Assignment help: ACCT 1009 Accounting Principles for Business Decisions


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Assignment 2 – Financial Reporting Analysis

ACCT 1009 Accounting Principles for Business Decisions

SP 2, 2017

Due Date: Tuesday, 2 May  at 2:00 PM

 

 

Total Marks: 100 (Weighting: 30%)

Maximum 1500 words

 

Core Objective: The aim of this assignment is to apply qualitative and quantitate analysis on financial information for decision making, and to develop students’ analytical, problem solving and presentation skills.

 

Course objectives covered by this assessment:

CO2: Analyse and interpret information about financial position and performance;

CO3: Apply accounting principles to business decision making; and

CO5: Use  financial accounting data to analyse a simple investment decision.

 

This is an individual assessment.

 

Case Study

 

Doray Minerals Limited (http://www.dorayminerals.com.au) and Ramelius Resources Limited (http://www.rameliusresources.com.au) are two listed companies at Australian Securities Exchange (ASX) ( www.asx.com.au).

 

Part A – Calculations (35 marks)

 

  1. Please access:
  2. Doray Minerals Limited’s Annual Report 2016, and
  3. Ramelius Resources Limited’s Annual Report 2016

 

Required:

 

  • Prepare a horizontal analysis of the consolidated income statements and consolidate balance sheets of both companies for the year ended 30 June 2016 (4 marks)
  • Prepare a vertical analysis of the consolidated income statements and consolidated balance sheets of both companies for the year ended 30 June 2016 (4 marks)

 

  • Calculate the following ratios for both companies using their income statements, balance sheets and statements of cash flows for the year ended 30 June 2016.

 

  1. Profitability ratios (5 ratios) (7.5 marks)
  2. Asset efficiency ratios (5 ratios) (7.5 marks)
  3. Liquidity ratios (3 ratios) (4.5 marks)
  4. Capital structure ratios (5 ratios) (7.5 marks)

 

Part B – Financial analysis and interpretation for decision making (65 marks)

 

Required: 

 

  1. Based on your calculations in Part A:
    1. Evaluate the profitability of both companies. Do you think each company is generating healthy returns? (10 marks)
    2. Evaluate the asset efficiency ratios of both companies. Which company is more efficient in managing its assets/resources? (10 marks)
    3. Appraise the liquidity ratios of both companies. Can both companies meet their short-term debts and stay in operations in the short term? (5 marks)
    4. Critically discuss the capital structure ratios of both companies. Can these companies successfully pay off their long-term debts and stay in operations in the long-term, i.e. their long-term financial stability? (10 marks)

 

  1. Assume you are a financial analyst in an investment company which intends to invest in either Doray Minerals Limited or Ramelius Resources Limited. Based on your analysis and interpretation of their financial statements, make your overall recommendation to invest in one of the companies.

(10 marks)

 

  1. Discuss three main limitations of financial ratio analysis. Discuss any two non-financial aspects of these companies that you may also take into account to come up with more sustainable and comprehensive investment decisions.

(10 marks)

 

 

 

 

  1. The report format and presentation:

 

  1. Executive Summary, and Introduction
  2. Conclusion
  3. Quality of presentation – Title page, tables of contents, headings, grammar, style and professionalism, clarity and logical flow, engagement of research, appendix and references

 

 (4+3+3 = 10 marks)

The Organisation of your Report

The ‘Business Report’ should be no longer than 1500 words and contain the following sections:

  1. A cover page;
  2. Executive summary of the report (or synopsis)
  3. Table of contents
  4. Introduction
  5. Financial ratio analysis and interpretation
  6. Limitations of financial ratio analysis and non-financial information of an entity
  7. Conclusion
  8. Reference List (Please include minimum 5 references)
  9. Appendix

 

Textbook Resources

Birt J, Chalmers K, Maloney S, Brooks A & Oliver J 2016, Accounting: Business Reporting for Decision Making, 6th Edn, Wiley, Milton, Queensland.

  1. Please refer to Chapter 8:
  2. 322-326 for Horizontal Analysis
  3. 328-329 for Vertical Analysis
  4. 330-353 & Appendix 8 A, pp. 380-381 for Ratio Analysis

Part A is NOT included in the word count and it should be attached as an appendix to the report.

Penalties apply for violating the word limit (10% deduction per 250 words over limit).

The presentation of your assignment is extremely important. The assignment must be carefully typed and professionally presented. . Marks will be deducted for poor presentation.

 

 

 

 

Online Submission, Academic Integrity and Extensions  

The assignment must be submitted by the due date: Tuesday, 2 May 2017 at 2:00pm. Submission must be online via Gradebook. Please make sure that you provide a reference each time you use ideas from a source and that the Turnitin report indicates considerable originality. Please plan ahead so that you can complete all sections of this task in time. You are strongly encouraged/advised to complete four lessons of the Academic Integrity Values, Skills, Actions Module available on the Course Learnonline Website before submitting your assignment.

Extensions for assignment will only be granted if a medical certificate, email or letter from employer or some other appropriate third party evidence is supplied to support the application. These must be received at least 24 hours prior to the due date of the assignments. Any request for an extension in the last 48 hours prior to the due time of an assignment must be accompanied by a draft of the assignment answer to demonstrate that the extension is not due to poor time management but has been working diligently on the assignment and been caught out by health, work or personal issues in the last couple of days. Due to tight schedule for marking this Assignment, applying for an extension is not recommended as this will delay the process and will ultimately delay the release of final marks.

 

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