plagiarism should be no more than 10%, include page number tooHI5020 Corporate Accounting ...

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plagiarism should be no more than 10%, include page number too

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 Cover page clearly stating your name and student number b. Executive summary c. A table of content d. A brief introduction of the companies you had chosen and an overview of what you discussed in this assignment e. Body of the report where you write your answers with appropriate section headings f. Conclusion (No recommendation is necessary). g. List of references. (Inclusion of any references in this list without in-text referencing will be a futile exercise.) 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. PRESENTATION You might have to do a presentation in the class where your lecturer will question you from different angles of the assignment and you will have to satisfy the lecturer that you were sufficiently and appropriately involved in preparing the assignment. The presentation will take place in the last hour of the classes of week 11 and week 12. It is the discretion of the lecturer either to ask any student to do the presentation or to award marks to a student without asking to do the presentation. However, every student needs to be prepared for the presentation and well conversant about everything that has been written in the submitted assignment.

unifolks_636728565265377146_121533_1.pdf

Pulkit · Accepted Answer

Executive Summary
In this report the analysis of the financial statement of the companies in the industry of packaging has been done and the top packaging companies of the Australia has been selected for the same including Amcor Limited and the Orora Limited. In the analysis of the annual report of the companies the major focused areas are owners’ equity, cash flow statement, other comprehensive items and the accounting for the corporate taxes. 
Table of Contents
Executive Summary	1
Introduction of the companies	2
Analysis on the company’s financial data:	3
Owners’ Equity:	3
Cash Flow Statement:	6
Other comprehensive income statement:	14
Accounting for corporate income tax	16
Conclusion	19
References	19
	
Introduction of the companies 
1. Amcor Limited:  Amcor Limited engage in the business of packaging of the product including flexible packaging, rigid packaging, specific cartons, closures and services for food, beverages, pharmaceutical, homes and personal care etc. It is one of the largest packaging companies in the world and also listed on the various stock exchanges including Australian stock exchange. It was incorporated as the Amcor in the year 1986. It has two reporting segments including the flexible packaging and the rigid packaging. The company has many headquarters in the world including the major one in the Southbank, victoria, Australia, Zurich and the Switzerland. 
2. Orora Limited:  Orora is the also the company engage in the business of packaging of the products including grocery products, consumer goods, and fast moving food items. The company is operates in the global market and majorly in the New Zealand, United States and the Australia. The company is listed on the Australian stock exchange. The company was founded in the year 2013.in addition to the main course of business of the company, it also engages in providing the various services like printing and stationery, research and technology, product sourcing, logistics and digital technology services etc. The company has headquarters in the Hawthorn, Australia. 
Both the company selected for this assignment are engaged in the business of packaging  of the product and other ancillary services (I.e. belongs to the same industry) and both are the competitors of each other especially in the Australian market. (Frost, G.R., 2007.)
Analysis on the company’s financial data:
Owners’ Equity:
Part i)
	Statement of Equity (Amcor Limited)
	
	
	
	USD Million
	Particulars 
	2018
	2017
	2016
	Contributed equity
	 $  1,400.70 
	 $  1,416.90 
	 $  1,445.10 
	Reserve
	 $   (907.10)
	 $   (881.70)
	 $   (800.20)
	Retained Earnings
	 $     528.10 
	 $     264.90 
	 $     139.00 
In the analysis of the owner’s equity part of the financial statement of the company Amcor Limited it can be estimated that the contribution of the equity is decreases over the period of time this may be due to the continuous loss in the company over the last few year and this will degrade the market value of the company or it can also be possible that the company has done the buyback of the equity shares of the company to increases the earning per share in the tough situation. It is also estimated that the company on the one hand having a negative reserve and on the other hand having a plenty of retained earnings. The retained earnings in the year 2018 are much higher than the other years In the comparative analysis. 
	Statement of Equity ( Orora Limited)
	
	
	
	USD Million
	Particulars 
	2018
	2017
	2016
	Contributed equity
	 $     499.70 
	 $     508.70 
	 $     513.10 
	Treasury shares
	 $     (19.80)
	 $     (36.40)
	 $     (31.30)
	Reserve
	 $     152.10 
	 $     144.00 
	 $     136.80 
	Retained Earnings
	 $     998.50 
	 $     930.50 
	 $     879.00 
In the analysis of the statement of the equity of the company it can be estimated that the company has decreasing trend in the contribution from the shareholders this may be due to the buyback of the equity shares from the public to increase the earnings per share of the company. Also from the analysis of the statement it can also be concluded the financial effectiveness of the company because the reserve and the retained earnings of the company is showing the increasing trend and will increase the market price of the shares of the company and boost the investors belief in the company.
Part ii)
	Statement of debt and equity analysis of the Amcor Limited
	
	
	USD Million
	Particulars 
	2018
	2017
	2016
	Total Debt 
	 $  3,148.00 
	 $  4,068.00 
	 $  4,096.00 
	Total Equity
	 $  1,021.70 
	 $     800.10 
	 $     783.90 
	Debt Equity Ratio
	3.08
	5.08
	5.23
*In the calculation of the total debt only the long term provision has been excluded from the non-current liabilities.
The total debts in the company Amcor Limited is much more as compare to the equity base of the company. The debt equity ratios of the company represent the leverage position of the company. Debt equity ratios of the company due to decrease In the debt of the company and increase in the total equity of the company. However the company is said to be the leveraged company due to the high amount of loans and thereon interest obligation on the company. in overall the debt is much higher in the company and needs the management action to reduce it to the level of 2:1.
	Statement of debt and equity analysis of the Orora Limited
	
	
	USD Million
	Particulars 
	2018
	2017
	2016
	Total Debt 
	$     862.10
	$     806.80
	$     768.70
	Total Equity
	$  1,630.50
	$  1,546.80
	$  1,497.60
	Debt Equity Ratio
	0.53
	0.52
	0.51
*In the calculation of the total debt only the long term provision has been excluded from the non-current liabilities.
The total debt of the company in the total capital employed of the company is very low as compare to the Amcor limited which is the biggest competitor of the company. the lower in the debt ratio of the company is the better for the company and from the above analysis it can be estimated that company is using more of the equity funds in the business as compare to the borrowings this will increase the earnings attributable to the shareholders of the company due to the lower interest burden on the company as compare to the other company in which the funds are borrowed and utilizes in the growth of business. (Farrah, T.F., Filmer, P.J., Hamilton, F.E., Nihill, M.F., Selway, J.W., Shaw, E.Y.N. and Van Den Hout, F.W., Amcor Ltd, 2005.)
Cash Flow Statement:

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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