ACCT2005 - Financial Analysis: Annual Report Analysis & Interpretation

This report provides a detailed financial analysis of a company based on its annual report, focusing on key financial ratios, cash flow analysis, and overall financial performance. The analysis involves selecting key ratios for investment, financing, and operating activities, evaluating trends, and inter...Read More

Running head: ANNUAL REPORT WRITING AND ANALYSIS
Annual Report Writing and Analysis
Name of the Student:
Name of the University:
Authors Note:

ANNUAL REPORT WRITING AND ANALYSIS
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Table of Contents
1) Selecting at least two the key ratios for each aspect:.............................................................2
2) Conducting cash flow analysis of the allocated company:....................................................4
References:.................................................................................................................................6

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1) Selecting at least two the key ratios for each aspect:
Particulars 2017 2016 2015 2014
Net income 1,824,969,000 943,576,000 378,307,000 655,763,000
outstanding shares 726,008,000 728,394,000 728,394,000 728,394,000
market price 12.28 12.61 12.20 15.12
Current assets 2,058,814,000 757,561,000 799,894,000 563,523,000
inventory 17,457,000 16,296,000 14,861,000 12,901,000
current liabilities 1,125,568,000 881,692,000 958,995,000 708,533,000
total debt 1,944,998,000 2,261,326,000 2,662,017,000 1,742,801,000
total equity 5,175,365,000 5,092,124,000 4,609,000,000 3,981,661,000
sales 5,179,543,000 4,219,745,000 3,484,753,000 3,094,764,000
total assets 8,552,620,000 8,920,719,000 8,437,351,000 6,568,531,000
accounts receivables 225,920,000 248,558,000 377,632,000 341,553,000
Investment Activities Formula 2017 2016 2015
Earnings per share (Net income-dividend
on preferred stock)/
outstanding shares
2.51 1.30 0.52
P/E ratio Market price/ earnings
per share 4.89 9.73 23.49
From the evaluation of the above investing activates ratios the financial performance
of the company can be detected, which has relevantly improved over the three fiscal years. In

ANNUAL REPORT WRITING AND ANALYSIS
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addition. the earnings per ratios has increased, while the P/E has declined providing adequate
investment opportunity for the investors (Atoom, Malkawi & Al Share, 2017).
Financing Activities Formula 2017 2016 2015
Quick ratio (current assets-
inventory)/current
liabilities
1.81 0.84 0.82
Debt to equity ratio Total debt/Total equity
0.38 0.44 0.58
The quick ratio has relevantly improved, while the debt ratio has declined, which
indicates the improving financial position of the company. Both the financial activity ratios
relevantly indicate financial stability of the organisation and the returns, which could be
provided to the investors (Kanapickiene & Grundiene, 2015).
Operating ratios Formula 2017 2016 2015
Accounts receivable
turnover ratio
Net sales/ Average
accounts receivable 21.83 13.48 9.69
Total asset turnover
ratio
Net sales/ average total
assets 0.59 0.49 0.46
Both the accounts receivable turnover ratio and total asset turnover ratio of the
company has increased, which indicates the drastic improvement in operating activities of the
company. The management has utilised the assets adequately to generate higher revenue,
while the increased accounts receivable turnover states the quick payments, which is been

ANNUAL REPORT WRITING AND ANALYSIS
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conducted by the debtors (Goyal & Bhatia, 2016). Hence, the performance of the organisation
has relevantly improved from 2015 to 2017.
2) Conducting cash flow analysis of the allocated company:
The above figure evaluates the operating activities of the company, where the net cash
flow from operating activities has mainly declined from 2016 to 2017. In addition, the receipt
from customers, payment it suppliers, dividend received, interest received, borrowings cost
paid and income tax paid has declined over the period from 2016 to 2017. This relevantly
decreases the net cash flow from operating activities (Crownresorts.com.au,2018).
The company has increased its selling sphere in 2017, as compared to 2016, where the
company has purchased less assets, while increasing the sale of property. The overall cash

ANNUAL REPORT WRITING AND ANALYSIS
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flow from investing activities has relevantly increased exponentially in 2017, as comparted to
2016 (Crownresorts.com.au,2018).
From the overall evaluation of financial activities proceeding from borrowings and
repayment of borrowings has mainly declined over the period, while the dividend payment of
the company has increased. The share buyback is also conducted by the company, which
increases the cash outflow conducted by the organization and made the net cash follow from
financial activities negative (Crownresorts.com.au,2018).
The overall increment in cash inflow in comparison to cash outflow is due to the
excessive selling that is conducted by the organization. Moreover, the overall increment in
cash and cash equivalents at the end of the financial years is relevantly higher in 2017, as
compared to 2016 (Crownresorts.com.au,2018).

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References:
Atoom, R., Malkawi, E., & Al Share, B. (2017). Utilizing Australian Shareholders'
Association (ASA): Fifteen Top Financial Ratios to Evaluate Jordanian Banks'
Performance. Journal of Applied Finance and Banking, 7(1), 119.
Crownresorts.com.au. (2018). Crownresorts.com.au. Retrieved 11 April 2018, from
http://www.crownresorts.com.au/CrownResorts/files/9d/9df41ad5-de12-465c-ad18-
2925ad3533fa.pdf
Goyal, S., & Bhatia, A. (2016). Analysis of Financial Ratios for Measuring Performance of
Indian Public Sector Banks. International Journal of Engineering and Management
Research (IJEMR), 6(2), 152-162.
Kanapickienė, R., & Grundienė, Ž. (2015). The model of fraud detection in financial
statements by means of financial ratios. Procedia-Social and Behavioral
Sciences, 213, 321-327.