Amcor PLC Financial Report: Financial and Non-Financial Analysis

This report provides a financial analysis of Amcor PLC, an Australian company specializing in flexible and rigid packaging. It identifies the company's financial and non-financial strengths and weaknesses, highlighting its strong cash base and growing foreign exchange earnings, while also noting its increasing reliance on debt funding and weaknesses in demand forecasting and work culture integration. The report includes income statements prepared using absorption and marginal costing methods, along with a budgeted income statement for 2021, projecting a significant increase in profits and a decrease in fixed expenses. The analysis concludes that understanding both financial and non-financial aspects is crucial for assessing a company's performance and potential for success. Desklib provides access to this report and many other solved assignments.

Financial Report

Table of Contents
INTRODUCTION ..........................................................................................................................3
Section A..........................................................................................................................................3
Discuss the financial and non-financial strengths and weaknesses of corporation.....................3
Section B..........................................................................................................................................4
Prepare the income statements....................................................................................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7
APPENDIX......................................................................................................................................8

INTRODUCTION
Accounting reports are the records of all the financial data of company. They provide a
summary about the performance of organisation. With the helps of these statements, various
parties like investors , management, creditors takes their concerned decisions (Grassmann,
Fuhrmann and Guenther, 2019). The company chosen in this report is Amcor plc. It is a an
Australian company dealing in flexible and rigid packaging of products like medical devices,
personal care goods food and many more. The report is divided into three parts. The first portion
deals with identifying the financial and non- financial powers and limitations of business. Second
section deals with preparing income statement on the basis of absorption and marginal costing .
The third part provides the budgeted profit and loss account.
Section A
Discuss the financial and non-financial strengths and weaknesses of corporation.
Monetary power means the ability of Amcor in generating profits and availability fop
sufficient cash to run its daily operations. On contrary, financial limitation is when the firm's
holdings are not able to earn it revenue or is not able to operate its business due to lack of
resources like cash.
 Strengths-Firm has strong cash base as can be viewed in cash flow statement and has
increased in comparison with previous year with an amount of around $141 millions.
Earnings from foreign exchange is also growing with 5.1 million in year 2019 to $16.2 in
year 2020. This shows that the international units of Amcor are also following the path of
growth (Mayer, 2018).
 Weakness- Company is shifting its focus towards debt funding rather than arranging its
capital from shares. There long term debts have increased whereas shareholder's equity is
decreasing. As shown in balance sheet, the value of capital was $5674 millions last year
which reduced to $4687 millions in current time.
Non-financial strengths and weaknesses are measures which presents the capabilities and
shortcomings in a firm that helps or abstains it from following the path of success. They includes
the aspects which are not monetary like customers, delivery service, reputation , brand name and
many more.

 Strengths- Amcor has invested a lot in the training and development of its employees
and motivating them. It aids the firm in holding highly motivated and skilled staff that
bring efficiency in work and focuses ion reducing the cost of goods produced. Also, the
business focuses on satisfying its customers, which helps in building its brand image.
 Weakness- The employees of Amcor are not good enough at correctly interpreting the
future demand. Due to this, they sometimes have to keep high inventory which tends to
increase their overall cost. The work culture of organisation is not efficient. It could not
integrate the habits of businesses merging in it with its own values which is creating
hindrance in team building in the company (Shen, Huang, and Lin, 2018).
Section B
Prepare the income statements
(i) Absorption costing income statement
(ii) Absorption costing income statement

(iii) Budgeted income statement for year 2021.
For the year 2021, it is assumed that Amcor is expected a rise in sale by 10 % along with
aiming at reducing its fixed overheads by 5%.
The budgeted profit and loss account shows an increase in profits by 1417 millions. This
is a significant change and moves Amcor towards an upward trend. There is a decreases in fixed
expenses by more than 200 millions which is quite useful for bringing efficiency in the company.

CONCLUSION
It can be concluded from the above report that every firm has its own financial as well as
non-financial powers and weaknesses. They either drive the organisation towards success or pull
back to failure. Monetary strengths of business are derived from the accounting statements,
which presents their health. There are also different methods of preparing these statements on the
basis of requirement like absorption and marginal techniques. They also helps in interpreting the
values of budget and helps in estimating the trends of business.

REFERENCES
Books and Journals
Grassmann, M., Fuhrmann, S. and Guenther, T.W., 2019. Drivers of the disclosed “connectivity
of the capitals”: evidence from integrated reports. Sustainability Accounting,
Management and Policy Journal.
Mayer, C., 2018. Prosperity: Better business makes the greater good. Oxford University Press.
Shen, C.H., Huang, Y.L. and Lin, K.L., 2018. Effect of External Support on Bank Default and
Operating Risks: Does Country Strength Matter?. Asia‐Pacific Journal of Financial
Studies. 47(4). pp.501-528.

APPENDIX