Zip Co Ltd has announced plans to raise $400m via bonds (i.e. debt financing) to finance expansion plans(The Australian, 15 Apr 2021, page 16). Using knowledge acquired in this unit, you decide to investigate the financial statements of Zip Co for the year ending 30 June 2020. Using ratios covered in this unit and associated analysis, your aim is to analyse your choice of elements of liquidity, asset mix and solvency, and then use this analysis to draw a conclusion regarding the strength of the financial position of the company and whether this is strong enough to support the debt financing and future growth ambitions. Note: marks will be deducted if instructions for preparation, and submission, of report, are not followed. Part A (8 marks): 1. Overview (guideline approximately 5% of the report) Briefly identify the purpose of this report, the potential users of the report and outline the information required by the users. 2. Balance Sheet Analysis (guideline approximately 35% of report) Analyse the 2020 (and 2019 if needed) financial statements, and supporting notes from the Annual Report, for Zip Co Ltd and allocate the assets and liabilities from the balance sheet into current and non-current. Provide brief supporting justifications for your allocation. Part B (12 marks): 

1. Financial Statement Analysis (guideline approx. 55% of report) Using the 2020 (and 2019 if needed) Annual Reports of Zip Co Ltd (links available from ‘Additional Assignment Resources’), prepare an analysis of the most relevant set of ratios to achieve the purpose identified in Part A: Overview. A maximum of 6ratios only can be used (this does not include any common size or percentageanalysis of the financial statements if you wish to also use this). Justify (usingauthoritative sources) how your choice of ratios will achieve the purpose of the report. Clearly identify any assumptions made and justify conclusions reached. Include only a summary of the ratio values in the body of the report. Any detailed calculations should appear in Appendix 1. 2. Recommendation (guideline approximately 5% of report) Provide a summary of your conclusion regarding the ability of Zip Co to successfullyundertake future growth ambitions.

Answer rating: 100% (QA)

1 Overview The purpose of this report is to analyse the fina... View the full answer