Boral Limited: Financial Analysis, Performance, and Accounting Systems

This report provides a comprehensive financial analysis of Boral Limited, an Australian construction materials company. It begins with an examination of the company's current financial position, evaluating key ratios like the current ratio, quick ratio, and debt-equity ratio over two quarters. The report assesses Boral's performance based on these ratios, identifying strengths such as clear strategic direction and good product quality, and weaknesses like underinvestment in research and development. It explores the company's future plans, including asset utilization and potential barriers to success, such as market competition and industry risks. The report then contrasts manual and computerized accounting systems, highlighting differences in accuracy, time efficiency, cost, and adherence to accounting principles. The analysis concludes that computerized systems offer significant advantages in the modern era. The report references several academic sources and includes appendices with relevant financial data.

ACCOUNTING
(BUSINESS
SIMULATION)

Table of Contents
INTRODUCTION ..........................................................................................................................1
Part A...............................................................................................................................................1
1 Current financial position of Boral limited.........................................................................1
2 Plans for business have going forward................................................................................2
Part B...............................................................................................................................................3
Summary: Difference in process of manual accounting system and accounting using computer
software..................................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES ...............................................................................................................................5
APPENDIX......................................................................................................................................6

INTRODUCTION
Accounting means systematic process of recording, classifying, analysing and
summarising financial data or transactions. Business simulation is mainly related to training,
learning and development of ability to analyse financial market, decision making, business
operations etc. Report is prepared taking into consideration Boral limited which is an Australian
company involved in manufacturing of building and construction materials. This report covers
evaluation of financial performance with the help of accounting ratios, also future aspects of
business in reference with assets, risks, strength and weaknesses. Later difference between
manual entry system of accounting and accounting software package has been discussed.
Part A
1 Current financial position of Boral limited
Current financial position of Boral limited describe on the basis of key ratios of quarterly
basis -
(31 march 2018)
Current ratio = Current assets/current liabilities = 1738300/995200 = 1.75%
Quick Ratio = Quick assets/current liabilities = 1124500/995200 = 1.13%
Debt equity Ratio = Total liabilities/Shareholder's fund = 3779500/2335700 = 1.62%
(30 June 2018)
Current ratio = Current assets/current liabilities = 1738300/995200 = 1.75%
Quick Ratio = Quick assets/current liabilities = 1124500/995200 = 1.13%
Debt equity Ratio = Total liabilities/Shareholder's fund = 3779500/2335700 = 1.62%
Performance
After analysis of ratio that expected it current ratio will not increases as well as quick
ratio, and debt equity ratio also not increasing so it's not effected to financial condition of Boral
limited. Ratios are stables from first quarter to second quarter, no changes coming. So it's not
effected to performance of Boral limited. From the above analysis, identified that the
performance of organization is not satisfactory.
Basis of success
Success of Boral limited is determined by all the three given aspects that are net profit,
property enhancement and total assets. As without profits, a company can not survive so period
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ending profit is 441 million in 2018 and it will increasing from 2015 to 2018 and there is total
assets are 9510 million in 2018 and continue increasing without increase in profits. Property
development is not indeed a determination factor of a company's immediate success but it shows
future scope in area of financial growth and there is not coming growth in property improvement.
(Riley Jr and et.al., 2013). So here is basis of success is period ending profit because it increasing
in huge amount .
Strength of Boral limited
Boral limited has many strengths that help it to grow in the market place. These strengths
are helping in penetrating new markets and protect to market share. Strengths are as follows -
 Clear strategic direction – After operations getting that Boral limited have clear strategic
direction for leading business. (Bodnar and Hopwood, 2012).
 Good quality of product – They provided good quality products that are attract to
customers.
Weakness of Boral limited – Weakness are the areas that are improve by Boral limited
 Research and development for investment is down from others
 Financial planning not properly and efficiently
 Failure to merge firms by operation regarding
Opportunities taken
1. New customers from online channel – company invested into online platform and this
investment has opened newly sales channel for Boral limited.
2. New environmental policies – In industry it will create a level playing field for all the
players.
3. New taxation policy – This policy impact on the way of doing business and established
new opportunity.
Opportunities Missed
1. Lower inflation rate – More stability in market and lower interest rate.
2. No regular supply of innovative products so don't getting new contracts.
2 Plans for business have going forward
Assets of business utilities
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In company have different different types assets and they are play his role in Boral
limited. Assets are important part of Boral limited, and they are helping for in many ways like
as-
1. Full optimization of resources – With the help of assets fully optimize of resources and
using on time. (Leitner and Wall, 2015).
2. Effectively and efficiently – Assets acquire on low price and using in effective way,
charged depreciation on assets.
Barriers to success in Boral ltd
In Boral ltd facing many barriers for success they are as follows-
1. Market attracting to new entrance and demand strong.
2. Increasing Competition after innovation.
3. Getting bad advice and overabundance on the rumor.
Future risks of Boral limited
 Industry and market risks – In this risk included structural and cyclical demand changes,
macro economic conditions, future resource constraints, changes to materials and
constructions method.
 Competition risk – In this risk including new capacity and market entrants, regulatory
requirements, technology innovation, and new capacity and market entrants (Moser,
2011).
 Business interruption – In this risk including reserves and resources, supply chain failure,
digital disruption, and weather impacts.
Part B
Summary: Difference in process of manual accounting system and accounting using computer
software
Manual entry system of accounting refers to maintaining registers and books for
recording journal, ledgers. These are generally maintained by sole proprietors, shopkeepers
having small business. Computerized system of accounting means process of accounting is
carried through various software, databases and control system. (Difference between manual and
computerized accounting, 2018)
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Taking into consideration accuracy, which is more in accounting software as compared to
manual entry accounting because this system needs expert or accountant with good knowledge
but there is a huge possibility of human errors which is natural in areas of omission or
mistakenly alteration of transactions or events. While in computerized system, reliability and
accuracy increases, anyone who has knowledge about accounting software and its related
operations can use this.
Time factor is very crucial in any accounting system, as speedy completion of work saves
money and resources. Manual entry system consumes more time comparatively to accounting
software system because every calculation is done on paper by accountant or either with the help
of calculator. But in accounting software, all calculations of preparing reports is completed in
seconds or by just a click. Computerized system involves huge cost than other system as
maintenance and installation cost of software are higher than workforce required for operating
manual entry accounting (Amosun, 2017).
Accounting principles refers to the guidelines, concepts which compulsorily followed by
every company while recording financial transactions. In Australia, AASB ensures compliance
of AAS by every firm. Generally, small firms uses manual entry accounting system for which
there is no compulsion to comply with accounting principles (Mills and Smith, 2011). But for
large companies, where auditing is done needs to follow accounting principles and they
definitely use computer software accounting system due to large number of transactions, high
turnover etc.
In respect to qualitative characteristics of financial reports, one can write adjusting entries
for correction of errors in manual system, also trial balance is not prepared on regular basis. But
in another system, financial statements can be prepared in seconds with the help of accounting
software in every quarter or at the year end.
CONCLUSION
This report summarizes performance and SWOT analysis of Boral limited through
financial ratios. Financial performance is showing positive growth through subsequent years.
After that comparison study was done between manual accounting system and software
accounting. In this modern era, computerized system will prove better than another system
because software is now available everywhere and not at higher rates as previously.
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REFERENCES
Books and Journals
Riley Jr, R. A and et.al. 2013. Using a business simulation to enhance accounting education.
Issues in Accounting Education.28(4). pp.801-822.
Leitner, S. and Wall, F., 2015. Simulation-based research in management accounting and control:
an illustrative overview. Journal of Management Control.26(2-3). pp.105-129.
Moser, C., 2011. Carbon Mitigation Strategies in the Electricity Distribution Sector in Australia.
IIIEE Master thesis.
Amosun, A., 2017. THE LOGIC OF BUSINESS STRATEGY: A Case Study of Kone Group.
Bodnar, G. H. and Hopwood, W. S., 2012. Accounting information systems. Upper Saddle River:
Pearson.
Mills, A. M. and Smith, T. A., 2011. Knowledge management and organizational performance: a
decomposed view. Journal of knowledge management.15(1). pp.156-171.
Online
Difference between manual and computerized accounting, 2018. [online]. Available through:
<https://keydifferences.com/difference-between-manual-and-computerized-
accounting.html>
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APPENDIX
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