115020 Accounting Fundamentals Assessment

Learning Outcomes

1. Describe the fundamental accounting concepts that are applied in the preparation of financial statements.
2. Explain the main types of business structures, a sole trader, a partnership and a company and describe the advantages and disadvantages of each type of structure.
3. Undertake basic accounting activities in a competent manner.
4. Perform analytical evaluations using data such as basic financial statement analysis, break-even analyses, future value of money, investment evaluations, and payback periods.

Task Description

Obtain a copy of the two most recent Annual Reports of EITHER The Warehouse Group OR Hallenstein Glasson Holdings Limited.Complete a  financial statement analysis for your chosen company and prepare an analysis based on the questions below. (Alternatively,your teacher may provide you any two public listed companies’Annual Reports in PDF format,downloadable from Stream).

The Warehouse Group Limited WHS–NZX,New Zealand‘s Exchange Hallenstein Glasson Holdings Limited HLG-NZX,New Zealand’s Exchange

Part 1 (10%Weighting)

For your chosen company,calculate the following ratios for the 2 most recent years,following these steps:

1. List relevant data as a balance sheet,separating current and non-current assets and liabilities.
2. Show your ratios in a table with the formula used for calculations (NOTE:For some companies,it may not be possible to complete all of these calculations,but a minimum of 5 ratios from the following list should be provided)

The possible ratios to be calculated are: Liquidity Ratios:

• Current ratio
• Quick ratio

Profitability Ratios:

• Gross profit margin
• Net profit margin
• Return on assets
• Return on ordinary shareholders’equity

Solvency Ratio:

• Debt to equity

Part 2 (30%weighting)

Use the above ratios to carry out a ratio analysis of the company in the following areas and make a recommendation of whether the company would be a good investment based on your analysis.This part of the assessment should be written in the form of an 800 word report consisting of the following sections (NOTE:Depending on the ratios which were calculated in Part 1, your report may have fewer sections than this):

• Introduction
• Liquidity Analysis
• Profitability Analysis
• Long-term solvency Analysis
• Final Recommendations-This should be a summary of your comments on the above analyses and a recommendation of whether to invest in this company or not.

Learning Outcomes for this Task

LO4 Perform. analytical evaluations using data such as basic financial statement analysis,break-even analyses,future value of money, investment evaluations,and payback periods.

Formatting

All assignments should be word processed,have a title and page numbers. Font size should be 12,with 1.5 line spacing.Write your name,student number,and teacher’s name clearly on each page.Your submission must be in .doc format (i.e.not a PDF).

Draft