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Microsoft Word - Assessment 2 - Final Department of Business Assessment item 2 Value: 30% Due Date: 13-Oct-2019 Return Date: 27-Oct-2019 Length: Variable Submission method options: Background Shaver Shop is a company who has had an eventful few years during the last few years of operations. Requirements Based on your analysis of relevant information relating to Shaver Shop Group Limited, you are required to prepare a business on the profitability, operating efficiency, liquidity, gearing of the company. The profitability and efficiency of the company should be analysed using the required ratios. Firms are accountab for generating profit with the assets employed. In addition, the firm must pay its debts as and when they fall due, therefore you are required to assess the liquidity and gearing of the business using the appropriate ratios. Use the data from the financ calculate the ratios. Your report should cover a 2 sufficiently broad in scope to demonstrate your understanding of findings following the analysis. Higher Education Department of Business Management and Finance Business Report Preston Campus 77-91 St Georges Road Preston, Victoria 3072 AUSTRALIA NMIT CRICOS Code: 00724G 2019 2019 Submission method options: Alternative submission method Shaver Shop is a company who has had an eventful few years during the last few years of Based on your analysis of relevant information relating to Shaver Shop Group Limited, you are business report (see recommended structure detailed below) with a focus on the profitability, operating efficiency, liquidity, gearing of the company. The profitability and efficiency of the company should be analysed using the required ratios. Firms are accountab for generating profit with the assets employed. In addition, the firm must pay its debts as and when they fall due, therefore you are required to assess the liquidity and gearing of the business using the appropriate ratios. Use the data from the financial statements in the annual reports to Your report should cover a 2-year period for the years ending July2017 to 2018, and should be sufficiently broad in scope to demonstrate your understanding of findings following the analysis. and Finance Shaver Shop is a company who has had an eventful few years during the last few years of Based on your analysis of relevant information relating to Shaver Shop Group Limited, you are report (see recommended structure detailed below) with a focus on the profitability, operating efficiency, liquidity, gearing of the company. The profitability and efficiency 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, therefore you are required to assess the liquidity and gearing of the business ial statements in the annual reports to year period for the years ending July2017 to 2018, and should be sufficiently broad in scope to demonstrate your understanding of findings following the analysis. Created by Joseph Aponso Page 2 of 8 pages The links to the Annual Reports are below: 2018: http://investors.shavershop.com.au/FormBuilder/_Resource/_module/wFMSjMp88 0CoIT0SQz1Qsw/docs/reports/annual_report_2018.pdf 2017: http://investors.shavershop.com.au/FormBuilder/_Resource/_module/wFMSjMp88 0CoIT0SQz1Qsw/docs/reports/2017_annual_report.pdf Submission considerations: Word limit 1,800 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; Industry context: Australian Bureau of Statistics (ABS), Market: Australian Securities Exchange (ASX) www.asx.com.au; Newspapers: Australian Financial Review, other newspapers and business publications *Note: Students are not expected to purchase industry or company specific reports from commercial suppliers. Only resources which are available through 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 (5 marks) Brief profile Shaver Shop GroupLimited – Its history, financial highlights, and 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. Created by Joseph Aponso Page 3 of 8 pages Manual calculation and Analysis of specific ratios (15 marks). Provide 2 decimal points for your ratios The minimum ratios to be manually calculated for each of the 2 years are: Profitability o return on shareholders’ equity o return on total assets o net profit margin Efficiency o inventory turnover o settlement period for debtors/accounts receivable o settlement period for creditors/accounts payable o asset turnover Liquidity o current ratio o cash flow from operations Financial gearing o gearing ratio Terminology in Shaver Shop Group Limited Group’s Financial Statements 1 a. Profit or Loss Statement use Consolidated Statement of Comprehensive Income b. Balance Sheet use Consolidated Statement of Financial Position c. Accounts Receivable use Trade and other receivables d. Accounts Payable use Trade and other payables e. Interest Expense use Finance Costs f. Cost of goods sold use Cost of goods sold 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) 4. To calculate the gearing ratio you should use the following formula: Gearing ratio = Non − current liabilities (Total Equity + Non − current liabilities) ∗ 100 Created by Joseph Aponso Page 4 of 8 pages Analysis and interpretation of financial performance, position, and market standing Based on the financial reports and other information, prepare an analysis that covers the past two financial years ending July 2017 and 2018, concentrating on the following aspects and including a consideration of segment information and position in relation to its industry: Profitability (5 marks) Efficiency (5 marks) Liquidity (2.5 marks) Gearing (2.5 marks) (Total = 15 marks) NB. Analysis does not mean just restating the ratios or their formulas you need to discuss the implications. Assessment of other relevant information (5 marks) An assessment of other, typically non-financial, information relevant to the assessment of the company’s current state of financial affairs (for instance; global events, industry developments and issues, structural changes to the company such as changes in board composition, mergers or acquisitions, economic factors and any other relevant issues which may potentially impact on the operations of the company). While your report will focus on the financial performance of Shaver Shop Limited Group consider also its environmental and social performance. Summary, conclusion & Executive Summary (5 marks) Based on your analysis and findings summariseShaver Shop LimitedGroup’s current financial situation and consider its potential outlook and make any recommendations Created by Joseph Aponso Page 5 of 8 pages Suggested Report Structure 1. Title Page 2. Executive Summary 3. Introduction and Purpose of Analysis 4. Company and Industry Background o Company o Industry 5. Analysis of Financial Report Data o Profitability o Efficiency of Operations o Liquidity o Gearing