Microsoft Word XXXXXXXXXXSP6 Assignment 2 - ACC81210ACC81210 Accounting for Managers, Assignment 2,...

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Microsoft Word XXXXXXXXXXSP6 Assignment 2 - ACC81210
ACC81210 Accounting for Managers, Assignment 2, SP XXXXXXXXXXPage 1 of 2
ACC81210 (Accounting for Managers) SP6, 2018
ASSIGNMENT 2 (30 MARKS)
Part A XXXXXXXXXXmarks)
1. Calculate depreciation expense for each of the following asset groups for the year ended 30 June
XXXXXXXXXXmarks)
Asset Delivery trucks Office
equipment
Computers Building
Acquisition cost $135,000 $27,000 $18,200 $315,000
Useful life/units (km for trucks,
years for the rest)
200, XXXXXXXXXX
Estimated residual value $45,000 $3,000 $1,000 $45,000
Depreciation method Units of
production#
Straight-line Reducing-
alance*
Straight-line
Depreciation expense $ $ $ $
# The trucks were driven 34,500 km during the year
* The company uses an approximated reducing-balance rate of 60%. One year of depreciation has
een recorded prior to the cu
ent year.
2. GoGo is a gas supplier. On 1 July, the business had 400,000 cubic metres of gas in stock at a cost of
15 cents per cubic metre, a total cost of $60,000. During the first week in July the business purchased
the following amounts of gas:
July Cubic metres Cost per cubic metre
2 48,000 18 cents
4 30,000 20 cents
5 20,000 22 cents
On 7 July the business sold 450,000 cubic metres of gas to a local energy company.
Calculate:
a) the cost of goods sold based on perpetual inventory and FIFO cost allocation. XXXXXXXXXX2 marks)
) the closing inventory based on periodic inventory and weighted average cost allocation. (3 marks)
ACC81210 Accounting for Managers, Assignment 2, SP XXXXXXXXXXPage 2 of 2
Part B XXXXXXXXXXmarks)
In gradebook you will see a section “Company number” with a number between 1 and 3. This is the
number of the company that you are allocated for this assignment.
1. JB Hi Fi Ltd (JBH) XXXXXXXXXXhttp:
www.jbhifi.com.au
2. Wesfarmers Ltd (WES) XXXXXXXXXXhttp:
www.wesfarmers.com.au
3. Woolworths Ltd (WOW XXXXXXXXXXhttp:
www.woolworthsgroup.com.au
Required:
A. Access the annual reports for your allocated company for the years 2014, 2016 & 2018 in the
Assessment folder of Blackboard. You should only use the figures from the annual reports
provided - do not access your reports or figures from any other source.
B. These annual reports will provide you with six years of financial statements for 2013, 2014,
2015, 2016, 2017 & 2018.
C. Calculate the following ratios for the five years XXXXXXXXXXfinancial information will
assist you in calculating averages, where necessary). Most ratios are available in the textbook -
and a reference is given for those that are not in the text.
1. Return on total assets (available on PERCI)
2. Rate of return on ordinary equity
3. Operating profit margin
4. Gross profit Margin
5. Inventories turnover period
6. Settlement period for debtors
7. Cu
ent ratio
8. Quick ratio (acid test ratio)
9. Debt to assets ratio (available on PERCI)
10. Interest cover ratio (Times interest earned)
11. Assets turnover (available on PERCI)
12. Earnings per share
13. Price-earnings ratio (refer to Blackboard for stock price history for five years).
14. Dividend yield (refer to Blackboard for the dividend history for five years).
In each of the ratios, you should firstly write out the ratio formula that you used and then show the
numbers that you used to calculate your answer, before showing your answer. Your answer should be
in a format that indicates whether it is in %, times, ratio or days and to two decimal places.
XXXXXXXXXX3.5 marks)
D. Given the ratios over five years, comment on the company’s profitability, efficiency, liquidity,
financial gearing and investment ratios. Approximately 1,000 words.
Note: You should also refer to coverage in the financial press that is related to your company. This
will help you in evaluation of the company - please cite your sources! XXXXXXXXXXmarks)
E. Examine the Statements of Cash Flows of your company for the years 2017 and 2018. Discuss
the changes in each of the cashflows from operating, investing and financing activities. From this
eport, what can you glean about the business' activities in each year? (Approximately 300 words)
XXXXXXXXXX5 marks)
F. Using the answers you calculated in part C, enter your answers into the area provided in
Blackboard in assessments before uploading your assignment in the assessments section. This
portion of your assignment will be automatically graded, so it is very important that you follow
the instructions outlined here and in Blackboard. XXXXXXXXXX3.5 marks)

ANNUAL REPORT
2016
916CRN3440_JB_Hi-Fi_Annual_Report_ XXXXXXXXXXCover_v2.indd 2 23/08/ XXXXXXXXXX:55:50 PM
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Financial Summary
JB Hi-Fi Limited ABN XXXXXXXXXX
Sales $3.95
NPAT(i) $152.2m Stores
EBIT $221.2m
FINANCIAL PERFORMANCE
XXXXXXXXXX2016 Growth
Sales $3.13b $3.31b $3.48b $3.65b $3.95b 8.3%
EBIT $161.5m $177.8m $191.1m $200.9m $221.2m 10.1%
NPAT(i) $104.6m $116.4m $128.4m $136.5m $152.2m 11.5%
Earnings per share 105.9cps 117.7cps 128.4cps 137.9cps 153.8cps 11.5%
Total dividend - fully franked 65.0cps 72.0cps 84.0cps 90.0cps 100.0cps 11.1%
XXXXXXXXXX2016
(i) Profi t attributable to the owners of JB Hi-Fi Limited, excludes non-controlling interests
XXXXXXXXXX2016
$3.31
$177.8m
$3.13
$161.5m
$3.48
$191.1m
$3.65
$200.9m
XXXXXXXXXX2016
$116.4m
$104.6m
$128.4m
$136.5m
XXXXXXXXXX2016
177
168
182
187
$3.95
$221.2m
$152.2m
194
916CRN3440_JB_Hi-Fi_Annual_Report_ XXXXXXXXXXInside Cover_v3.indd 2 25/08/ XXXXXXXXXX:26:24 PM
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1
Dear fellow shareholder,
It is very pleasing to report that the year ended 30 June 2016
was another record year for JB Hi-Fi Limited with sales, profits
and dividends all up on the prior year. This result was driven
y a combination of sales growth, solid gross margins and
our low cost of doing business, underpinned by our continued
emphasis on customer service.
Overview
JB Hi-Fi Limited achieved sales of $3.95 billion in FY16,
with total sales growth of 8.3% and comparable sales growth
of 5.4%. Sales momentum was solid throughout the year.
Particularly pleasing was how we cycled strong June sales
from the prior year, with strong sales driven by tax time buying.
Net profit after tax was up 11.5% to $152.2m, earnings per
share was up 11.5% to 153.8 cents per share and the total
dividend for FY16 was up 10 cents per share on the prior year
to 100 cents per share.
Gross profit increased 8.4%, with gross margin improving
three basis points to 21.9%, which was pleasing given the
change in sales mix.
Total operating costs remained well controlled and were in
line with our expectations. We maintained our low CODB
through continued focus on productivity and minimising
indirect expenditure. Our low cost of doing business, at 15.2%,
continues to be a competitive advantage and remains lower
than our major listed competitors. Store wages remained well
controlled during FY16 as we continued to deliver the high
standard of customer service that JB Hi-Fi is known for.
The balance sheet continues to grow in strength with relatively
low financial and operating leverage, evidenced by our solid
fixed charges cover of 3.5 times, gearing of 0.4 and interest
cover of 57.3 times.
JB Hi-Fi is a discount retailer with the ability to consistently offer
everyday low prices through the scale of our operations, high
stock turnover and low cost of doing business. We offer one of
the largest ranges of home entertainment, consumer electronic
and home appliances at discounted prices, positioned to
appeal to all customers.
JB Hi-Fi has the ability to
ing
ands to life and create
engagement in categories. We have the reputation for taking
the deal, price leadership and being first to market with the
latest technology. We have a high level of loyalty and trust from
our customers and have been recognised in the top three in
the Australian Market Research (“AMR”) Corporate Reputation
Index over the past five years, and the number one company

qfile_636781368893920568_123265_1.pdf qfile_636781368893920568_123265_2.pdf qfile_636781368893920568_123265_3.pdf qfile_636781368893920568_123265_4.pdf

Payal · Accepted Answer

Ratio Analysis - Theory
	Solvency Ratios
	Current Ratio (CR)	
Current Ratio (CR) =    Current Assets
                                       Current Liabilites	This ratio is a reflection of company's financial strength. This is a measure of short term liquidity which indicates a firms ability to meet its short-term obligations/current liabilities from its currrent assets. A company is considered insolvent, when this ratio is less than 1,which means its current liabilities exceed its current assets. 
	Quick Ratio (QR)	Quick Ratio (QR) =   Cash assets + Receivables 
                                          Current Liabilities	Quick Ratio is also called as the "Acid Test" Ratio. This is a more rigous measure of short term liquidity because it looks at the company’s most liquid assets and compares them to current liabilities.It tests whether the company can meet its current obligations even when adverse situations arise.
	Leverage Ratios
	Debt/Equity	
Debt/equity =  Debt
                             Equity                        
	The Debt-to-Equity Ratio (or Leverage Ratio)  measures how much the company is dependent on debt financing as compared to owner’s equity. It shows how much of a business is owned and how much is owed.It shows how much a firm is levered or the extent of gearing used by the company.
	Debt/Capital	
Debt/capital =  Debt
                              Capital                        
	This metric shows the porportion of debt used by the company to finance its operations when compared with its total capital.
	Debt/ Assets	
Debt/Assets =   Debt
                              Assets                        
	This metric measures the porportion of assets that is financed by debt as compared with owners equity.In other words, this ratio simply tells the amount of assets financed by creditors instead of investors.
	Interest Coverage 	Interest Coverage =            EBIT         
                                     Interest expenses	This ratio measures the company's ability to make timely  interest payments on its debt. 
	Turnover Ratios
	Inventory Turnover Ratios	Inventory Turnover   =    Cost of goods sold
                                                  Average Inventory	The Inventory Turnover Ratio measures the number of times inventory was “turned over” or inventory was sold during a given time period.  This ratio serves a good indication about the purchasing and production efficiency of the company..
	Inventory Days in Hand	Inventory Days  =                            365                 
                                          Inventory Turnover Ratio	Once you have calculated the Inventory Turnover Ratio, next step would be to calculate the actual number of days of inventory you have in hand.
	Debtors Turnover Ratio	Debtors Turnover Ratio  =                    Sales          
                                                            Average Debtors	This Ratio measures the number of times accounts receivable was turned over during a given time period of time. A higher ratio indicates a shorter time from making the actual sales to collection of cash.
	Debtors Days 	Debtors Days  =                              365             
                                              Debtors Turnover Ratio	Once you have calculated the Receivables Turnover Ratio, next step would be to calculate the actual number of days, accounts receivable was outstanding.
	Accounts Payable Turnover	Payables Turnover   =    Cost of goods sold
                                                Average Payables	The Accounts Payable Turnover Ratio measures the number of times, Payables were "turned over" during a given period of time.  This Ratio tells about how many times a company  pays off its accounts payable.
	Accounts Payable Days	Payables  Days =                                  365                 
                                            Payables Turnover Ratio	Once you have calculated the Receivables Turnover Ratio, next step would be to calculate the actual number of days, accounts payables were outstanding.Again, this is important ratio which tells whether the company has enough cash to run its business & to pay its suppliers on time.
	Net Assets Turnover ratio	Net Assets Turnover Ratio   =             Sales          
                                                                  Net assets	This ratio tells how efficiently company uses its assets to generate sales. Higher the ratio, generally it is better.
	Return Ratios
	Return on Assets Ratio	Return on Assets Ratio   =                Net Income       
                                                               Average assets   	Return on assets ratio or ROA measures how efficiently a company is using its assets to generate  profits during a given period of time.
	Return on Equity Ratio	Return on Equity Ratio    =                  Net Income       
                                                                  Average Equity	Return on assets ratio or ROA measures the ability of the firm to generate profits for its shareholders  during a given period of time.
	Operating profit Margin	Operating Margin Ratio   =                 EBIT              
                                                                     Sales	Measures operating profitability of each dollar of sales for a company.
	Gross Profit Margin	Gross Profit margin     =                Gross Profit              
                                                                    Sales	How efficiently company uses its material & labour to produce & sell its products profitably.

Microsoft Word XXXXXXXXXXSP6 Assignment 2 - ACC81210 ACC81210 Accounting for Managers, Assignment 2, SP XXXXXXXXXXPage 1 of 2 ACC81210 (Accounting for Managers) SP6, 2018 ASSIGNMENT 2 (30 MARKS) Part...

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