASS2 Part -2
2.1 Analysis of IskraCorp Pty Ltd on ASS2 Part – 1 A2
IskraCorp Ltd
Balance sheet as at 31.12.2017
ASSETS
($00
0)
($00
0) LIABILITIES
($00
0)
($00
0)
Current Assets Current Liabilities
Inventory 192
Total Current Assets 192 Total Current Liabilities 0
Non-current Assets Non-current Liabilities
Land & Buildings 500 Bank Loans 568

INTRODUCTION TO ACCOUNTING AND FINANCE 4
Furniture, Fixtures &
Fittings 100 Mortgage Loans 415
Plant & Equipment 250
Total Non-current
Assets 850 Total Non-current Liabilities 983
TOTAL LIABILITIES 983
SHAREHOLDERS' EQUITY
Ordinary Shares 180
TOTAL SHAREHOLDERS'
EQUITY 180
TOTAL ASSETS
1,04
2
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY
1,16
3
Profit & Loss Statement
for the year ending 31 December 2018
($000) ($000)
INCOME
Sales 1,838
Total Income 1,838
less Cost of Sales -937
GROSS PROFIT 901
less OPERATING EXPENSES
Wages -142
Rent -129
Motor Vehicle Running Exp -41
Insurance -42
Printing & Stationery -19
Heating & Lighting -22
Telephone, Postage & Internet -11
Total Depreciation -35
Total Operating Expenditure -463
EARNINGS BEFORE INTEREST AND TAX (EBIT) 438
Interest -13
Tax -85
NET PROFIT 340
Dividends declared 204

INTRODUCTION TO ACCOUNTING AND FINANCE 5
Transfer to Retained Earnings 136
Statement of Cash Flows
for the year ending 31 December 2018
($000) ($000)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from Customers 1,728
Cash paid to Suppliers -825
Cash Expenses -369
Interest Paid -59
Tax Paid -85
Pre-paid Expenses -37
Total Cash Flows from Operating Activities 355
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Land & Buildings -630
Purchases of Plant & Equipment -220
Purchases of Motor Vehicles -100
Mortgage Loan Repayments 46
Total Cash Flows from Investing Activities -904
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of Corporate Bonds 630
Proceeds from issue of Shares 266
Proceeds from Bank Overdraft 31
Dividends Paid -204
Total Cash Flows from Financing Activities 723
NET CHANGE IN CASH 174
+ Opening Cash -121
= Closing Cash 53