HI5001 Accounting for Business Decisions (T2, 2015)
Group Assignment (Total points 100 30% of Final Mark)
The assignment has two parts namely Part A (65 points) & B (35 points). Part A will require you to undertake research choosing a company that is listed in the Australian Stock Exchange (ASX).
As a rule, Public Companies engaged in Banking & Financing like ANZ and Westpac, Retailing like Wesfarmers and David Jones, Airlines like Qantas and Jetstar will not be allowed. Part B will involve a case study.
The assignment aims to develop an understanding of financial statements structure and their use in decision-making. The task is to choose a publicly listed company from the Australian Stock Exchange (ASX) which should be approved by your lecturer (as not to have the same companies from other groups) and analyse the financial statements.
This group project itself includes several assignments, each of which comprises a part of the students’ task. However, it is well encouraged to include any additional information that students may think will be useful in conducting financial statements analysis of the selected company. The maximum number of members is 5. This is non-negotiable.
General Rules and Requirements:
The report should be prepared by a group with a maximum of three members. Reports must be confined to 2,500 words (+/- 5%). For Part A, a title page, table of contents page (based on your report headings), introduction, conclusion and references should be included. Font type should be Arial (size 11), paragraph spacing should be 1.5. For part B, follow the instructions in the assigned case or problem.
Note: Any additional material from external sources that you “copy and paste” into your report is NOT included in the word limit. Also, ensure it is appropriately referenced.
PART A:
Part A1 (10 points)
Provide an executive summary of your company’s background relating to business structure, operations, services and all other business activities that are conducted, etc.
Part A2 (20 points)
Use the annual report for the year ending 30 June 2014. Your group will need to review the major sections of this report in order to familiarize yourselves with the content of each of the financial statements and appropriate notes to the financial statements.
Review the balance sheet of the company and indicate the amount of the following: a) Total current assets
b) Total non-current assets
c) Total current liabilities
d) Total non-current liabilities
e) Total stockholder’s equity
Compare the above figures with the previous year and compute the percentage increase or decrease and comment on the comparative financial condition of the company.
Part A3 (15 points)
Review the income statement and indicate the following:
a) Total (operating) revenues
b) Cost of Goods Sold (if relevant)
c) Total expenses (before income taxes)
d) Any non-operating (or extraordinary) gains and losses
e) Earnings per common share
Compare the above figures with the previous year and compute the percentage increase or decrease and comment on the comparative financial operation of the company.
Part A4 (10 points)
Review the statement of cash flows for the most recent year and indicate the following:
a) net cash inflow (outflow) from operating activities
b) net cash inflow (outflow) from financing activities
c) net cash inflow (outflow) from investing activities
d) net increase (decrease) in cash during the year
Analyse the Cash Flow Statements for the last 2 years and comment on the cash position of the company.
Part A5 (10 points)
Review the stockholders' equity section in your chosen company's most recent year-end balance sheet and compare that with the previous year-end balance sheet. Compare percentage increase or decrease.
List the stockholders' equity account balances and number of outstanding shares from these two balance sheets and compute the increase or decrease for each during this past year.
Part B Case Study (5 points ea. 35 points)
Recently you received the following offers from the organizers of Melbourne Tennis Open 2015:
Now you can buy premium tickets to the coming Melbourne Tennis Open 2015 with signatures of your choice of popular tennis players like Rafael Nadal, Roger Federer to name a few.
However, there are only 3,000 tickets that have these collectible features.
• Retail price: $300 each
• Tennis club members: $280 each
• To order, complete the online order form @ www.MTO2015.com.au.
• Allow 5 days for delivery
Required:
1. Describe the alternatives the organisers have in relation to recognizing revenues. Which would you recommend and why?
2. Would your answer differ if you included in the sale of the tickets that if the customers are not happy the tickets may be returned within one month?
3. Let us assume that the organisers contracted a selling agent that takes care of all selling and marketing responsibilities, gets 10% as commission. The policy states that no return no exchange. When should the organisers recognize revenue?
4. With regards to the authenticity of the signatures, do you think the accounting profession have the skills to provide the services to authenticate? Discuss and show examples.
5. Discuss the importance of Cost of Goods Sold(COGS) in this case. How is it applied?
6. Let us say that the signatories will get a fixed fee for the effort, when would the organisers recognize the expense?
7. Assume that the signatories will get a 5% commission on the sales of their signed tickets. When would the organisers recognize the cost
Due Date: Friday 25th September, 2015 (5:00 p.m.). Don’t forget to upload onto Safeassign, one per group (do not upload more than one copy).