Financial report

Description GENERAL Students are encouraged to commence this assignment as soon as practicable. It should be noted that some requirements, for instance, analysis of financial statements using appropriate ratios, may not be able to be completed until analysis and interpretation of financial statements has been covered in lectures. REQUIREMENTS: Based on your analysis of relevant information relating to Super Retail Group, you are required to prepare a structured report (see recommended structure detailed below) with a focus on the profitability, operating efficiency, liquidity, gearing and cash flows of the company. The profitability, efficiency, liquidity and gearing of the company should be analysed using the required ratios. Firms are accountable for generating profit with the assets employed. In addition, the firm must pay its debts as and when they fall due. An analysis of the Statement of Cash Flows is also required. Use the data from the financial statements in the annual report to calculate the ratios. Your report should cover a 3-year period for the years ending June 30 2016 to 2018, and should be sufficiently broad in scope to demonstrate your understanding of findings following the analysis. See links to Annual Reports below: 2018: http://media.supercheapauto.com.au/corp/files/documents/Appendix%204E%20&%202018.p df 2017: http://media.supercheapauto.com.au/corp/files/documents/Super%20Retaabb2918d.pdf 2016: http://media.supercheapauto.com.au/corp/files/documents/SRG_AnnualReport20.pdf 2015: http://media.supercheapauto.com.au/corp/files/documents/SRG_AnnualReport_L.pdf Submission considerations:  Word limit 2,000 words (excluding tables, graphs and appendices, title page, executive summary and bibliography).  All references should be appropriately acknowledged. . Other types of useful information may be available from the following sources; o DatAnalysis Premium – A Database accessible through Swinburne Library, useful for ASX Announcements, company history, annual reports, directors and management etc o Industry context: Australian Bureau of Statistics (ABS), IBIS (Swinburne University Library has access to some but not all ABS and IBIS information); 3 o Market: Australian Securities Exchange (ASX) www.asx.com.au; o Newspapers: Australian Financial Review, other newspapers and business publications (such as BRW) (eg through the Factiva database available through the Swinburne University Library); o Newsletters issued by stockbrokers and fund managers. *Note: Students are not expected to purchase industry or company specific reports from commercial suppliers. Only resources which are available through Swinburne University Library or on corporate or other websites (or other media such as Newspapers electronically available for example) and which are free of charge are expected to be used. Detailed requirements and mark allocation: Your report must cover the following: Company and industry background (2 marks) Briefly profile Super Retail Group – Its history, financial highlights, other relevant company details and summarise the nature and current state of the industry in which it operates. This section of work will help contextualise the report in terms of key company information and the industry (and wider) environment in which the firm operates.  History, should include: When and where it started operations, by who, major expansions and acquisitions from then to now; types of products/services it offers, significant business relationships; when listed on the stock exchange  Industry; includes identifying which industry it operates in, an understanding of the state of the industry and identifying major competitors. Manual calculation of specific ratios (5 marks) The minimum ratios to be manually calculated for each of the 3 years are:  Profitability o return on shareholders’ equity o return on total assets1 o net profit margin1  Efficiency o inventory turnover o settlement period for debtors/accounts receivable2 o settlement period for creditors/accounts payable3 o asset turnover  Liquidity o current ratio o cash flow from operations  Financial gearing 4 o gearing ratio4 Assumptions and other useful information for calculating ratios: Ratio formulas to be used as per week 6 and 7 of lectures Terminology in Super Retail Group’s Financial Statements 1. a Profit or Loss Statement use Consolidated Statement of Comprehensive Income b. Balance Sheet use Consolidated Balance Sheet c. Cash Flow Statements use Consolidated Statement of Cash Flows d. Accounts Receivable use Trade and other receivables e. Accounts Payable use Trade and other payables (Current Liabilities only) f. Interest Expense use Net Finance Cost g. Shareholder Equity use Total Equity 2 Assume that 10% of sales are credit sales. 3. Assume 100% of Inventory (stock) purchases are on credit. As the purchases figure is not available you will need to calculate it. (HINT: Use your COGS formula)