Comparative analysis

Select a public limited company listed on the Australian Securities Exchange (ASX). Go to the
website of your company. Then go to the Investor Relations section of the website. This section
may be called, “Investors”, “Shareholder Information” or similar name.
In this section, go to your firm’s annual reports and save to your computer your firm’s latest
annual reports consecutively for last three years. For example, these may be dated 30 June 2016
or 31 March 2017. Do not use your firm’s interim financial statements or their concise financial
statements. Please read the financial statements (balance sheet, income statement, statement of
changes in owner’s equity, cash flow statement) very carefully. Also please read the relevant
footnotes of your firm’s financial statements carefully and include information from these
footnotes in your answer.
You need to do the following tasks:
CASH FLOWS STATEMENT
(i) From your firm’s financial statement, list each item of reported in the CASH FLOWS
STATEMENT and write your understanding of each item. Discuss any changes in each
item of CASH FLOWS STATEMENT for your firm over the past year articulating the
reasons for the change.
(ii) Provide a comparative analysis of your company’s three broad categories of cash flows
(operating activities, investing activities, financing activities) and make a comparative
evaluation for three years.
OTHER COMPREHENSIVE INCOME STATEMENT
(iii) What items have been reported in the other comprehensive income statement
(iv) Explain your understanding of each item reported in the other comprehensive income
statement
(v) Why these items have not been reported in Income Statement/Profit and Loss Statement
ACCOUNTING FOR CROPORATE INCOME TAX
(vi)What is your firm’s tax expense in its latest financial statements?
(vii) Is this figure the same as the company tax rate times your firm’s accounting
income? Explain why this is, or is not, the case for your firm.
(viii) Comment on deferred tax assets/liabilities that is reported in the balance sheet
articulating the possible reasons why they have been recorded.
(ix)Is there any current tax assets or income tax payable recorded by your company? Why
is the income tax payable not the same as income tax expense?
(x) Is the income tax expense shown in the income statement same as the income tax paid
shown in the cash flow statement? If not why is the difference?
(xi)What do you find interesting, confusing, surprising or difficult to understand about the
treatment of tax in your firm’s financial statements? What new insights, if any, have
you gained about how companies account for income tax as a result of examining
your firm’s tax expense in its accounts?

 

 

 

Sample Solution

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