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Accounting Fundamentals This assignment involves analyzing the financial statements and other information relating to a number of Australian public companies. These companies are listed below. Excel...

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Accounting Fundamentals

This assignment involves analyzing the financial statements and other information relating to a number of Australian public companies. These companies are listed below.

Excel to be used for doing assignment

Listed companies names:

1. API Limited (stock code API)

2. Nick Scali ltd (Stock code NCK)

3. JB Hi Fi Limited (stock code JBH)

4. The reject shop limited (Stock code TRS)

5. Super Retail Group limited (Stock code SUL)

6. Blackmores limited (Stock code BKL)

TASKS

1. Go to the website for your allocated company and obtain the income statement and balance sheet for the company for the financial year 2014, 2015, 2016 and 2017. You will find this information in the relevant Annual reports of the company.

2. Based on the information contained in this statements calculate for each company for the relevant financial years. You must show the formula used and your calculations.

a. The net profit Margin

b. Current ratio

c. Inventory Turnover

d. Asset Turnover Ratio

e. Leverage Ratio

f. Return on equity

g. Return on total assets

h. Earnings per share (EPS)

i. Net debt to equity ratio and

j. Total return to shareholders.

3. Demonstrate and explain what would happen to the 2017 return on equity and the net debt to Equity ratios if your allocated company just prior to the end of the 2017 financial year raised an additional $200 million loan from the bank. Which it invested entirely in new plant and equipment. Assume that the immediate effect on sales and net profit was zero.

4. Using the ratios calculated in task 1 of this case study. Compare and contrast the financial performance of the companies over the period of your analysis.

5. Use your analysis of the financial performance of the companies over the past 3 years to explain any differences in the Total return to shareholder between the companies over the past 3 years.

6. Compare and contrast the current market value of each company. Use the ratio you have collected, other information from the media to provide observations about the value of these companies (i.e. cheap or expensive?)

**Word counts – 2500 words

qfile_636761108378189432_122855_1.pdf
Answered Same Day Oct 26, 2020

Solution

Aarti J answered on Oct 29 2020
150 Votes
Financial Analysis Report
Course Name
Course Date
Student’s Name
Financial Analysis
Abstract
This report analysis, we will be analysing the financials of API Limited, Nick Scali Ltd, JB Hi Fi Limited, The reject shop limited, Super retail group limited and Blackmores from the year 2014 to 2017. The financial data was taken from the annual reports of the companies. There are different tasks which has been taken to analyze the performance of the companies. Firstly different ratios has been analyzed to analyse the performance to know its profitability through net profit margin, return on assets and return on equity. Liquidity with the help of cu
ent ratios, leverage ratios through net debt to equity ratio and efficiency through asset turnover ratio and inventory turnover ratios. The next task to analyse the net debt with the increase in the debt of $200 million. The third section compares the performance of all the companies and fourth section helps in analysing market value of the companies.
Introduction
This report analysis, we will be analysing the financials of API Limited, Nick Scali Ltd, JB Hi Fi Limited, The reject shop limited, Super retail group limited and Blackmores from the year 2014 to 2017. The financial data was taken from the annual reports of the companies. These companies are traded in Australia stock exchange. The data has been collected from the annual reports of the company and the data for its market value has been calculated from yahoo finance.
Task 1: Financial Ratios
In this section, major financial ratios has been calculated and analysed for the company for the year 2017 to 2014. The formulas that has been used by for analysing the performance of the companies includes:
Table of formula:
    
    Formula
    Net Profit Margin
    
    Cu
ent Ratio
    
    Capitalization Ratio
    
    Assets Turnover Ratio
    
    Average total assets
    
    Leverage Ratio
    
    Average total equity
    
    Return on Equity
    
    Return on total Assets
    
    Earnings per Share (EPS)
    
    Net Debt to Equity Ratio
    
    Total Return to Shareholde
    
The calculations and the formulas used for calculating the ratios includes:
    API Limited (stock code API)
    
    2014
    2015
    2016
    2017
    Net profit margin
    -2.71%
    1.25%
    1.35%
    1.29%
    Net income
    -90771
    43126
    51670
    52371
    Divide: Sales
    3345946
    3457400
    3839987
    4061200
    
    
    
    
    
    Cu
ent ratio
    1.36
    1.28
    1.34
    1.32
    Cu
ent Assets
    931816
    993807
    1128966
    1120740
    Divide: Cu
ent liabilities
    686828
    777720
    845632
    851033
    
    
    
    
    
    Inventory turnove
    8.51
    8.25
    8.13
    8.93
    Cost of goods sold
    2914142
    3003613
    3362053
    3567817
    Divide: Inventory
    342482
    364206
    413782
    399344
    
    
    
    
    
    Asset turnove
    2.60
    2.58
    2.65
    2.80
    Sales
    3345946
    3457400
    3839987
    4061200
    Divide: Assets
    1289066
    1342548
    1449709
    1451076
    
    
    
    
    
    Leverage ratio
    2.68
    2.66
    2.70
    2.62
    Assets
    1289066
    1342548
    1449709
    1451076
    Divide: Equity
    480737
    505402
    536695
    554246
    
    
    
    
    
    Return on equity
    -18.88%
    8.53%
    9.63%
    9.45%
    Net income
    -90771
    43126
    51670
    52371
    Divide: Equity
    480737
    505402
    536695
    554246
    
    
    
    
    
    Return on Total assets
    -18.88%
    8.53%
    9.63%
    9.45%
    Net income
    -90771
    43126
    51670
    52371
    Divide: Total assets
    480737
    505402
    536695
    554246
    
    
    
    
    
    Earnings per share
    -18.60
    8.71
    10.46
    10.59
    Net income
    -90771
    43126
    51670
    52371
    Divide: Outstanding shares
    4881.16
    4952.93
    4939.68
    4946.39
    
    
    
    
    
    Net debt to equity
    2.68
    2.66
    2.70
    2.62
    Debt
    1289066
    1342548
    1449709
    1451076
    Divide: Equity
    480737
    505402
    536695
    554246
    
    
    
    
    
    Total return to shareholders
    27.55%
    182.20%
    12.96%
    -12.99%
    End year price
    0.59
    1.62
    1.77
    1.47
    Less start year price
    0.49
    0.59
    1.62
    1.77
    Add: Dividends
    0.035
    0.045
    0.06
    0.07
    Less: Start year price
    0.49
    0.59
    1.62
    1.77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nick Scali
    
    2014
    2015
    2016
    2017
    Net profit margin
    10.06%
    10.96%
    12.88%
    15.99%
    Net income
    14236
    17077
    26150
    37236
    Divide: Sales
    141442
    155743
    203045
    232908
    
    
    
    
    
    Cu
ent ratio
    0.18
    1.66
    1.37
    1.47
    Cu
ent Assets
    55180
    58865
    55493
    66847
    Divide: Cu
ent liabilities
    311153
    35565
    40384
    45370
    
    
    
    
    
    Inventory turnove
    2.95
    2.53
    3.08
    3.01
    Cost of goods sold
    56019
    61280
    79676
    87346
    Divide: Inventory
    19013
    24212
    25847
    29045
    
    
    
    
    
    Asset turnove
    1.76
    1.62
    1.46
    1.92
    Sales
    141442
    155743
    203045
    232908
    Divide: Assets
    80426
    96337
    139116
    121471
    
    
    
    
    
    Leverage ratio
    2.00
    2.08
    2.41
    1.73
    Assets
    80426
    96337
    139116
    121471
    Divide: Equity
    40130
    46226
    57794
    70384
    
    
    
    
    
    Return on equity
    35.47%
    36.94%
    45.25%
    52.90%
    Net income
    14236
    17077
    26150
    37236
    Divide: Equity
    40130
    46226
    57794
    70384
    
    
    
    
    
    Return on Total assets
    35.47%
    36.94%
    45.25%
    52.90%
    Net income
    14236
    17077
    26150
    37236
    Divide: Total assets
    40130
    46226
    57794
    70384
    
    
    
    
    
    Earnings per share
    17.58
    21.08
    32.28
    45.97
    Net income
    14236
    17077
    26150
    37236
    Divide: Outstanding shares
    810
    810
    810
    810
    
    
    
    
    
    Net debt to equity
    2.00
    2.08
    2.41
    1.73
    Debt
    80426
    96337
    139116
    121471
    Divide: Equity
    40130
    46226
    57794
    70384
    
    
    
    
    
    Total return to shareholders
    18.35%
    32.65%
    58.39%
    37.39%
    End year price
    2.45
    3.1
    4.68
    6.09
    Less start year price
    2.18
    2.45
    3.1
    4.68
    Add: Dividends
    0.13
    0.15
    0.23
    0.34
    Less: Start year price
    2.18
    2.45
    3.1
    4.68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    JB hi fi limited
    
    2014
    2015
    2016
    2017
    Net profit margin
    3.63%
    3.73%
    3.85%
    3.06%
    Net income
    126.4
    136.5
    152.2
    172.4
    Divide: Sales
    3483.7
    3662.1
    3954.5
    5628
    
    
    
    
    
    Cu
ent ratio
    1.64
    1.62
    1.57
    1.32
    Cu
ent Assets
    578.147
    616.898
    702.4
    1170.7
    Divide: Cu
ent liabilities
    352.193
    380.336
    446.8
    885.8
    
    
    
    
    
    Inventory turnove
    5.70
    6.22
    5.65
    5.11
    Cost of goods sold
    2727.79
    2853.8
    3089.1
    4397.5
    Divide: Inventory
    478.87
    458.6
    546.4
    859.9
    
    
    
    
    
    Asset turnove
    4.05
    4.09
    3.99
    2.29
    Sales
    3483.7
    3662.1
    3954.5
    5628
    Divide: Assets
    859.841
    895.013
    992.3
    2452.3
    
    
    
    
    
    Leverage ratio
    2.92
    2.61
    2.45
    2.87
    Assets
    859.841
    895.013
    992.3
    2452.3
    Divide: Equity
    294.63
    343.47
    404.7
    853.5
    
    
    
    
    
    Return on equity
    42.90%
    39.74%
    37.61%
    20.20%
    Net income
    126.4
    136.5
    152.2
    172.4
    Divide: Equity
    294.63
    343.47
    404.7
    853.5
    
    
    
    
    
    Return on Total assets
    42.90%
    39.74%
    37.61%
    20.20%
    Net income
    126.4
    136.5
    152.2
    172.4
    Divide: Total assets
    294.63
    343.47
    404.7
    853.5
    
    
    
    
    
    Earnings per share
    1.26
    1.38
    1.52
    1.54
    Net income
    126.4
    136.5
    152.2
    172.4
    Divide: Outstanding shares
    99.97
    98.98
    100.2
    111.7
    
    
    
    
    
    Net debt to equity
    2.92
    2.61
    2.45
    2.87
    Debt
    859.841
    895.013
    992.3
    2452.3
    Divide: Equity
    294.63
    343.47
    404.7
    853.5
    
    
    
    
    
    Total return to shareholders
    13.46%
    11.21%
    28.50%
    4.90%
    End year price
    18.3
    19.48
    24.1
    23.37
    Less start year price
    16.81
    18.3
    19.48
    24.1
    Add: Dividends
    0.772
    0.872
    0.932
    1.911
    Less: Start year price
    16.81
    18.3
    19.48
    24.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    The reject shop
    
    2014
    2015
    2016
    2017
    Net profit margin
    2.04%
    1.88%
    2.14%
    1.55%
    Net income
    14508
    14239
    17100
    12346
    Divide: Sales
    711534
    756800
    800063
    794064
    
    
    
    
    
    Cu
ent ratio
    1.40
    1.83
    1.49
    1.63
    Cu
ent Assets
    111931
    124476
    124566
    111372
    Divide: Cu
ent liabilities
    79734
    67937
    83805
    68487
    
    
    
    
    
    Inventory turnove
    3.95
    4.22
    4.69
    4.93
    Cost of goods sold
    398534
    422922
    461938
    457759
    Divide: Inventory
    100860
    100240
    98515
    92906
    
    
    
    
    
    Asset turnove
    5.28
    6.29
    3.47
    3.63
    Sales
    711534
    756800
    800063
    794064
    Divide: Assets
    134673
    120272
    230595
    218740
    
    
    
    
    
    Leverage ratio
    1.12
    0.89
    1.70
    1.62
    Assets
    134673
    120272
    230595
    218740
    Divide: Total Equity
    120272
    134673
    135342
    135153
    
    
    
    
    
    Return on equity
    12.06%
    10.57%
    12.63%
    9.13%
    Net income
    14508
    14239
    17100
    12346
    Divide: Equity
    120272
    134673
    135342
    135153
    
    
    
    
    
    Return on Total assets
    12.06%
    10.57%
    12.63%
    9.13%
    Net income
    14508
    14239
    17100
    12346
    Divide: Total...
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