Urgenthomework logo
UrgentHomeWork
Live chat

Loading..

Acc101 Accounting For Decision Making Assessment Answers

We have been examining the financial accounts of JB Hi-Fi. You are now requested to obtain the JB Hi-FiStatements.
Required: Please include in your individualanalysis:
An explanation of your understanding of the purpose of financial accounting statements,
An evaluation of the accounting practices used to produce the JB Hi-Fi annual report,
An analysis of the annual report using financial ratio tools, and 
Your opinion on the future for JB Hi-Fi.

Answer:

Introduction:

This report has been prepared to analyze the financial strength, stability, performance and profitability of JB HI FI limited. In this report, financial tools have been taken into the context to perform this study. This report depicts that how many changes have taken place into the performance of the company from the last 5 years. For this study, financial figures and annual report of the company has been taken into the consideration.

Company Overview:

JB HI FI limited operates its activities and the business in the industry of the music since 1974. Mainly, this organization was just a store in beginning in 1974 which has been opened by John Barbuto in East Keilor, Victoria. Further, in the year of 2000, the organization has been obtained by the equity banking and after that it has been recorded in ASX (Australian stock exchange) and right now this is considered as top companies of the Australian market and music industry (Home, 2017). This company offers numerous products to its clients such as DVD music, recorded music, games, DVD movies and TV shows. Currently because of many changes into the Australian market, performance, stability and profitability of the company is getting affected. Annual reports of the company have been studied to analyze the company deeply. For this study, financial figures and annual report of the company has been taken into the consideration.

Financial analysis of the company:

Financial analysis of a company is a study which evaluates the projects. Budgets, business and various financial related entities of a company are used to evaluate the suitability and performance of the company (Deegan, 2013). Mainly, the financial analysis is done to investigate and analyze the organization’s liquidity, solvency and stability position. In this report, ratio analysis has been taken into the context to analyze the performance of the JB HI FI Limited.

Ratio analysis is a process of financial analysis. This process is done to analyze a quick indication about the financial performance and position of a company. It takes the concern of various key financial figures. Ratios have been categorized into various forms to make a better decision. The study of ratio analysis of JB HI FI is as follows:

Profitability ratios:

Profitability ratios are a study to analyze the profit condition of the company. Basically profitability ratios are the financial metrics which is used to assess the ability of the business to generate expenses and other relevant cost during a particular time. In this report, return on assets, return on equity, asset turnover, financial leverage and earnings per share has been analyzed to identify the profitability position of the company (Elliott & Elliott, 2007).

2017

2016

2015

2014

2013

Profitability

      

Return on equity

Net profit/revenues

0.0305615

0.0384421

0.0375137

0.0367394

0.03507

Return on assets

Net profit/Equity

0.2014052

0.3753086

0.3994169

0.4338983

0.47737

Financial leverage

EBIT / EBIT - Interest

1.0428016

1.0184332

1.0307692

1.0494505

1.05952

Asset turnover

total assets / total sales *365

159.0876

91.665402

89.450986

90.097589

93.0154

Earnings per share

Net income - pref div / shares outstanding

0.3917995

3.1020408

2.4035088

2.2068966

1.84127

Through the reports, it has been analyzed that the position of the company has been bit lower from last year. Few changes have taken place and due to which the profits of the company has become lower from 2016 and due to which the financial performance of the company has been affected (Annual report, 2017).

Liquidity ratios:

Liquidity ratios are a study to analyze the liquid position of the company. Basically liquidity ratios are the financial metrics which is used to assess the ability of the business to meet the current obligation of the company during a particular time. In this report, return cash ratio, current ratio, quick ratio, inventory turnover ratio and asset turnover ratio has been analyzed to identify the liquidity position of the company (Corporate governance, 2017).

Liquidity

      

cash ratio

cash equivalents + cash / current liabilities

0.0823928

0.1163311

0.1289474

0.1221591

0.15158

Current ratio

Current assets/current liabilities

1.32

1.57

1.62

1.64

1.28

Quick Ratio

Current assets-Inventory/current liabilities

0.35

0.35

0.36

0.34

0.31

Receivable turnover

Receivables/ Total sales*365

29.31

36.02

33.03

30.13

27.71

Inventory turnover

Inventory / cost of goods sold *365

71.37

64.52

61.26

61.03

59.57

(Morningstar, 2017)

Through the reports, it has been analyzed that the position of the company in terms of liquidity has became better from last years. Few changes have taken place and due to which the company has adopt the strategy of maximum utilization of minimum resources. This depict that currently the obligation of the company and risk factor of the company is lower.

Solvency ratios:

Solvency ratios are a study to analyze the debt and equity position of the company. Basically solvency ratios are the financial metrics which is used to assess the ability of the business to maintain the optimal capital structure and manage the liabilities and assets in a better manner. In this report, cash coverage ratio, times interest earned and debt to equity has been analyzed to identify the solvency position of the company (Australian government, 2017).

Solvency

      
      

Times interest earned

EBIT / Interest expenses

24.363636

55.25

33.5

21.222222

17.8

Cash coverage ratio

EBIT + non cash expenses / interest expenses

269.00

222.00

202.00

192.00

179.00

Debt to Equity Ratio

Debt/ Equity

1.87

1.45

1.61

1.92

2.47

Through the reports, it has been analyzed that the position of the company in terms of liquidity has became better from last years. Few changes have taken place and due to which the company has adopt the strategy of maximum utilization of minimum resources. This depict that currently the obligation of the company and risk factor of the company is lower.

Market based ratios:

Market based ratios are a study to analyze the market position of the company. Basically market based ratios are the financial metrics which is used to assess the market factor of the company such as dividend, earnings, prices etc. In this report, dividend yield ratio and price earnings ratio has been analyzed to identify the market position of the company (Elliott & Elliott, 2007).

Market based ratios

   

Price / earnings ratio

Market value per share / earnings per share

60.90

 

Dividend yield ratio

dividend / current share price

4.99

 

Through the reports, it has been analyzed that the market position of the company in terms of market factor is bit better in current years (Annual report, 2017). Currently, this analysis depict that making investment into this company would be in the favour of the investors.

Through the study over the financial data, annual report of JB HI FI, it has been analyzed that it is a better option to make investment into the company to enhance the level of the opportunities for the company. Through this analysis, it has been found that the company is performing better in the market and the company would offer short term as well as long term, profits and returns to the investors. Thus it is suggested to the investors to invest into the company whether for the short term or for long term.

Conclusion:

This study depict that JB HI FI is one of the top companies of Australian market. Through this analysis and the study over the annual report and financial figures of the company, it ha scene analyzed that this would offer high return to the investors. The liquidity position, solvency position, profitability position and the market position of the company depict the positive outcome.

References:

Annual Report. (2013). JB HI FIltd. Retrieved from https://www.annualreports.com/HostedData/AnnualReportArchive/J/ASX_JBH_2013.pdf as on 22nd Oct 017

Annual Report. (2017). JB HI FIltd. Retrieved from

Australian government, (2017) Company tax rates. Retrieved from https://www.ato.gov.au/Rates/Company-tax/ as on 22nd Oct 017

Deegan, C. (2013). Financial accounting theory. McGraw-Hill Education Australia.

Elliott, B., & Elliott, J. (2007). Financial accounting and reporting. Pearson Education.

JB HI FI. (2017). Corporate shareholders. Retrieved from https://www.jbhifi.com.au/General/Corporate/Shareholder-Matters/Financial-Annual-Reports/ as on 22nd Oct 017

JB HI FI. (2017). About us. Retrieved from https://www.jbhifi.com.au/General/Corporate/Consumer-Matters/About-Us/ as on 22nd Oct 017

Morningstar. 2017. JB HI FI. Retrieved from https://financials.morningstar.com/cash-flow/cf.html?t=JBH&region=aus&culture=en-US as on 22nd Oct 2017


Buy Acc101 Accounting For Decision Making Assessment Answers Online

Talk to our expert to get the help with Acc101 Accounting For Decision Making Assessment Answers to complete your assessment on time and boost your grades now

The main aim/motive of the management assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignments. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks. The experts of the assignment help services at urgenthomework.com are so much skilled, capable, talented, and experienced in their field of programming homework help writing assignments, so, for this, they can effectively write the best economics assignment help services.

Get Online Support for Acc101 Accounting For Decision Making Assessment Answers Assignment Help Online

Copyright © 2009-2023 UrgentHomework.com, All right reserved.