BUS103: Detailed Analysis of Myer Group's 2019 Annual Report

This report analyzes the 2019 annual report of the Myer Group, a department store operator. Part A addresses questions on the company's principal activities, revenue recognition, valuation of assets, the role of auditors, and sustainability initiatives. Part B focuses on financial ratio analysis, including total asset turnover, inventory turnover, return on assets, gross profit margin, equity ratio, and debt ratio. The analysis compares the years 2018 and 2019, evaluating the company's efficiency, profitability, and debt position. The report utilizes information from the annual report to assess Myer's financial performance and position, drawing conclusions about its operational effectiveness and financial health. The report includes a list of references used for the analysis.

Running head: COMPANY’S ANNUAL REPORT
Company’s annual report
Name of the Student
Name of the University
Author Note

COMPANY’S ANNUAL REPORT
Table of Contents
Part A:........................................................................................................................................1
Answer to question 1:.................................................................................................................1
Answer to question 2:.................................................................................................................2
Answer to question 3:.................................................................................................................2
Answer to question 4:.................................................................................................................2
Answer to question 5:.................................................................................................................3
Part B:.........................................................................................................................................3
Answer to question 1:.................................................................................................................3
Requirement A:..........................................................................................................................3
Requirement B:..........................................................................................................................3
Requirement C:..........................................................................................................................4
Requirement D:..........................................................................................................................4
Requirement E:...........................................................................................................................4
Requirement F:...........................................................................................................................5
References list:...........................................................................................................................5

COMPANY’S ANNUAL REPORT
Part A:
Answer to question 1:
The principal activity of Myer Group during the current financial period was the
operation of business of department store.
Answer to question 2:
Recognition of revenue is done by the group when the obligation of performance
relating to particular transaction is fulfilled by the group and the gift card is redeemed by the
customers. In addition to this, any unredeemed value of reward card and gift cards is
recognized by the group as non-redemption income. The non-redemption amount is
recognized as by the group as revenue proportion to the pattern of utilization of the reward or
gift card by the customers. Myer uses effective interest method for recognizing the revenue
from interest on time proportion basis. Recognition criteria of revenue is mentioned in the
notes to the financial statement on page number 55 (Investor.myer.com.au 2020).
Answer to question 3:
Valuation of plant, equipment and property is done cost by deducting the amount of
depreciation charged. Buildings, fixtures and fittings and equipment and plant is depreciated
and depreciation is charged on land. Information on valuation is mentioned in note C1 of
property, plant and equipment on page number 60 (Investor.myer.com.au 2020).
Answer to question 4:
Financial statements of Myer Group is audited by Pwc (PricewaterhouseCooper).
Declaration of auditors about their independence provides assurance of the fact that their
opinion of audit performed has not been influenced by any other party or by the management

COMPANY’S ANNUAL REPORT
of organization. It also ensures that auditors were not under anyone’s undue influence when
auditing the financial statements. The reliability and validity of the financial statements of
entity is assured by the external party audit and is perceived by the investors as qualified.
Audit by the external party helps in building investor’s confidence as it provides a true and
fair view of the financial information reported (Cornwall et al. 2019).
Answer to question 5:
Sustainability at Myer is about development and growth of business by addressing
ethical, environmental, social and economic issues impacting the business operation.
Sustainability helps the business to maximize the positive outcomes for the internal and
external stakeholders. There are five focus areas of sustainability strategies which include
customer, environment, team, community and business (Investor.myer.com.au 2020). Myer
has conducted various pilot initiatives to improve the layouts, services and appearance of
stores and better communication.
Part B:
Answer to question 1:
Requirement A:
Year 2019 2018
Total assets turnover 2.27 1.92
Inventory turnover 3.74 3.76

COMPANY’S ANNUAL REPORT
Requirement B:
Efficiency position of Myer group is analyzed by computing inventory turnover and
total asset turnover over the time period of two years. Total assets turnover has increased to
2.27 in year 2019 from 1.92 in year 2018 and it is favorable to have higher ratio. It implies
that the assets are effectively utilized by the company to generate income. Inventory turnover
has also increased marking the liquidity of inventory as the inventory is getting converted
into sales on faster basis (Lev and Gu 2016). Hence, Myer holding is efficient in utilizing
their assets for income generation and therefore, overall efficiency of company has improved.
Requirement C:
Year 2019 2018
Return on assets ratio 0.02 -0.30
Gross profit margin 0.39 0.38
Requirement D:
Profitability position of Myer group has been analyzed by computing return on assets
and gross profit margin. In the financial year 2019, return on asset has turned favorable as the
computed figure stood at -0.3 in 2018 and 0.02 in year 2019. This increase in value implies
that the assets are utilized efficiently to generate income. Furthermore, figures of gross
margin has also increased to 0.39 in year 2019 compared to 0.38 in year 2018. This
increasing gross margin indicates that the inventories are being sold profitably and this might
be due to falling cost of goods sold (Boyer 2019). Therefore, it is inferred that profitability of
company has improved recently.

COMPANY’S ANNUAL REPORT
Requirement E:
Year 2019 2018
Equity ratio 0.47 0.43
Debt ratio 0.53 0.57
Requirement F:
The debt position of Myer group is analyzed by computing equity ratio and debt ratio.
There has been increase in equity ratio to 0.47 in year 2019 from 0.43 in year 2018 and this
increment is considered to be favorable and implies that sustainable and less riskier when
borrowing. Lower debt ratio is preferred by the investors as the business is considered to be
financially stable. Debt ratio on other hand has reduced from 0.57 in year 2018 to 0.53 in year
2019. This falling ratio indicates that Myer group has lower financial leverage as the assets
are adequate to finance the liabilities payment or any obligations of business (Schaltegger and
Burritt 2017).

COMPANY’S ANNUAL REPORT
References list:
Boyer-Davis, S., 2019. Technostress in Accounting Professionals: A Quantitative
Examination of the Differences Between Managers and Non-Managers. Journal of
Accounting and Finance, 19(2), pp.25-41.
Cornwall, J.R., Vang, D.O. and Hartman, J.M., 2019. Entrepreneurial financial
management: an applied approach. Routledge.
Investor.myer.com.au., 2020. [online] Available at:
http://investor.myer.com.au/FormBuilder/_Resource/_module/dGngnzELxUikQxL5gb1cgA/
file/Myer_Annual_Report_2019.pdf [Accessed 29 Jan. 2020].
Lev, B. and Gu, F., 2016. The end of accounting and the path forward for investors and
managers. John Wiley & Sons.
Pwc.com., 2020. [online] Available at: https://www.pwc.com/im/en/services/Assurance/pwc-
understanding-financial-statement-audit.pdf [Accessed 29 Jan. 2020].
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.