Reference no: EM13138894

The financial statements of an entity, with their accompanying schedules and explanatory notes, are the main means by which the users of general purpose financial reports inform themselves as to the operations, financial position, financial stability and future prospects of the organisation. 
Therefore it is important that users of financial reports are able to understand and analyse these financial reports. 
Objectives of this assignment are to provide you with; 
Practical experience in analysing the financial statements of an entity. The assignment data has been created from the accounts of real public companies. 
• Demonstrating your understanding of the basic concepts and assumptions used in the preparation of general purpose financial reports. 
• Demonstrating your ability to effectively analyse general purpose financial reports. 
Part A - Download and examine the relevant financial data. 
All that is required for this part is to download and read the relevant data. (Marks and Word count for this part is not relevant) 
This first part requires you to download the financial data of the corporation you have been allocated and undertake a small amount of research related to the assignment. 
The financial data of the corporation you have been allocated may be different from those allocated to other students. 
If you are unable to access this file in MS Excel format, then please contact the Lecturer who will provide you with a copy of the data in PDF format. 
In this assignment you are required describe various aspects of the company and to undertake an analysis of the company. 
The assignment will require you to undertake a small amount of research in respect to extend your understanding of some of the concepts. Where these concepts are not sufficiently (for the purpose of this assignment) covered in the text and readings, a link to one of several websites that covers the concept(s) is provided in this document and on the PRBA007 Learnline site. 
You may wish to do further research to ensure that you fully understand and can adequately apply the concept. 
The financial data of the corporation allocated to you are available on the PRBA007 Accounting for Managers Learnline site. 
The financial data will relate to a public company in a specific industry. You should also locate a recent Annual Report of an Australian public company in the same or similar industry and briefly peruse the contents. A list of companies, by industry, has been provided with the assignment details on Learnline to assist you however you may choose to use any company, provided that the company you choose is a public company in the same industry as the company chosen for your assignment. You can use this information to assist you in the completion of several of the assignment tasks below. You may wish to use these additional financial reports as a benchmark for your analysis and to extract other relevant information. 
Part B - Report on the nature of a Reporting Entity (10% of the assignment assessment marks) 
You are required to provide a report of approx 250 words or less (excluding attachments and references), in MS Word and/or PDF format with each document lodged accompanied by the Relevant Coversheet (provided). The style of your essay or report is not important provided it is clear and understandable and properly referenced using a accepted reference technique5 
Using a Report style is recommended but not compulsory. 
This second part requires you to consider and discuss the nature of a Reporting Entity and the likely users of the General Purpose Financial Reports of the public company chosen for your assignment. 
Each of the corporations chosen when compiling the financial data is a reporting entity. (Refer to Definition of the Reporting Entity https://www.aasb.gov.au/admin/file/content102/c3/SAC1_8-90_2001V.pdf ) 
a. What are the conditions necessary to categorise an organisation as a Reporting Entity. 
b. Speculate on the reasons that your company has been categorised as a reporting entity. You can use the information provided in the company (from a related industry) you have chosen to use as a benchmark, as well as other reasonably relevant information. 
c. Who would you consider to be the main users of the Corporation report? Provide a list of the main users and for each type of user, detail what type of decisions you think they would make based on the information contained in the report. 
d. Discuss how the fact that the corporation is a reporting entity, would have an impact on your analysis of the financial performance of the corporation. 
5 Any generally accepted referencing technique is acceptable however it should be used consistently throughout your paper School of Law and Business Semester Two, 2013 Page 6 of 9 Faculty of Law Business and Arts Higher Education, Internal prba007_assign02_s22013.wpd 
Part C - Prepare a Trend (Horizontal and Vertical) and a Ratio Analysis 
All that is required for this part is the Analysis Schedules showing the details of the calculations undertaken. They can be provided in MS Word, MS Excel or PDF format, accompanied by the Relevant Coversheet (provided). (Word count for this part is not relevant) 
This third part also requires you to: 
Conduct a financial analysis of the company chosen for you, assuming that you are advising your parents who are interested in investing a significant amount of their retirement savings in the Corporation's shares (as at the date of the Corporation 2012 annual report). The financial analysis should include 
a. A 3-year trend analysis, using 2010 as the base year. Although the text describes trend analysis it does not provide specific examples on how to prepare a trend analysis. A link to one of several websites that covers the concept(s) related to Vertical6 and Horizontal7Trend Analysis is provided on the PRBA007 Learnline site 
b. Calculations sufficient for an evaluation of the company's profitability, liquidity, and financial stability using information provided in the financial data and other external information you may deem relevant. As there are are many variations in the details of various ratio formulae, a list of financial ratios has been provided on the PRBA007 Learnline site. You should refer to this list for determining the correct formulae to use. You do not need to use all the ratios provided, and you may use any additional ratios that you feel are necessary. If you use additional ratios to those provided in the list or the text, then you should provide a reference to the source. 
The various parts and calculations in these schedules should be clearly cross referenced to your written analysis conducted for Part D. The cross references should be clear and unambiguous. 
Part D - Report on your analysis 
You are required to provide a report of approx 500 words or less (excluding attachments and references), with references to the relevant calculations in Part C, in MS Word, MS Excel and/or PDF format (or combination) with each document lodged accompanied by the Relevant Coversheet (provided). The style of your essay or report is not important provided your ideas, arguments and/or recommendations etc are clear and understandable and properly referenced using a accepted reference technique8 Using a Report style is recommended but not compulsory. 
This fourth part requires you to: 
Prepare a report, based on the analysis provided above, to your client (ie. your parents). Include in your report references to the analysis you provided above. Your report should refer to the calculations carried out in Part C, clearly cross referenced Include in your report any limitations inherent in this form of financial analysis.