Calculate current ratio and quick asset ratio

Assignment Help Managerial Accounting

Reference no: EM131211857 , Length: word count:1500

AFA1105 ACCOUNTING FOR MANAGEMENT

TASK:

Download from LMS a copy of Joyce Corporation Ltd (the Company) annual reports for the financial years 2015 and 2014 and write a report of the Company under the following sections.

A) EXECUTIVE SUMMARY (Approximately 200 words)

This section should be written up after your report has been written. It should give a summary of your main findings about Joyce Corporation Ltd in terms of its Profitability, Liquidity, Asset Efficiency, Capital Structure and Market Performance.

B) COMPANY OVERVIEW (Approximately 200 words)

This section should give the reader a broad sense of the Company's operations (for example what its main operations are, the number of stores, the regions they operate in, the industry and competitors etc). Such information is easily available from the internet and also from the Chairman and Managing Director's Review of the 2015 annual report. Please reference your sources.

C) PROFITABILITY (Approximately 200 words)

From the Company's 2015 and 2014 financial statements and notes to financial statements, calculate the following ratios based on what you were taught.

Use the 2015 and 2014 figures from the 2015 annual report, and use the 2013 figures from the 2014 annual report. Remember to use average numbers for some ratios as taught in class.

		2015	2014
Return on Equity (ROE)	Net Profit After Tax / Average Equity (%)
Return on Assets (ROA)	Net Profit After Tax / Average Assets (%)
Gross Profit Margin	Gross Profit / Sales Revenue (%)
Net Profit Margin	Net Profit After Tax / Total Revenue (%)

Explain what the ratios mean in general and comment specifically on what they tell about the Company's performance.
Examine how the ratios are trending and comment/explain if the trend is favourable or not. Offer suggestions why a change in the ratio may have occurred by looking at how its components change in relation to each other.

D) ASSET EFFICIENCY (Approximately 200 words)

Calculate the Company's ratios below based on what you were taught.

		2015	2014
Asset Turnover Ratio	Total Revenue / Average Assets (times)
Days Inventory	(Average Inventory / Cost of Goods Sold) x 365 (days)
Days Debtors	(Average Debtors/ Sales Revenue) x 365 (days)

Explain what each ratio measures in general, and comment on how efficient Joyce Corporation was.
Examine how the ratios are trending and comment/explain if the trend is favourable or not. Offer suggestions why a change in the ratio may have occurred by looking at how its components change in relation to each other.

E) LIQUIDITY (Approximately 200 words)

Calculate Current Ratio and Quick Asset Ratio for the years 2015 and 2014. Show it in a table as in the previous sections and comment on the Company's liquidity position.

F) CAPITAL STRUCTURE (Approximately 200 words)

Calculate the following ratios (1) Debt/Equity ratio, (2) Debt ratio (3) Equity ratio. Show it in a table similar to the previous sections and comment on the Company's capital structure.

Below are the ratios of rival companies Fantastic Holdings Ltd and Nick Scali Ltd. Use this information in your comments about the Company's capital structure.

Fantastic Holdings Ltd			Nick Scali Ltd
	2015	2014		2015	2014
Debt Equity Ratio (TL/TE)	70.3%	64.7%	Debt Equity Ratio (TL/TE)	108.4%	100.4%
Gearing/Debt Ratio (TL/TA)	41.3%	39.3%	Gearing/Debt Ratio (TL/TA)	52%	50.1%
Equity Ratio (TE/TA)	58.7%	60.7%	Equity Ratio (TE/TA)	48%	49.9%

(G) Interest Servicing ratio (Interest Cover) (No more than 50 words)

Calculate and comment on the Company's Interest Servicing Ratio for 2015 and 2014.

(H) Cash Flow (No more than 50 words)

Examine the Company's Statement of Cash Flow and answer the following short answer questions:

(a) What are the names of the three sections that show the Company's net cash flows?

(b) Which section shows the strongest net cash inflow for the Company?

(I) Market Performance (Approximately 100 words)

From https://au.finance.yahoo.com or elsewhere, obtain the Company's share prices on 30 June 2015 and 2014.

Using these market prices and the Earnings per Share (EPS) for the Company shown in Note 7 of its 2015 annual report, calculate the company's Price Earnings ratio (P/E ratio).

What does the Company's P/E ratio indicate compared to the P/E ratios of competitors as shown below?

	P/E ratio of Fantastic Holdings Ltd	P/E ratio of Nick Scali Ltd
2015	17.7 times	16.1 times

Attachment:- Annual reports.rar

Reference no: EM131211857

Questions Cloud

Find and summarize the article the debate over doing good : Find and summarize the Grow, Hamm, & Lee's "The Debate over Doing Good". Your review should include all six articles. You should provide a 100-150 word paragraph for each source addressing each of four key ideas in your summary.

What is the function of the timestamping : In the token-passing mutual exclusion algorithm, is the timestamping used to reset clocks and correct drifts, as in the distributed queue algorithms? If not, what is the function of the timestamping?

International trade or international finance issues : You will need to find 2 current event news articles (the articles must published between September 5-11, 2016) related to international economic issues. Articles must include either international trade or international finance issues

Describe movement of the person in platos allegory of cave : Describe the movement of the person in Plato's allegory of the cave and being very specific about the various stages in this movement.

Calculate current ratio and quick asset ratio : Calculate Current Ratio and Quick Asset Ratio for the years 2015 and 2014. Show it in a table as in the previous sections and comment on the Company's liquidity position

Examines the ways in which climate change : CVE80010: Principles of Sustainability - Your task is to write a report that examines the ways in which climate change is predicted to impact upon your home city. What you consider to be your home city should be the one closest to your heart

Define each characteristic of data quality : As you learned about the 10 characteristics of data quality:- define each characteristic of data quality, then provide a concrete example of this quality.

How to construct a moore fsm : It is straightforward to show that every Moore FSM is a Mealy FSM. Given a Mealy FSM, show how to construct a Moore FSM whose outputs for every input sequence are identical to those of the Mealy FSM.

Total revenues and the total costs : The attached spreadsheet shows the total revenues and the total costs at various output levels (Number of Cans) for the company "Dave's Maple Syrup".

User Account

All Pages