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Assignment Introduction to Accounting and Finance

Added on - 20 Nov 2019

Financial Statement Analysis

This report is on "financial statement analysis". Pact group of companies manufactures packaging and other products and sells them in Australia, New Zealand, and Asia. The company changes plastic resin and steel into packaging products. We will discuss the analysis of the packaging industry. The value of packaging in Australia is 10-10.5 billion dollars. About 30000 people are directly employed in the packaging in Australia. The auditor gave in their report that financial statements of Pact Group Holdings Ltd were in accordance with Corporations Act 2001.

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Accounting1Introduction to Accounting and Finance
Accounting2Table of ContentsIntroduction......................................................................................................................................3Analysis of packaging industry.......................................................................................................4Future plans of Pact group of companies........................................................................................4Financial Statement Analysis:.........................................................................................................6Calculate the ratio analysis:...........................................................................................................10Conclusion:....................................................................................................................................14References......................................................................................................................................15
Accounting3IntroductionPact group of companies manufactures packaging and other products and sells them in Australia,New Zealand and Asia. The company changes plastic resin and steel into packaging products.The products of the company are used in several industries namely food and beverage, personalcare, household consumer, chemicals. Its products are also used in materials handling andinfrastructure. Malcolm Bundey is the Managing Director and Chief Executive Officer of thecompany.Pact’s packaging is for fresh food, chilled meat, frozen food, ready-meals, baked goods, dairyproducts, juice and bottled water, among others (Pact Group, 2017). Important things that are tobe kept in mind for packaging is that it should keep the food product fresh and provide itprotection from outside environment that might contaminate it.In personal care and health products the aesthetics, functionality, convenience and safety are allvery important. Pact provides packaging for oral hygiene products, skin creams, hair productsand pharmaceutical products. The company’s products have latest decoration, patented designsand world leading medical dispensing systems (Pact Group, 2017).The industrial and chemicalsector has highly varied packaging requirements that demand durability, reliability, safety andeasy transit and storage. Pact provides packaging solutions for agricultural chemicals, surfacecoatings, lubricants and other petroleum products ranging from large bulk sizes to very smallhandheld packaging. Pact’s materials and handling solutions are focused on the transport andstorage of products using pallets, crates and other containers.Pact group of companies had net profit after tax of $ 85.1 million for the year ended 30 June2016 and sales revenue of $ 1381.3 million for the same period. Its profit and revenue has growncompared to the previous year. Ernst & Young were the auditors of the company. The auditorgave in their report that financial statements of Pact Group Holdings Ltd were in accordancewith Corporations Act 2001. They gave a true and fair picture of the company’s financialposition as at 30 June 2016 and of its performance for the year ended 30 June 2016.Further, the financial statements complied with Australian Accounting Standards andCorporation Regulations 2001. In September 2017 share price of the company was $ 5.230 anddividend per share was 23.0 cps (InvestSmart, 2017). The ending date of its latest fiscal year was30 June 2017. The company is based in Richmond, Australia.
Accounting4Analysis of packaging industryThe value of packaging in Australia is 10-10.5 billion dollars. About 30000 people are directlyemployed in packaging in Australia. Packaging of a product is very important. It determines thequantity in which food and other items are available. Australian consumers have the lesser sparetime they buy products packaged in different quantities. Pouches have become more popular.More products like baby food and yoghurt are available in pouches. In case of pet care alsopouches containing dog food are bought as the food in them is wet and fresh.Australians are becoming more health-conscious due to which they want to control their diet.This is the reason they want food in different sizes of containers. This is the reason whycompanies like Coca-Cola are now introducing containers in smaller sizes (Eliott et al., 2014).Australians want to buy high-quality premium products. The consumers want smaller andslimmer glass bottles containing drinks. They want products packaged attractively.Packaging of different types helps the brand owner in creating an image for its products. Thepackaging also has to be convenient, making the use of product easy. In case of packaged food,there is more demand for plastic pouches rather than cartons (Mordor Intelligence, 2017). Theconsumers are also more conscious about sustainability factor. They want to see if the packagingcan be recycled without harming the environment. The companies also are using sustainablepackaging as a marketing tool. More sustainable packaging like plastic made of sugarcane is indemand.There are many companies of food packaging like Centropak, Confoil, Linco food systems,Maxpak Australasia Pty Ltd and Olympus packaging (Ezilon, 2017). There are companies likeModbec and Synergy Packaging Pty Ltd which pack cosmetics. There are companies likePackmatic, Panda Packaging Pty Ltd, Walls Machinery Pty Ltd and Davis packaging whichpackage equipment.The demand for plastic packaging is increasing despite adverse effect on the environment. Thereis pressure from the government due to which biodegradable and sustainable plastic is beingused. Sellers of plastic packaging are Amcor, Rexam, Winpak, Aptar group and other companies.Future plans of Pact group of companiesPact group of companies would continue to focus on lowering the group’s overall cost ofproduction through efficiency program announced in 2015. The company would get growth byacquiring more business entities. But merger and acquisitions would take place after greater
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Calculate the Ratio Analysis

From the above report "financial statement analysis", we conclude that a company can easily reduce its cost by using an effective selling process. From the above findings, it can be recommended that the company can launch a new product with effective features so that it helps to retain more customers. The company has to know that what its customer needs and what they want. The company has also renewed its product from time to time and makeup gradations on their products, as a result, it helps to increase the firm value (Huo, 2012). Based on your analysis, would you consider the company to be a strong performer? On the basis of the above analysis, it can be observed that the company has a strong performer because the company is effectively improving its operations as compared with previous years. Along with this, the company has also improved its gross margin, net income as well as operating profit as compared with the previous years. Apart from this, the company has also the potential to perform very well in the future because of the availability of sufficient funds.