Principles of Financial Accounting

Principles of Financial Accounting
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Contents
1. Industry Description................................................................................................................................3
a)Size of Industry and Level of Competition............................................................................................3
b. Regulators of the Industry and extent of compliance within the industry..........................................3
c. Industry Groups Regulating the Behavior............................................................................................3
2. Company Description..............................................................................................................................4
a. Main Source of Business and the type of products and Services.........................................................4
b. Ownership & Management Structure of Company.............................................................................4
c. Role within the Financial System.........................................................................................................4
3. Financial Instrument Analysis..................................................................................................................4
a. Financial Instruments..........................................................................................................................4
b) off Balance Sheet Business (OBS)........................................................................................................5
4. Part A: Financial Ratio Analysis................................................................................................................5
Profitability Performance........................................................................................................................7
Liquidity performance.............................................................................................................................7
Efficiency Performance............................................................................................................................8
Part B: Competitor Analysis.......................................................................................................................10
a. Main Competitors..............................................................................................................................10
b. Basis of Competition in Industry........................................................................................................10
c. Opportunity or Threat for the Company on the basis of Competition...............................................10
5. Financial Market Analysis......................................................................................................................11
a. Interaction among the Financial Players of the Industry...................................................................11
b. Government Intervention..................................................................................................................12
c. Ethical Behavior within Brisbane Broncos..........................................................................................13
6. Findings, Conclusion and Recommendations........................................................................................13
References.................................................................................................................................................15
Appendix...................................................................................................................................................17
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1. Industry Description
a)Size of Industry and Level of Competition
The ASX listed entity selected for analysis purpose is Brisbane Broncos Rugby League
Football Club Ltd that is commonly known as Brisbane Broncos. It is a recognized Australian
rugby league football club that is located within the city of Brisbane. The company operates
within the sport sector of Australia that is composed of various types of entities promoting
growth and development of sport. The sports sector realizes revenue of about $12 bn on annual
basis and the growth of the sector is contributed to be about 4% on an annual basis (Sports -
Australia Market Research Report, 2018). The football sports largely contribute to the growth
and realization of revenue within the Australian sector. Football is regarded as the major sport
within the Australia and therefore there exists many football club within the country. As such,
the level of competition is intense with many dominant football leagues present within the
country such as Queensland Reds, Brisbane Roar, Brisbane Lions and many others (McMahon,
2017).
b. Regulators of the Industry and extent of compliance within the industry
The football leagues within the industry are governed by Australian National Football
Council (ANFC). ANFC is regarded as the national governing body for developing and
maintaining football rules within the country. Also, the Australian Football League (AFL) also
serves as a sport governing body for football game within the country.
c. Industry Groups Regulating the Behavior
The AFL Players Association (AFLPA) is the representative body that is involved in
promoting and protecting the members through taking initiatives such as improving workplace
relations, supporting career growth and community events. It act as a lobbying group for the
players of the league by promoting investment in past, present and future personal development
of the footballers (National Rugby League and Australian Rugby League, 2017).
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2. Company Description
a. Main Source of Business and the type of products and Services
Brisbane Broncos Limited is an Australian based company that is involved in
management and operations of Rugby League Football Team of Brisbane Broncos. The football
club drives its revenue through sponsoring of the football team of Brisbane Broncos and is
regarded as one of the most financially successful franchise for National Rugby League having
one of the highest base of supporters (Brisbane Broncos Limited And Its Controlled Entities:
Annual Report, 2018).
b. Ownership & Management Structure of Company
The parent company of Brisbane Broncos is Nationwide News Pty Ltd that is a subsidiary
of News Limited having about 70% of the shares of the company. It is regarded as the only
publicly listed national rugby league club within Australia. The management of the club consists
of Board of Directors including executive and non-executive key management personnel
(Brisbane Broncos Limited and Its Controlled Entities: Annual Report, 2018).
c. Role within the Financial System
The football club is regarded as the source of funds as it generates funds through
undertaking sponsorship of Brisbane football team. It has a stable portfolio of committed
partners providing support the club and achieves the highest annual revenue of all rugby clubs
within Australia as Brisbane is regarded as the most popular and football teams of the country.
3. Financial Instrument Analysis
a. Financial Instruments
As analyzed from the financial report for the year 2018 of Brisbane Broncos, its major financial
instruments include cash and short-term deposits. It can be depicted as follows:
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