INDIVIDUAL WRITTEN REPORT

　　This assignment is worth 20%

　　PURPOSE

　　Financial Statement Analysis - To calculate and analyse financial ratios using actual

　　reported data.

　　REQUIRED

　　Given the financial statements and the additional information analyse and discuss the

　　financial performance and position of David Jones. You should refer to the notes to the

　　financial statements for further details and clarifications of changes in the financial

　　statements.

　　Your analysis should be supported by profitability, liquidity, gearing and other appropriate

　　ratios from Chapter 18 of the prescribed textbook.

　　Calculate and analyse financial ratios (percentage and ratio analysis)

　　Use the 2013 and 2012 annual reports to obtain the financial statement figures needed to

　　calculate the ratios (where there is consolidated accounts, use the consolidated amounts). In

　　addition, students are strongly advised to:

　　 perform horizontal and vertical analyses of the Balance Sheets and Income

　　Statements for the company

　　 read all parts of the Annual Reports

　　Instructions

　　Your report should calculate* and analyse the following ratios, in clearly identified separate

　　sections:

　　Profitability

　　Rate of return on net sales

　　Rate of return on total assets

　　Asset turnover

　　Rate of return on ordinary shareholders’ equity

　　Earnings per share (given in the Annual Report)

　　Liquidity

　　Working capital

　　Current ratio and Acid-test ratio

　　Inventory turnover and Days in inventory

　　Gross profit percentage

　　Accounts receivable turnover

　　Days’ sales in receivables

　　Gearing

　　Debt ratio

　　Debt to equity ratio

　　Times interest earned ratio

　　(* Tabulate and show the formula and detailed calculations in an Appendix.)

　　Your analysis should include:

　　 Year-to-year (2013 and 2012) comparisons (horizontal analysis). Use the Director’s

　　Report and the Notes to the Accounts to further justify your answer.

　　 The components of each ratio should be investigated to determine the significant or

　　determining factors in any change to the ratio.

　　 These significant factors should then be investigated to determine (to the extent

　　possible) the cause and sustainability of their change (refer to example below).

　　Example of a current ratio analysis: Company X current ratio increased from 1.2

　　to 4.3. The company increased its ability to pay its debts in the short-term. The

　　main reasons for the increase were a 22% increase in cash and a 14% decrease

　　in accounts payable. The increase in cash and the decrease in accounts payable

　　were both a result of reductions in purchases of inventory. This is unlikely to

　　continue as the company was depleting a previous overstock.

　　Each ratio analysis will be marked on the correctness of the comparisons and the

　　identification of the determining factors. The depth and correctness of analysis of the factors

　　will be the primary criteria for grade differentials in this assignment. The determining factors

　　need not be confined to the annual reports but they must be relevant to your analysis.

　　Administrative Details

　　 Your assignment (in a report form) should be lodged through the Turnitin Assignment

　　folder of Blackboard by 11.59pm Tuesday 21 October 2014. LATE SUBMISSION

　　APPLIES.

　　 This assignment must be typewritten and double-spaced. A copy should always be

　　kept by the student. Attach an Assignment Cover Sheet to your submission (refer to

　　the link on Blackboard - General Policy and Forms).

　　 The Student Manual provides information about the presentation of reports (a link to

　　the Manual is provided in Blackboard). Wherever possible, tabulate your comparative

　　data and show them in an appendix but cross-reference them in your report.

　　 The policies on late submission of assignments and plagiarism are provided in the

　　Course Outline. Extensions with valid reasons will only be considered if the

　　application is made 48 hours prior to submission.

　　 Length: 2,500 words maximum (excluding appendices).

　　Vertical analysis

　　Financial Ratio analysis

　　Conclusion

　　Appendices of calculations/data

　　Consistent fonts and headings

　　Pagination and correct cross-referencing