Annual Reports with Calculations

Annual Reports with Calculations

Project description
Analyse the financial statements of a public company

Select a company listed on the Australian Stock Exchange and obtain its last two published annual reports including that for 2013 (note that this will provide financial data for a three year period).

Analyse the financial statements in these annual reports, using the principal ratios that are discussed in your textbook. You do not need to calculate all of the ratios
listed. Part of the task is to select relevant ratios. Some ratios may be discussed in the context of explaining trends that are identified by other ratios.

Note that there are very few marks for calculating ratios! The majority of marks are awarded for the interpretation of the ratios—what are they telling you? Avoid wasting words on describing the ratios. For example, ‘The decline of the current ratio from 2.2 to 1.5 (Appendix A item 5) can be explained by reference to … This suggests that tighter management of … is required’ will earn far more marks
THAN this one ‘The current ratio is calculated by dividing current assets by current liabilities. It has gone from 2.2 to 1.5. Another solvency ratio is …’

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