ACCT5021: Accounting for Managers- Financial Statement Analysis- Report Writing Assignment

Internal Code: MAS1753

Report Writing Assignment:

Task: Financial Statement Analysis Case Study on Woolworths Ltd (WOW). The following documents are available on Blackboard: 1. Woolworths Ltd (WOW) Annual Report 2014. 2. IBISWorld Woolworths Report, June 2015. Based on the information provided on Blackboard and your own individual research, answer the following questions on the “Balanced Scorecard Framework”and the retail industry: 1. Explain what is meant by the term “Balanced Scorecard Framework” 2. Discuss the main advantages and disadvantages of the “Balanced Scorecard Framework”. 3. Analyse Woolworths 2015 Annual Reports and suggest what performance indicators they would use to evaluate its performance using the “Balanced Scorecard Framework”. To consolidate your learning in ACCT5021 Accounting for Managers, you are to undertake a financial analysis of Santos Ltd (ASX Code: STO) and Woodside Petroleum Ltd (ASX Code: WPL), two Australian Securities Exchange (ASX) listed companies. Apart from examining each company’s annual reports, all other relevant disclosures made (e.g., quarterly and half yearly reports), ASX disclosures and other information relevant to the performance and position of each company and the industry report for Oil and Gas Extraction in Australia. It is expected that your research effort will extend beyond each company’s annual reports and Morningstar DatAnalysis. Accordingly, your team will need to identify and evaluate other sources of information such that a thorough and well-founded analysis of each company’s past performance and position adequately supports the provision of a well-argued investment recommendation (e.g., to buy, hold or sell shares in either company and the Australian industry sector to which they belong). Accordingly, your team may choose to access and interpret publicly available information on each company from sources such as the ASX, the Australian Accounting Standards Board; online databases such as ABI, IBIS World, ORBIS, ProQuest, Factiva, Morningstar DatAnalysis Analysis, etc; stock broker research reports; relevant websites such as http://www.bloomberg.com.au; business publications such as the Australian Financial Review and business oriented periodicals. The product of your research and collaborative effort is a report that is to be submitted to the senior management group of ABC Equities Ltd (ABC), a very large client firm who is currently undertaking a due diligence on both companies. The report must include the following: 1. Covering letter, table of contents and executive summary. 2. Introduction: including company profile and strategic overview. 3. Profitability and market based ratios - where relevant financial data is available, which company has performed better over the past five (5) years? Why? 4. Where appropriate, which company has better managed the working capital management relationship between inventories, accounts payable and accounts receivable? Why? Comment on the relevance of the three ratios of (a) days inventory, (b) days payable and (c) days receivable to understanding the working capital financial management practices of ASX listed companies operating primarily in the Australian Oil and Gas Extraction industry. 5. Comment on and compare the short-term liquidity (i.e., current and quick) positions of both companies. 6. Comment on and compare the long term debt/equity positions of both companies. 7. Identify and discuss the significance of the differences between the net profit after tax and operating cash flows of both companies in the 2013 - 2015 financial years. What are the accounting variables that are the most significant in explaining the difference between the cash versus accounting measures of each company’s operating performance for the 2013 - 2015 financial years? 8. Identify and discuss each company’s investing and financing activities during the 2013 - 2015 financial years. In particular, explain what might be the impact of the current global and domestic economic environment upon each company’s (a) decision to invest in new property, plant and equipment and (b) in the valuation of existing investments in property, plant and equipment and other significant tangible and intangible non-current assets? 9. Corporate responsibility practices and disclosures. 10. Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of each company. 11. Investment Recommendation - which company would you recommend that ABC Equities Ltd invest in? Why? 12. References and appendices (include all sources i.e. annual reports, databases etc).