HI5020 Corporate Accounting: Financial Analysis of ASX Mineral Firms

This report provides a comparative financial analysis of three ASX-listed companies in the Australian minerals industry: Australian Bauxite Limited, Australian Mines Limited, and ATECO Minerals Limited (formerly Monax Mining Limited). The analysis focuses on equity and liabilities, cash flow statements, other comprehensive income statements, and accounting for corporate income, utilizing the companies' annual reports from the past two years. The equity analysis details issued capital, reserves, and accumulated losses, while the liability section examines current and non-current liabilities. The cash flow analysis covers operating, investing, and financing activities, and the report concludes with a comparison of corporate income accounting practices among the three companies. The report highlights variations in cash flow generation and capital structure strategies.

Accounting
Assignment

A comparative analysis of the Financial
Information
Prepared by
Student Name:
Date: 31st January, 2019
Page 1

Executive summary
This report is intended to present the brief summarized financial comparison of the equity and
liability, cash flow statement and other comprehensive income statement and the measure for the
accounting for the corporate income of the three ASX listed companies in the Australian
minerals industry naming Australian Bauxite limited, Australian Mines Limited and ATECO
Minerals Limited formerly known as Monax Mining Limited. To assist our study, the latest
annual report of all the companies for last two years have been analyzed.
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Table of Contents
Introduction................................................................................................................ 5
Main Body................................................................................................................... 6
Equity and Liability..................................................................................................... 6
Comparative position of the Debt and Equity of the latest financial year................10
CASH FLOW STATEMENT.......................................................................................... 11
v. Comparative analysis of broad categories of the cash flows for the three years..16
vi. Comparative understanding from the above in relation to the three companies
................................................................................................................................. 18
OTHER COMPREHENSIVE INCOME STATEMENTS......................................................19
ACCOUNTING FOR CORPORATE INCOME..................................................................20
Conclusion................................................................................................................ 21
References............................................................................................................... 22
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Introduction
Our study is aimed at making a comparative analysis of the elements of the financial information
of the three ASX listed companies engaged in the Minerals Industry. The main areas covered by
our study are equity and liabilities, cash flow statement, other comprehensive income statement
and accounting for corporate income. The three companies as chosen for our analysis are
Australian Bauxite Limited, Australian Mines Limited and ATECO Minerals Limited, which
was earlier known as Monax Mining Limited.tc 3452
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Main Body
Equity and Liability
Equity basically consists of the equity share capital and the reserve and surplus or in other words
the retained earnings of the company. When we talk about the liability it can be of two types
which are long term and the short-term liability. In the general accounting terms, it is known as
Current liability and the Noncurrent liability. Current liability includes the items which are
repayable in a period of one year, whereas the long-term liability can be paid in more than one
year. In terms of considering the capital structure of the company we always mean the non-
current liability or the long-term debt (Borit & Olsen, 2012).
i. Details of the Equity of the three companies are provided hereunder the table
Australian Bauxite Limited
Particulars 2017($000) 2016($000) 2015($000)
Issued capital 25075 24823 24740
Reserves 593 593 593
Accumulated
losses
(8353) (8532) (8369)
Total 17315 16884 16964
From the above items listed from the consolidated financial position of the
Australian Bauxite limited its equity primarily consists of the three items, the first
being raised through the issue of the shares, the second being the reserve and the third
being the Accumulated losses.
During the year 2015, the opening balance of the issued capital was $24483627 and
further issue made during the year was $256620 that made the final figure of $27740,
during the year 2016 the share placement fund received were $583380 from which
the share placement cost of $580600 was deducted and the further share issued in lieu
of services were $80000 (Kang, et al., 2016).
There has not been any change in the figure of the reserve as it could be depicted
from the above tables.
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The accumulated losses of the above table resulted from the past years losses
cumulative balances which showed that in 2016 the result of the operation was loss
hence accumulated loss figure increased, but the result of operation for the year 2017
was profit that caused the decrease in the total accumulated loss figure in the year
2017 (Epstein, 2018).
Australian Mines Limited
Particulars 2018($000) 2017($000) 2016($000)
Contributed Equity 67076 45062 37243
Reserves 3013 1573 1550
Accumulated losses (41820) (36497) (34821)
During the year 2015, the opening balance of the equity was lying as $34455957;
addition to this was made through the further issue of $3025000 and from it the cost
of the issue was deducted $237580 and the final figure thus came as $37243376.
During the year 2016 the further issue made, and the cost of issue was deducted, and
the similar things can be noticed in the year 2018.
The figure of the accumulated reserve is primarily because of the share-based
payments made to the employees and directors in the company and finally the
accumulated losses were the result of losses resulting from the operation of that year
(Grundy, et al., 2017).
Monax Mining Limited
Particulars 2018($000) 2017($000) 2016($000)
Issued capital 24127 23085 21583
Reserves 85565 42165 785
Accumulated losses (23851) (22446) (21609)
Total 361 681 758
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The first item of the issued capital primarily consisted of issue made during the year
from which the cost of the issue had been deducted; the reserve was the result of
options issued during the year and the reserve accumulated because of sale of asset
(Truong, et al., 2008).
ii. Details of the Liability of the three companies are provided hereunder the table
Australian Bauxite Limited
Particulars 2017($000) 2016($000) 2015($000)
Current Liabilities
Trade and
miscellaneous
payables
905 890 2256
Employee Benefits
Provisions
119 101 106
Other liabilities 21 9 0
Non- current
liabilities
Employee Benefits
Provisions
85 73 79
Other liabilities 435 435 435
Total 1565 1509 2877
Particulars 2017($000) 2016($000) 2015($000)
Current Liabilities
Trade and other
payables
905 890 2256
Employee Benefits
Provisions
119 101 106
Other liabilities 21 9 0
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Non- current
liabilities
Employee Benefits
Provisions
85 73 79
Other liabilities 435 435 435
Total 1565 1509 2877
From the above table it is quite clear that the short-term trade payable had been
decreased in the year 2016 and showed a bit increase again in the year 2017, though no
major changes noticed for the employee benefits either as current and noncurrent
liabilities during the last three years and the other noncurrent liabilities remained
constant in last three years (Webster, 2017).
Australian Mines Limited
Particulars 2018($000) 2017($000) 2016($000)
Current Liabilities
Trade and
miscellaneous
payables
3388 98 460
Employee Benefits
Provisions
92 40 30
Other liabilities
Non- current
liabilities
Employee Benefits
Provisions
0 0 0
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Other liabilities
Total 3480 138 490
Particulars 2018($000) 2017($000) 2016($000)
Current Liabilities
Trade and other
payables
3388 98 460
Employee Benefits
Provisions
92 40 30
Other liabilities
Non- current
liabilities
Employee Benefits
Provisions
0 0 0
Other liabilities
Total 3480 138 490
From the above table it is quite evident that short term payables drastically increased
for the company though initially it showed the decrease in the year 2016 when
comparing with the year 2015, the same can be seen for the employee benefits
provision, but its capital structure did not have any long-term liability.
Monax Mining Limited
Particulars 2018($000) 2017($000) 2016($000)
Current Liabilities
Trade and 113 278 162
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miscellaneous
payables
Provisions( short
term)
6 0 0
Non- current
liabilities
Liabilities (Long
term)
0 0 0
Total 119 278 162
Particulars 2018($000) 2017($000) 2016($000)
Current Liabilities
Trade and other
payables
113 278 162
Short term
provisions
6 0 0
Non- current
liabilities
Long term
Liabilities
0 0 0
Total 119 278 162
For the Monax Mining the amount of the short-term payables had been showing a
declining trend and again there is absence of long term debt.
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Comparative position of the Debt and Equity of the latest
financial year
Particulars Australian
Bauxite
Limited
2017($000)
Australian
Mines
Limited
2018($000)
Monax
Mining
Limited
2018($000)
Equity 17315 28269 361
Debt 520 Nil Nil
Total 17835 28269 361
From the above it is quite clear that the Australian Mines Limited had the highest
volume of equity with no debt, whereas the Monax mining had the lowest amount of
equity contribution with no debt and the Australian Bauxite limited had a composition
of the debt and equity but to an optimum level (Pamela & Tamara, 2013).
CASH FLOW STATEMENT
Often it is questioned that a company which is showing huge book profit or the accounting
income but is unable to pay the dividend or other cash obligations. To know the reason where the
company has used its cash and cash equivalent the statement which is prepared is known as cash
flow statement. It basically consists of Cash flow from operating activities, cash flow from
investing activities and the cash flow from the financing activities. Cash flow from operating
activities generally reflect the cash inflow or outflow resulted from the operation or in other
words from the core operation of the business (Kaufmann, 2017). Similarly, the cash flow
from financing activities show those figures that resulted from the proceeds from the issue of
long term debt and equity, similarly the repayment of the debt and the share capital, payment of
dividend etc. Cash flow from financing activities show the major investment made by the
company in the fixed assets so that ling term revenue can be generated from it. In our case all the
three companies are from the same industry but showing the variation in terms of the generation
of the cash flow (Vieira, et al., 2017).
iii. Australian Bauxite Limited
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