Accounting Capstone Report: Financial Performance Analysis

This report provides a comprehensive analysis of the I Bata Company's financial performance over several years, including projected data. It begins with an executive summary outlining the company's overall strategy and key outcomes. The main body of the report delves into financial performance, presenting key performance indicators such as revenue, expenses, and net profit, along with calculations of ROI and ROE. The report also examines revenue streams from internet and wholesale markets, balance sheet data, liquidity ratios, and cash position. The operations section assesses stock and production levels, worker productivity, and plant capacity utilization across different regions. The customer marketing section analyzes sales per region and advertising effectiveness. Finally, the report evaluates resource management, including staffing, training, and their impact on corporate image. The conclusion summarizes business strategies and provides a reference list of sources used.

Running head: Accounting Capstone
ACCOUNTING CAPSTONE
Name of the student
Course name
Course ID

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Accounting Capstone
1. Executive Summary
The whole study has come to highlight the development of resources that will not
only include the ROI and ROE that will not only indulge the company to increase the level of
benefit that the shareholder will look into the matter.
2. Main Body
a. Financial Performances
i. Summary of key performance indicators
Y10 Y11 Y12 Y13
(projected)
Revenue $432,646 $463,210 $539,769 $549,595
Expense $67,317 $38,196 $134,067 $140,223
Net profit $40,000 $20,642 $88,619 $94,058
Net profit % 9.2% 4.5% 16.4% 6.1%
Y10 Y11 Y12 Y13 (projected)
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0 0 0 0
9.20%
4.50%
16.40%
6.10%
Financial performance
Revenue Expense Net profit Net profit %
Figure 1: Financial performances
(Source: Created by author)

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Accounting Capstone
The overall rate of net profit is increasing by huge margin and it has been predicted
that the net profit % in the Y13 the projected net profit % is falling.
ii) ROI
The ROI is the return of investment. In the business terms, the return of investment is
mainly going to identify the rate of return that the company is going to get with one unit
change in investment. The return of investment is mainly calculated by ROI = Net
income/cost of investment. Net income is the total revenue and the cost of investment is the
cost of overall expenses that are indulged in the business.
iii) ROE
ROE is the rate of equity. The measure of ROE tells the amount of return the
investors are getting with one unit of shares being invested in the business. ROE= Net
income/ shareholder’s equity. In the given game, the ROE is calculated at 20% in the Y10.
9.4% was in Y11 and 32.4% was in Y12.
iv)
v) Revenue
The I Bata Company is earning revenue in Y10, about $90,315 from the sales that are
made from the internet and the company earned about $314,731 from the wholesale market.
The company is earning about $149,791 from the internet or online platform and earned
about $285,474 from the wholesale market. In Y11, the revenue that has been earned
increased by huge margin from the previous years. On the other hand, in Y12, the company
earned $128,160 from the internet and $407,898 from the wholesale market. It is one of the
important aspect in the sense that as the number of years are passing the company is making
business both in online and offline market.

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Accounting Capstone
vi) Re balance sheet / financing/share issues, effects on ROE
In Y10, the total shareholder equity was $210,000. The company was having balance
in the beginning was around $190,000 and in the Y10, the changes was around $20,000. The
Return of average shareholder equity 20%. The company took the ROE 75% was collected in
Y10 and 25% was collected in Y11. Similarly in Y11, the amount of the ROE that the
company earned is about $230,651 and like Y10, in this year to 75% will be collected in Y11
and 25% will be collected in Y12. The ROE is going in a circular version and the amount is
growing in compound rate.
vii) Apply some liquidity ratios and analysis, debtors
In the context of financial analysis, most of the firms consider the cash ratio. In Y10,
the liquidity ratio is 2.9. In Y11, the cash ratio is 3.05 and in the Y12, the cash ratio is 4.73.
The liquidity ratio is claiming that firms are increasing their resources in order to meet their
short term obligations. This is important in the sense that company is improving their
performances.
viii) Company’s cash position
In the year Y10, the total cash that is available with the company is $421,841 (000s)
and in Y11, the total cash that are available $476,633 (000s) and in Y12, the total amount of
cash that is present within the company is $556,764 (000s). The total available cash to the
company are increasing in huge amount and this is one of the good sign for the company as
the amount of cash is increasing by huge margin. It is important in the sense that company
will be able to invest heavily in the long run and the amount is showing that company is
performing well.
ix) Strategies taken

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Accounting Capstone
In order to increase the development of the resources, the company is going to
increase the rate of production and in order to do this, the company is willing to take
improved level of resources. On the other hand, through the development of improved level
of the resources, the company will be willing to induce the development of investment
strategies. In order to indulge better productivity, the company is mainly looking to
incorporate the improvement in the policies. Through the improved strategy and policy the
company is mainly willing to indulge the resource development skills and potentiality.
b. Operations
i) Stock level
The company is having 20,000k stocks has been issued and the par value of stock has
been set at $1.00 per share and the number of stock in the year Y10 is $20,000 (000s), in Y11
the amount of stock is fixed every year. This is important in the sense that amount of stock is
fixed in the sense that every year, the company is deciding the par value every year and they
are determining the buyer of the stock. The company is having high potentiality within them
and they are using relationship with their stakeholders.
ii) Production level
The company is having four regions as their main production. The areas are North-
America, Europe-Africa, Asia-Pacific and Latin America. The company is having high class
production and has set the level of the capability in order to produce the shoes. The company
is having definite level of capability and the company is determining the gaps with the actual
level of production. Through the improvement in the resources the company will be able to
determine the gaps in their production level. In North America, the company is having
capability of around 4000 pair and the company has produced around 4463 pairs (including
the rejected ones) in Y10, in the same year.

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Accounting Capstone
In Asia-Pacific the company has the potentiality of producing 4000 pairs of shoes and
the company is producing 4693 pairs of shoes. In the region of Latin America, the company
is having potentiality of 8000 pairs and the company is producing 9156 pairs of shoes. In
almost all the regions, the company has produced far more its actual capability.
Year North-America Europe-Africa Asia-Pacific Latin America
Capabi Actual Capabi Actual
Y11 4000 4463 0 0 4000 4693 8000 9156
Y12 4000 4800 0 0 4000 4800 0 0
Y13
(projected)
4000 4800 0 0 4000 4800 0 0
iii) Worker’s productivity
The worker’s productivity is showing the fact that actual production in each region is
going surpassing the capability of the production. On the other hand, through the
development of resources, the company is producing more than actual capacity of the
production. The table above is showing the fact that in order to ignite the development of
resources and the company is going to increase the development of the company to improve
the company production. The company is going to increase the productivity of the company
by using upgraded technology.
iv) Upgrades of capacity required
The required amount of capacity required in order to increase the effectiveness in the
production of workers. It is important in the sense that the company is mainly going to
introduce various technologies that will not only induce the development of resources and by
using effective technologies the company will increase the development of the production.

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Accounting Capstone
This is important in the sense that through the up gradation of technology, the company will
like to increase the resources.
v) Plant capacity utilised fully or underutilised
In some of areas, the plant capacity has not fully utilised and in some of the areas, the
capability and the actual production rate is 0. In those plants, the company is mainly having 0
revenue.
vi) Other comments
The whole company is trying to induce the development of resources utilisation and
are looking to incorporate better design of resources utilisation. The company is mainly going
to increase the production rate that will not only increase the revenue but will also increase
the productivity. The cost of the company is increasing in all the year by year.

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c. Customer marketing
Y10 Y11 Y12 Y13
(projected)
Sales per
region ($)
$432,646 $463,210 $539,769
Sales per
region no
88,200 93,151 98,254
Pricing average
Internet
$80 $80 $80
Wholesale $90 $90 $90
Sales per dollar
of advertising
spend
Internet $5177 $8422 $2724 $2900
Wholesale
market
$29,323 $26,078 $12,276 $12,100
It has been seem that it is taking more cost for the company to advertise the products
for whole sale marketing compared to the products sold in internet. On the other hand, using
better utilities based on the economic development of the company it is useful for the whole
business into online platform. This will increase the future growth within economy.

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d. RESOURCES /LEARNING
Y10 Y11 Y12 Y13 (projected)
Number of staff
employed
1943 1956 1841 1778
Effect on
corporate image
Training strategies
and expenses
$937 $848 $161 $157
It is important aspects in the sense that the increasing the training will obviously help
in indulging better level of the productivity. This is an important factor that has portrayed the
impact of training in increasing the long run growth and objectives of the company. Through
the resources utilisation, the company will be able to increase their growth.
Conclusion
The whole study has taken into account the development of the business strategies
that the company has chosen so that in order to increase the level of efficiency the company
will be able to focus on the future strategies that will automatically increase the development
of resources in an effective way. On the other hand, through the development of better
resources the company will flourish.

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Accounting Capstone
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Accounting Capstone
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