ATMC ACC701: Financial Analysis of Bellamy Australia Limited Report

This report provides a financial analysis of Bellamy Australia Limited, a public company specializing in organic baby and toddler products. The analysis includes common size statements, horizontal analysis of the balance sheet from 2014 to 2018, and trend analysis of revenue, total assets, and profit. Ratio analysis, including current ratio, net profit margin, return on assets, interest coverage, and asset turnover, is performed to evaluate the company's liquidity, profitability, and efficiency. The report identifies upward trends in sales, total assets, and profits, indicating good performance. The analysis concludes that the company manages profitability, liquidity, and interest coverage effectively, despite losses in 2017 due to high expenses. The report is based on the company's annual reports and industry research, and it showcases the financial health and performance of Bellamy Australia Limited.

Accounting for
managers

 The financial analysis of Bellamy Australia limited is
carried out.
 Common size statements are prepared for analyzing
trends.
 Graphs are made for better presentation.
 Ratios have been calculated for the evaluation of
position and performance.
Introduction

Bellamy Australia limited
It is a public company dealing in organic products.
Various formula products are supplied for babies and
toddlers.
Carrying the operations in Australia, China, Hong
Kong and Singapore.
Covers the domestic and international markets.

Common size financial analysis
• Vertical analysis of the income statement has been
made by taking sales as the base.
• Horizontal analysis of balance sheet is performed for
duration of five years from 2014 to 2018.
• 2014 is taken as the base and further analysis is made
on that basis.
• Growth made has been identified.

Trend analysis
Trend analysis is performed to identify the trend from past few years. The
trend is sales is as follows:
2014 2015 2016 2017 2018
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
48,896
125,302
244,583 240,182
328,704
Revenue
Revenue
Linear (Revenue)

Trend in total assets
There is upward trend which is identified in relation to
total assets which is provided below:
2014 2015 2016 2017 2018
0
50,000
100,000
150,000
200,000
250,000
300,000
22,790
72,411
143,501 156,641
280,812
Total Assets
Total Assets
Linear (Total Assets)

Profitability trends
The profits of the company are rising appropriately and it
can be noted below:
2014 2015 2016 2017 2018
-10,000
0
10,000
20,000
30,000
40,000
50,000
1,266
9,073
38,328
-809
42,816
Profit for the year
Profit for the year
Linear (Profit for the year)

Results of trend analysis
• It has been identified that there is the rise in the sales
which has been made.
• The upward trend has been noted in the total assets of the
company.
• The profits of the company are also increasing with the
time.
• It can be said that company is performing well.

Ratio analysis
Particulars Formula 2014 2015 2016 2017 2018
Current ratio Current assets/current
liabilities
3.19 3.06 2.32 2.30 3.14
Net profit margin Net profit/sales*100 2.59% 7.24% 15.67% -0.34% 13.03%
Return on total
assets
Net profit/total assets*100 5.56% 12.53% 26.71% -0.52% 15.25%
Interest coverage
ratio
EBIT/interest -11.56 17.68 92.36 -0.47 65.02
Total assets
turnover ratio
Sales/total assets 2.15 1.73 1.70 1.53 1.17

Findings of ratio analysis
The company is enjoying good liquidity position which
will help it in meeting the obligations effectively.
The profitability is maintained which will be helping it in
making the further developments.
Company is covering all the interests in effective manner.
The turnover is maintained with the assets which are
involved in the company.

The profitability in the company is managed adequately.
There are losses in 2017 due to the high rise in the
expenses.
The liquidity has been managed and company will be able
to pay off the liabilities.
There is proper interest coverage ratio and that will help the
company to meet the interest expense.
Conclusion

References
Bellamy Australia limited. (2015). Overview. [Online]
Available at:
https://www.ibisworld.com.au/australian-company-research-re
ports/wholesale-trade/bellamys-australia-limited-company.html
[Accessed 14 September 2019]
Bellamy Australia limited. (2018). Annual report. [Online]
Available at:
http://www.annualreports.com/HostedData/AnnualReports/PD
F/ASX_BAL_2018.pdf
[Accessed 14 September 2019]
Williams, E.E. and Dobelman, J.A. (2017) Financial statement
analysis. World Scientific Book Chapters, pp.109-169.