Corporate Accounting Analysis: HI5020 Report on Healthcare Firms

This report presents a comprehensive analysis of corporate accounting practices, focusing on two publicly listed healthcare companies, RHC Ramsay Health Care and SHL Sonic Healthcare Limited. The report delves into key financial aspects, including owner's equity, examining the components and trends over a three-year period (2015-2017). It scrutinizes cash flow statements, differentiating between operating, investing, and financing activities to assess the companies' financial performance. The analysis further extends to other comprehensive income statements and accounting for corporate income tax. A comparative analysis is conducted on debt and equity ratios to evaluate the financial structure of both companies. The report utilizes financial statements to understand revenue, expenses, and tax rates, providing a thorough examination of the companies' financial health and operational strategies. It also includes an introduction to the companies, highlighting their business operations and market positions, and concludes with a summary of the key findings.

HI5020 Corporate Accounting

EXECUTIVE SUMMARY
This report defines the specific forms of the corporate accounting which are perceived with RHC
Ramsay Health Care and SHL Sonic Healthcare Limited. To analyse the owners equity, cash
inflow and outflow of cash, the different items of cash flow statements have been considered.
The report will be analysing the performances of the companies for the period of three years for
year 2015, 2016 and 2017. It also follows all the income statements to know the total revenue
and expenses which appeared in the organizations. It also calculates the tax rate by knowing the
tax expense. Into this report, there is comparison done between the debt and equity ratio. For the
betterment of understand the concepts of accounting, all these subjects are given under the
financial statements of accounts. This report analyses the owner’s equity of RHC as $2358686
and that of SHL was $3926130 in 2017.

Table of Contents
EXECUTIVE SUMMARY.................................................................................................................................2
INTRODUCTION...........................................................................................................................................4
OWNERS EQUITY.........................................................................................................................................5
I................................................................................................................................................................... 5
II..................................................................................................................................................................8
CASH FLOWS STATEMENT...........................................................................................................................9
III.................................................................................................................................................................9
IV...............................................................................................................................................................11
V................................................................................................................................................................13
OTHER COMPREHENSIVE INCOME STATEMENT........................................................................................15
ACCOUNTING FOR CORPORATE INCOME TAX...........................................................................................19
XI...............................................................................................................................................................19
XII..............................................................................................................................................................22
XIV.............................................................................................................................................................25
XV..............................................................................................................................................................26
XVI.............................................................................................................................................................28
CONCLUSION.............................................................................................................................................29
REFERENCES..............................................................................................................................................30

INTRODUCTION
The manager has selected two different organizations to understand in a better manner to
evaluate the form of corporate accounting. The provider of Healthcare in Australia, U.K is RHC
Ramsay Health Care which was established in 1964 in Australia. It practices in psychiatric,
rehabilitation, surgery, etc. SHL Sonic Healthcare Limited, has become the biggest diagnostic
company which is spread in different areas. It specializes in radiology, imaging, laboratory
medicine, pathology and gained a turn over revenue of $5,122 million in year 2017. It deals with
the different concepts to obtain the current position of organizations, when needed. They also
analyse the ratio of equity and debt to identify the statements of income for obtaining the amount
of expense and income and in respect of owners. A lot better position of the company can be
gained if the balance sheets depict the similar amount of assets and liabilities. Then it can be
recognized among all other organizations. Healthcare can lead to its objective if all these
accounts can be maintained in proper and systematic manner. This will lead the organization to a
good level of respect.

OWNERS EQUITY
I
Owner Equity can be explained as the difference among the assets of the company and its
liabilities. It shows the owner’s investment in the business minus the withdrawals made by the
owner in the business plus the net worth of the owner. It will be covered under a separate head in
the balance sheet. There are different items that can be recorded under the equity in Sonic health
care limited and Ramsay Health care (Ramsay Healthcare limited, 2017).
Treasur
y shares
Converti
ble
Adjusta
ble Rate
Equity
Securitie
s
Retained
Earnings
Reser
ves
Non-
controlling
Interests
Minorit
y
Interest
Contribu
ted
Equity
Parent
compan
y
Interest
The
concerne
d
business
orgaaizat
These
shares
are
converte
d into
It can be
found by
subtracting
the
liabilities
It is
the
profit
gain
which
It can be
termed as the
minority
interest in
which
It is a
part of
the
subsidiar
y
It
consists
of cash
and
assets
It is the
compan
y which
control
the

ion
habvebou
ght back
in
previous
year.
stock at a
price at
the time
of
issuance
of stock.
These
are the
security
whose
rate of
interest
is tied to
security
rates.
from assets
and the
remaining
portion is
equity(Ra
msay
Healthcare
limited,
2017).
is kept
aside
for the
specifi
c
purpos
e.
Also,
it can
be
used
to
purcha
se the
assets
and to
pay
the
bonus,
debts
etc.
stakeholders
owns the
lesser
amount of
shares that is
50% and
they do not
have the
power to
make
decisions(Ra
msay
Healthcare
limited,
2017).
corporati
ons
which
cannot
be
owned
by the
parent
firms.
which
can be
given by
stakehold
ers in
exchange
for stock
(Ramsay
Healthcar
e limited,
2017).
operatio
ns and
also has
control
over
interest
in
differen
t
compan
ies.

II
This question helps in clarifying the theory of debt and equity in health care limited. The debt
means the money that can be owed by one party to second party (Ramsay Healthcare limited,
2017). On the other hand, after observing the financial records the equity can be declared as the
source of a firm’s assets and it can be introduced as the book value as it is equal to the assets
minus liabilities.
It can be observed that the Sonic Health care Limited, raised the amount of equity to $3926130
in 2017 from $3732709 in 2016 which there is an increase in equity which denotes the profit
gains of organizations (Sonic Healthcare Limited, 2016). The owners equity of the company in
year 2015 was 3325998 which is raised to 3732709 in 2016. The main contribution in the
increase was retained earnings of $871612 and issue of new equity of $150674 (SHL, 2017). On
the other part, the liabilities becomes more as compare to the previous year. This reveals the
meaning that they have taken loans to which they have to pay in future (McCabe, 2018). The
owners equity of the company consists of contributed equity, reserves, retained earnings and
minority interests.
In relation to Ramsay Healthcare limited has the equity of $1837794 in year 2015 which is
raised to 2046061 in year 2016. Again, there is an increase in the equity results to $2358686 in
year 2017 which concludes to the point that there is an ascending trend in equity which implies a
good source of finance in organisations (Ramsay Healthcare limited, 2017). The company has
not issues any shares during the year indicate the increase in the share capital due to the retained

earnings and non-controlling interests. In the other part, the liability shows the descending trend
which is 6195421 in 2016 to 5976675 in 2017. This depicts the fact that there is less liability
they have to pay a lesser amount (Ramsay Healthcare limited, 2017). It is also identified that
there is no change in the issued capital and Convertible Adjustable Rate Equity Securities
(CARES) during the period of evaluation (RHC, 2016).
CASH FLOWS STATEMENT
III
The statements of cash flow includes all the financial statements that allows the data in relation
to the cash inflows which can be received from operations and investments and cash outflows
which can be paid by owners in the aspect of activities(Ramsay Healthcare limited, 2017). It
reports the cash which is spent and the cash generated for a specific period of time.
Activities Description
Investing activities It consists the amount of interest that can be received by owner,
acquisition of a business in terms of cash. This activity reports the
aggregate change in the firm position of cash that can be resulted from
the losses and gains and includes the amount that can be spend on the
investments(Ramsay Healthcare limited, 2017). The investing
activities of RHC include purchase of disposal of property, plant or
equipment, proceeds from sale of property and plant. The other
contributing areas are proceeds from sale of assets, interest received,
and acquisition of business and deferred payments in investments. The
investing activities in sonic healthcare limited were almost same some

of the additional activities performed by the company were payments
of investments, payments of intangibles and repayments of loan by
other entities (RHC, 2016).
Operating Activities It consists the items that arise in the normal business operations. As
such, it includes receipts from clients, payments to suppliers, along
with other items such as payment of interest rate and finance cost.
Basically, these are the functions of an organization which are related
to services and products to market.
Financing activities It includes all activities that are related to financial activities (Sonic
Healthcare Limited, 2016). The financing activities of SHL includes
proceeds from the issue of shares, proceeds from borrowings and its
repayments, non-controlling interest transactions and dividends paid to
shareholders and minority interest in subsidiaries (SHL, 2017).

IV
This question allows to analyse the comparison between different activities in the terms of
business profit and to understand meaning of the same. It can be given in the tabular form:
Ramsay Healthcare Ltd.

Particulars 2015 2016 2017 Change
2015-2016
Change
2016-
2017
Change
2015-2017
Cash flow
from
investing
activity
(1,115,069) (735,462) (423,511) 379607 311951 691558
Cash flow
from
operating
activity
746,235 904969 882187 158734 22782 135952
Cash flow
from
financing
activity
512,958 (156,848) (371481) 356110 214633 141477
Sonic Healthcare Limited