Reference no: EM132370364

Task Information:

To complete the below requirements, you need to locate the income statement and balance sheet for your company in its annual reports for 2016 and 2018.

Note: The financial statements in the 2016 annual reports will also include the financial data for 2015 which you will need to calculate some of the ratios for 2016. Furthermore, the financial statements in the 2018 annual reports will also include the financial data for 2017 as comparative figures.

Task : Annual Report Data Collation

Task Requirements:

Requirement 1 (approx300 words):

Provide a brief overview of your company which includes information that will help you to make decisions regarding the company's financial situation (e.g., when it was established, what industry/s are they in, what type/s of product/s do they sell or what service/s do they perform).

Requirement 2 (approx 400 words):

(a) Explain what a trend analysis is and how it is useful in analysing a company's financial performance.

(b) Prepare a trend analysis* for your allocated company for 2015, 2016, 2017 and 2018** using the following income statement items:

• Sales revenue (or Revenue)

• Grossprofit (if not shown on the income statement, it will need to be calculated, ie Sales revenue less Cost of sales. Additional information to assist in this calculation will be provided during the semester)

• The 3 largest expense categories appearing in the 2018 income statement

• Profit/(loss) after tax***

* The trend analysis should include absolute dollar figures as well as analysis of the trend for the years ended 2015, 2016, 2017 to 2017, and 2018.

** The 2016 and 2015 income statement amounts will be in the 2016 annual report. The 2018 and 2017 income statement amounts will be in the 2018 annual report.

***This will normally be the last profit figure shown in the income statement.

(c) Analyse the results of the trend analysisand explain what it says about your allocated company's financial performance.

Requirement 3 (approx. 600 words):

(a) For 2016*, 2017 and 2018, calculate the following ratios for your allocated company:

i. Return on Assets (Profit/Average total assets x 100)

ii. Return on Equity (Profit available to owners/Average equity x 100)

iii. Debt to Equity ratio (Total liabilities/Total equity x 100)

iv. Current Ratio (Current assets/Current Liabilities)

v. Asset Turnover ratio (Sales revenue/Average total assets)

Note: both the ratio calculations and results should be presented in table/s in your report.

* Some ratios for 2016 will require you to use some financial statement items from 2015.

(b) Prepare an analysis of each ratio calculated in (a) above, on the following basis:

i. Categorise each ratio into the relevant group (profitability, efficiency, liquidity or capital structure)

ii. Describe the purpose of each ratio i.e. how does each ratio assist decision makers; and

iii. Analysis the results of each of your calculations in (a) by explaining what each ratio says about your allocated company's profitability, asset efficiency, liquidity or capital structure.

Requirement 4 (approx. 100 words):

Provide two recommendations which could lead to an increase in your chosen company's financialperformance in the future.

NOTE: The remainder of the word count for your report will be used for your introduction and conclusions.

Attachment:- Assignment Appendix.rar