HI5020 Corporate Accounting Assessment item 2 — Assignment Due date: 11.59pm Friday Week 10...

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HI5020 Corporate Accounting Assessment item 2 — Assignment Due date: 11.59pm Friday Week 10 Weighting: 30 % Total Marks: 30 Instructions: 1. This assignment needs to be submitted using safe-assign. No hardcopy or email attachment will be accepted. 2. It is the responsibility of the student who is submitting the work, to ensure that the work is her/his own work. Plagiarism will be heavily penalised 3. Assignment should be of 3,000 words. Please use “word count” and include in report. Format of the Report  Your submitted assignment at least should have the following details: a. Assignment Co Assessment task Select two public limited companies listed on the Australian Securities Exchange (ASX) that are in the same industry. Go to the website of your selected companies. 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 companies’ annual reports and save to your computer your firms’ latest annual reports consecutively for last three years. Do not use your companies’ 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 companies’ financial statements carefully and include information from these footnotes in your answer. You need to do the following tasks: OWNERS EQUITY (5 Marks) (i) From your companies’ financial statements, list each item of equity and write your understanding of each item. Discuss any changes in each item of equity for your firms over the past year articulating the reasons for the change. (ii) Provide a comparative analysis of the debt and equity position of the two firms that you have selected. CASH FLOWS STATEMENT (5 Marks) (iii) From the financial statement of your chosen companies, list each item 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 companies over the past years articulating the reasons for the change. (iv) Provide a comparative analysis of your companies’ three broad categories of cash flows (operating activities, investing activities, financing activities) and make a comparative evaluation for three years. (v) Also provide a comparative analysis of the two companies that you have selected explaining the insights that you can get from the comparative analysis. OTHER COMPREHENSIVE INCOME STATEMENT (5 Marks) (vi) What items have been reported in the other comprehensive income statement for each company? (vii) Why have these items not been reported in Income Statement/Profit and Loss Statements? (viii) Provide a comparative analysis of the items shown in the other comprehensive income statement section for the two companies. If these items were included in the income statement / profit and loss statements of each company, how would the profit attributable to shareholders of the company be affected? (ix) Should other comprehensive income be included in evaluating the performance of managers of the company? ACCOUNTING FOR CROPORATE INCOME TAX (15 Marks) (x) What are the tax expenses shown in the latest financial statements of the two companies that you have selected? (xi) Calculate the effective tax rate for both companies that you have selected. Effective tax rate is calculated as (income tax expense / earnings before tax). Which one of the companies has the higher effective tax rate? (xii) Comment on deferred tax assets/liabilities that is reported in the balance sheet articulating the possible reasons why they have been recorded. (xiii) Was there any increase or decrease in the deferred tax assets or in the deferred tax liability reported by each of your selected companies? (xiv) Please calculate the cash tax amount for both companies using the book tax amount, changes in the deferred tax assets and deferred tax liability (please do your own research for your better understanding of these concepts and the method of calculating the cash tax amount the book tax amount.) (xv) Calculate the cash tax rate for both companies. Which company has higher cash tax rate? (Please do your own research to familiarise yourself with how to calculate cash tax rate). (xvi) Why is the cash tax rate different from the book tax rate? Please remember some aspects of your companies’ treatment of tax can be a very complicated area, particularly for some companies. For a better understanding of the concepts included in the assignment that has not been introduced in the class, please do your own research.

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EXECUTIVE SUMMARY
This report is prepared to analyse the financial data of Bega cheese limited and Blackmores Limited. 
There are total 15 parts of the report. 
The companies which I have chosen are: 
· Blackmores Limited and 
· Bega Cheese Limited. 
Both the companies are involved in the business of food products. The companies are doing business on a vast scale and covers different parts of the world. 
If we have a look at the Begacheese performance, there is an increase of 17% in revenue. On the other hand, Blackmores revenues increased by 9% in 2018. 
Blackmores earning per share in 2018 has increased by 18.6%, and Begacheese Earning per share has reduced from 90.9 cents to 15.6 cents. There is teremendous decline in 2018.
So from peerformace point of view Begacheese is the company which can be considered by the investor. 
TABLE OF CONTENTS
i) Components of Owner’s Equity
ii) Comparative of Debt & Equity
iii) Components of cash flows
iv) Comparative analysis categories of cash flows
v) Comparative analysis of cash flows
vi) Components of Other comprehensive Income
vii) Reason that why other comprehensive income does not form part of Income Statement
viii) Comparative analysis of Other Comprehensive Income
ix) Whether Other Comprehensive Income should be considered for evaluating manager’s performance.
x) Income Tax Expense.
xi) Calculation of Effective tax rate
xii) Deferred Tax Assets / Liabilities
xiii) Change in Deferred Tax Assets / Liabilities
xiv) Calculation of Cash Tax Amount
xv) Calculation of Cash Tax Rate
xvi) Difference between Cash tax rate and Book rate
xvii) References
INTRODUCTION
BEGA CHEESE LIMITED
Bega Cheese is one of the top cheese manufacturing brand of Australia. The company is the key player in dairy industry supplying in both food service markets and retail markets in Australia as well as overseas. The company also fulfills demand by exporting its products in overseas market products with low salt levels, added ingredients such as Omega-3 fatty acids for good health.
The Company has a strong market in Asia, which is growing all the time. It’s presence in Asia is from past 40 years and is having a good knowledge of the market – lot of products which the company manufactures is geared towards their customer base. 
Apart from Cheese the company’s other products are: infant formula, mozzarella, nutritional dairy products, cream cheese, milk powders and cheddar.
The company is Australia’s largest manufacturer of Lactoferrin, which provides an antibacterial activity to human infants and is an iron binding protein that minimize infections in the digestive system.
The company is producing over 200,000 tonnes of various products every year. The company also believes in bringing innovation in processing and packaging their products. The company is having high level of automation and is using innovative machineries in their production. Aidan coleman, the CEO of the company says that the company pools its resources with other companies and develops technology as a joint investment.
The company also has robust moral values, as the company has pledged to rural communities and farmers about their long-term commitment. The company is having 5 farmers who are sitting on the Board. Also, the companies all factories except one are based in rural communities. The company also considers hygiene and have various control systems that detect the quality issues in their products. The company human resources is approx. 1200 employees and around 98% of them are from rural backgrounds.
BLACKMORES LIMITED
On the other hand, blackmores Limited is one of the leading companies of Australia in Natural health sector.  The company’s product range is very vast having more than 250 types of vitamins, herbals, minerals, and nutritional supplements are developed by their experts. 
The company’s is working with 1200 employees and its market is expanded around 17 markets (Countries) all over Australia, New-Zealand and Asia. 
The company is also having an institute where research in natural health care sector and education is provided. Core activities includes research funding, education programs, systematic review of natural medicine. Global Therapeutics is one of the Australia’s leading provider of Chinese herbal medicine.
The company is focusing on various corporate social responsibility factors like ways to reduce the environment impact on packaging, increasing recycling rates, and is focusing on innovative packaging solutions. The majority of the company’s products are packed in glass, and removed plastic wastes. The company’s aim is committed towards the community and the company is running various charitable schemes, one of which is Blackmores Sydney running Festival. 
In this assignment, the various contents of Financial Statements of the company are analysed like Cash flow Statements, owner’s Equity, Other Comprehensive Income Statement, and how the company accounts for their income taxes.
OWNERS EQUITY
(i) The components of owner’s equity in Blackmores Limited consists of: Issued Capital, Equity – settled employee benefits reserves, cash flow hedging reserve, foreign currency translation reserve, retained earnings. These components are attributable to owners of the company. After that Non-Controlling Interest are added to it which forms Owner’s Equity.
The owner’s Equity of blackmores Limited is calculated in the following manner:
	
	2018
	2017
	
	$’000
	$’000
	Opening Balance on 2016 and 2017 (A)
	178,819
	180,593
	Profit/(Loss) for the year (Computed from Income Statement)
	69,223
	58,028
	Add: Other Comprehensive Income
	3,228
	(1,961)
	Total Comprehensive Income (B)
	72,451
	56,067
	Less: Dividends paid (C)
	(49,957)
	(58,568)
	Add:  Share-based payments expense (D)
	1,259
	727
	Less: Issue of shares under employee long-term
incentive plans (net of on market purchases and tax) ( E)
	(9,242)
	Nil
	Closing balance on 2017 and 2018 (A+B-C+D-E)
	193,330
	178,819
The components of owner’s equity in Bega cheese Limited consists of: Issued Capital, Share Based payment reserve, Capital profit reserves, hedging reserve, Fair value reserve, transactions with non – controlling Interests and retained earnings. These components are attributable to owners of the company.
The owner’s Equity of Bega cheese Limited is calculated in the following manner:

HI5020 Corporate Accounting Assessment item 2 — Assignment Due date: 11.59pm Friday Week 10 Weighting: 30 % Total Marks: 30 Instructions: 1. This assignment needs to be submitted using safe-assign. No...

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