Assignment Description: You are an investment advisor for a large investment advising firm in Australia. A...

 

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Assignment Description: You are an investment advisor for a large investment advising firm in Australia. A client wants to invest a substantial amount of money in either Woolworths Group Ltd or a new competitor a listed company Australian Fresh Ltd which is same Industry as Woolworths Group Ltd. They ask you to appraise each company using key data and provide them with a recommendation. You may consider both financial and non-financial information in making this decision. Write your answers in report format. Stage 1- Preparation and Analysis of Financial statements (Using excel). In your stage one you are required to prepare and analyse the financial statements of Australian Fresh Ltd and Woolworths Group Ltd. Australian Fresh Ltd has provided financial information for year ending June 2020. Items Cash Trade receivables Assets held for sale Land Investment in shares Delivery trucks Sales revenue from goods and services Cost of Sales Other Revenue Borrowings Marketing expense Admin expense Repair and maintenance expense Trade and other payables Loan from ASX Bank payable on demand Other short-term financial liabilities wages payable Provisions Secured debts (maturity greater than five years) Share Capital Reserve Interest expense Inventory Staff wages Insurance expense Income tax expense Amount ($Million) Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 2020 685 795 17000 7950 6000 ***** 62600 www. 34650 270 8350 9595 3990 5930 2350 7750 2275 3630 60 1080 5945 ?? 1570 650 4380 7810 1235 680 2 Additional Information: . Depreciation for delivery trucks has not been recorded for year ended 30th June 2020. These trucks were purchased on 1st October 2019 to manage the high demand. Australian Fresh decided to use straight line method. These delivery trucks have a scrap value 1000(SM) and useful life of 5 years. *Land has unlimited useful life. Assets held for sale are highly probable and available for immediate sale within six months. Company issued 1270 (Millions) (12 70 000 000) ordinary shares to its shareholders in 2020. Australian Fresh Ltd paid out 40% of the profit as a dividend to its shareholders in 2020. Required: 1. Prepare a classified income statement for Australian Fresh Ltd for the year ended 30th June 2020. . . In Income statement include additional profit measures e.g. Gross profit, EBITDA, EBIT. Also, Market performance measures e.g. Earnings per share, dividend for 2020 and dividend per share. (show your working out for each in your working notes.) 2. Prepare a classified balance sheet as at 30th June 2020 for Australian Fresh Ltd. Australian Fresh Ltd has provided some of the financial information for year ending June 2019 and 2018 respectively which may help you to answer your question 3 (a). Information from Australian Fresh LTD for 2019 & 2018 2019($M) 2018($M) Trade receivables Total current assets (Including trade receivables) Total Non-current assets Total assets Total current liabilities Total Non-current liabilities Total liabilities www Net assets (A-L) Share capital Reserve Profits Total equity Sales Revenue Earnings before interest and income tax expense (EBIT) Market performance Earnings per share (cents per share) Dividend per share (cents per share) Figures after tax and net interest 1,150 5,200 17,100 22,300 8,950 2,970 11.030 11,920 10,380 6,850 850 2,680 10,380 55,500 2,350 980 5,450 16.500 Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 21,950 9,130 4,770 13,900 2050 8,050 6560 6,560 950 950 1,540 9,050 53,500 2,430 Cents Cents 129.4cents 115.6cents. 0.95cents 0.85cents 3 3 (a). Calculate following ratios for Australian Fresh Ltd by using information provided in financial statements above in this document. Write your answer in two decimal places. Ratios Profitability Analysis Profit Margin Return on Assets (ROA) Return on Equity Capital Structure Analysis Debt ratio Market performance Analysis Earnings per share Dividend per share Liquidity Analysis Debtors Days 2020 Liquidity Answers for ratio to be given in two decimal places only. And now access link https://www.woolworthsgroup.com.au/page/investors/ provided in Canvas or alternatively using the below pdf link and pay attention to the information provided in the financial statements as you will find a lot of useful information in them that may help with following questions. 3 (b). Calculate following ratios for Woolworths Group by locating the financial statements. Write your answer in two decimal places. Ratios Profitability Analysis Profit Margin Return on Assets (ROA) Return on Equity Capital Structure Analysis Debt ratio 2019 Financial statements can also be access from here. Annual report\Woolworth 2020-annual- report.pdf and Annual report\Woolworth 2019-annual-report.pdf Market performance Analysis Earnings per share Dividend per share Liquidity Analysis Debtors Days 2020 2019 Liquidity * For 2019 figures use restated amount from Woolworths 2020 annual report for calculation and for 2018 figures use restated amount from 2019 report. * Answers for ratios only to be given in two decimal places. Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 4 Stage 2 Analysis and recommendation Report & Micro-credential. (Using word/ pdf file) The structure of the report requires: • Title page. • Executive summary • Table of contents • Introduction Body of work (description of business, sustainability/CSR, ratio analysis, Micro- credential) • Conclusion References As part of your report, answer the following requirements. 1. Use the information from your research on to provide a brief introduction and description of Woolworths group. In your description include the following; a. The type of organisation it is (for-profit/not-for-profit; merchandiser/manufacturer; partnership/company etc.) b. An outline of your business's brief background & its main products/services and activities. 2. Identify and explain Woolworths group's approach to corporate social responsibility and sustainability. In your answer include the following: a. Within your discussion you must explain the meaning of 'corporate social responsibility' and 'sustainability'. b. What is role of accounting and/or accountants in sustainability. Discuss any three points from knowledge of theory to support your answer. C. Undertake research to focus on Woolworth's corporate social responsibility and/or sustainability. Identify and comment (must include brief description) on their three pillars of 2020 Sustainability Strategy. (Max 150 words) d. Comment on Woolworth's environment sustainable core element programs which shows their progress of reducing overall impact on environment and supporting community. (In your answer you must Identify and include any two commitments and their progress (next step) from each pillar of 2020 sustainability strategy- Our 2020 commitments and progress and comment on them) (Max 300-400 words) e. Comment on how important you believe environmental and social performance of a company is when potential investor analyse a company? Explain how environmental and social factors are likely to create value for /benefit those stakeholders and community. Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 5 Assignment Description: You are an investment advisor for a large investment advising firm in Australia. A client wants to invest a substantial amount of money in either Woolworths Group Ltd or a new competitor a listed company Australian Fresh Ltd which is same Industry as Woolworths Group Ltd. They ask you to appraise each company using key data and provide them with a recommendation. You may consider both financial and non-financial information in making this decision. Write your answers in report format. Stage 1- Preparation and Analysis of Financial statements (Using excel). In your stage one you are required to prepare and analyse the financial statements of Australian Fresh Ltd and Woolworths Group Ltd. Australian Fresh Ltd has provided financial information for year ending June 2020. Items Cash Trade receivables Assets held for sale Land Investment in shares Delivery trucks Sales revenue from goods and services Cost of Sales Other Revenue Borrowings Marketing expense Admin expense Repair and maintenance expense Trade and other payables Loan from ASX Bank payable on demand Other short-term financial liabilities wages payable Provisions Secured debts (maturity greater than five years) Share Capital Reserve Interest expense Inventory Staff wages Insurance expense Income tax expense Amount ($Million) Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 2020 685 795 17000 7950 6000 ***** 62600 www. 34650 270 8350 9595 3990 5930 2350 7750 2275 3630 60 1080 5945 ?? 1570 650 4380 7810 1235 680 2 Additional Information: . Depreciation for delivery trucks has not been recorded for year ended 30th June 2020. These trucks were purchased on 1st October 2019 to manage the high demand. Australian Fresh decided to use straight line method. These delivery trucks have a scrap value 1000(SM) and useful life of 5 years. *Land has unlimited useful life. Assets held for sale are highly probable and available for immediate sale within six months. Company issued 1270 (Millions) (12 70 000 000) ordinary shares to its shareholders in 2020. Australian Fresh Ltd paid out 40% of the profit as a dividend to its shareholders in 2020. Required: 1. Prepare a classified income statement for Australian Fresh Ltd for the year ended 30th June 2020. . . In Income statement include additional profit measures e.g. Gross profit, EBITDA, EBIT. Also, Market performance measures e.g. Earnings per share, dividend for 2020 and dividend per share. (show your working out for each in your working notes.) 2. Prepare a classified balance sheet as at 30th June 2020 for Australian Fresh Ltd. Australian Fresh Ltd has provided some of the financial information for year ending June 2019 and 2018 respectively which may help you to answer your question 3 (a). Information from Australian Fresh LTD for 2019 & 2018 2019($M) 2018($M) Trade receivables Total current assets (Including trade receivables) Total Non-current assets Total assets Total current liabilities Total Non-current liabilities Total liabilities www Net assets (A-L) Share capital Reserve Profits Total equity Sales Revenue Earnings before interest and income tax expense (EBIT) Market performance Earnings per share (cents per share) Dividend per share (cents per share) Figures after tax and net interest 1,150 5,200 17,100 22,300 8,950 2,970 11.030 11,920 10,380 6,850 850 2,680 10,380 55,500 2,350 980 5,450 16.500 Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 21,950 9,130 4,770 13,900 2050 8,050 6560 6,560 950 950 1,540 9,050 53,500 2,430 Cents Cents 129.4cents 115.6cents. 0.95cents 0.85cents 3 3 (a). Calculate following ratios for Australian Fresh Ltd by using information provided in financial statements above in this document. Write your answer in two decimal places. Ratios Profitability Analysis Profit Margin Return on Assets (ROA) Return on Equity Capital Structure Analysis Debt ratio Market performance Analysis Earnings per share Dividend per share Liquidity Analysis Debtors Days 2020 Liquidity Answers for ratio to be given in two decimal places only. And now access link https://www.woolworthsgroup.com.au/page/investors/ provided in Canvas or alternatively using the below pdf link and pay attention to the information provided in the financial statements as you will find a lot of useful information in them that may help with following questions. 3 (b). Calculate following ratios for Woolworths Group by locating the financial statements. Write your answer in two decimal places. Ratios Profitability Analysis Profit Margin Return on Assets (ROA) Return on Equity Capital Structure Analysis Debt ratio 2019 Financial statements can also be access from here. Annual report\Woolworth 2020-annual- report.pdf and Annual report\Woolworth 2019-annual-report.pdf Market performance Analysis Earnings per share Dividend per share Liquidity Analysis Debtors Days 2020 2019 Liquidity * For 2019 figures use restated amount from Woolworths 2020 annual report for calculation and for 2018 figures use restated amount from 2019 report. * Answers for ratios only to be given in two decimal places. Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 4 Stage 2 Analysis and recommendation Report & Micro-credential. (Using word/ pdf file) The structure of the report requires: • Title page. • Executive summary • Table of contents • Introduction Body of work (description of business, sustainability/CSR, ratio analysis, Micro- credential) • Conclusion References As part of your report, answer the following requirements. 1. Use the information from your research on to provide a brief introduction and description of Woolworths group. In your description include the following; a. The type of organisation it is (for-profit/not-for-profit; merchandiser/manufacturer; partnership/company etc.) b. An outline of your business's brief background & its main products/services and activities. 2. Identify and explain Woolworths group's approach to corporate social responsibility and sustainability. In your answer include the following: a. Within your discussion you must explain the meaning of 'corporate social responsibility' and 'sustainability'. b. What is role of accounting and/or accountants in sustainability. Discuss any three points from knowledge of theory to support your answer. C. Undertake research to focus on Woolworth's corporate social responsibility and/or sustainability. Identify and comment (must include brief description) on their three pillars of 2020 Sustainability Strategy. (Max 150 words) d. Comment on Woolworth's environment sustainable core element programs which shows their progress of reducing overall impact on environment and supporting community. (In your answer you must Identify and include any two commitments and their progress (next step) from each pillar of 2020 sustainability strategy- Our 2020 commitments and progress and comment on them) (Max 300-400 words) e. Comment on how important you believe environmental and social performance of a company is when potential investor analyse a company? Explain how environmental and social factors are likely to create value for /benefit those stakeholders and community. Accounting in Organisation and society Melbourne semester 2 2020, NB, V1. 5

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Australian Fresh Ltd Income Statement For the year ending June 2020 in Millions Particulars Amount Amount Revenue 62600 Cost of Goods sold 34650 Gross ... View the full answer