Assignment 3: Company analysis report
Word/time limit: 1500 (+/- 10%) Excludes:Title page; Table of contents; Executive summary; Graphs, tables, diagrams, figures; Appendices; Reference list.
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Assignment overview : ACC10007 Financial Information for Decision Making Assignment Help
Based on your analysis of relevant information relating to Bega Cheese Limited, you are required to prepare a structured report (see recommended structure detailed below) with focus on the profitability, operating efficiency, liquidity, gearing and cash flows of the company. Business entities like Bega are accountable for generating profits with the assets employed. In addition, they must pay their debts when they fall due, and plan for future profits. As part of your assessment of Bega you are required to calculate specific ratios for each of the years being considered using data from the financial statements in the annual reports. The ratios should support your analysis.
Your report should cover a 3-year period for the years ending June 30th2014 to 2016, and should be sufficiently broad in scope to demonstrate your understanding of your findings following the analysis. The 2017 annual report has recently been released however your ratio calculations and the focus of your report is to be based on the 2014, 2015 & 2016 annual reports. Detailed requirements and mark allocations are shown below. Bega Cheese 2016 annual report (PDF 4.7 MB) is provided for you- note that you will still have to research previous years.
Related learning outcomes
This assignment assesses the following unit learning outcomes:
- Apply accounting tools to prepare financial reports for both external and internal business use.
- Research and interpret financial information in order to analyse problems and to aid business decision making.
- Organise and communicate financial information, supported by well-reasoned arguments as appropriate.
- Work both independently and as a member of a diverse team.
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Company and industry background
- Briefly profile Bega Cheese Limited– its history, financial highlights and other relevant company details, and summarise the nature and current state of the industry in which it operates. This section of work will help contextualise the report in terms of key company information and the industry (and wider) environment in which the firm operates.
- Historyshould include: when and where it started operations; by who; major expansions & acquisitions from then to now; types of products / services it offers; significant business relationships; when it listed on the ASX?
- Industryshould include: identifying which industry it operates in, an understanding of the state of the industry and identifying major competitors?
Manual calculation of specific ratios
The minimum ratios1 to be manually calculated for each of the 3 years are:
- return on shareholders’ equity
- return on total assets2
- net profit margin2
- inventory turnover
- settlement period for accounts receivable3,4
- settlement period for creditors/accounts payable5,6
- asset turnover
- current ratio
- cash flow from operations
- gearing ratio7
- financial gearing.
Footnotes for calculating ratios:
- Ratio formulas as per the Explanation of ratios (PDF 545KB) from week 7. Base your analysis on the consolidated financial statements.
- Assume that Finance costs = interest expense.
- Assume that 100% of sales are credit sales.
- Assume ‘Trade and other receivables’ = Accounts Receivable.
- Assume ‘Trade and other payables’ = Accounts Payable.
- Assume all inventory purchases are on credit. As the purchases figure is not available you will need to calculate it (HINT: Use ‘Cost of Sales’ formula).
- To calculate the gearing ratio use the following formula:
Assessment of Other Relevant Information
- An assessment of other, typically non-financial information relevant to the assessment (including; local and global events, industry developments and issues, structural changes to the company, mergers or acquisitions, economic and social factors and any other relevant issues which may potentially impact on the operations of the company).
- Your report has focused on the financial performance of Bega. Consider its environmental and social performance.
- Consider recent local and international economic conditions and the impact on Bega and its competitors.
- Consider the financial statements for the year ended 30 June 2017. Identify the transaction, not part of its ordinary day to day activities, that had a significant impact on Bega’s financial statements. Identify how it impacted each of the three key financial statements.