Reference no: EM133451543
Assessment: Financial Decision-Making
You are an intern financial analyst. In referring to the Xero Ltd for 2022 (provided in link below), you are tasked by your supervisor to present a report evaluating the financial performance of the company from different perspectives by addressing the questions listed on pages 2 and 3 below.
*Australian Financial year: 1 July 2021 to 30 June 2022
You must use their own words when presenting relevant information taken from the provided annual report, instead of just copying and pasting.
Questions:
1. State the full name of the Chairman and the CEO of Xero Ltd. As reported in the Annual Report provided, what was the CEO's total remuneration package in 2022?
2. What are Xero's total assets, total liabilities, and total equity in 2021 and 2022?
3. Based on your answers in Question 2, undertake a horizontal analysis by calculating the percentage change (from 2021 to 2022) for total assets, total liabilities, and total equity.
4. Complete the gross profit margin, operating profit margin and net profit margin for Xero in 2021 and 2022.
5. Based on your answer in Question 4, are gross profit margin and operating margin changing in the same direction or not and why?
6. Please calculate the current ratio and quick ratio of Xero in 2022 and comment on the results.
7. Please calculate the debt-to-equity ratio of Xero in 2022 and comment on the result. (Assuming the industry average is 0.5)
8. Please calculate the ROE of Xero in 2021 and 2022. (Total equity at the end of 2020 is $422,366,000)
9. Decompose the calculated 2021 and 2022 ROE from Question 8 to ROA and Equity multiplier, and comment on your result. (Total assets at the end of 2020 is $1,153,688,000)
10. Based on your analysis so far and your research, what are your suggestions for the future operation of the company?