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  • BAE

Distinguish between current and non-current liabilities, provisions and contingencies

Task: Unit Learning Outcomes 1. Demonstrate an understanding of the accounting environment. 2. Show an ability to apply accounting vocabulary, principles and concepts. 3. Distinguish between current and non-current liabilities, provisions and contingencies. 4. Analyse, record, and report Current and non-current assets. 5. Analyse and interpret financial statements. Read the financial statements from the annual report and write a report including following tasks: 1. Provide a brief of the company (Name, year of establishment, history, background, the product/service they deal in, mission)? Select the latest year for review. 2. Referring to the director’s report section, list three or four main directors along with a brief summary of director’s report. The summary should include discussion on the following: a) Whether the company’s finances are in good health; b) Whether the company has the capacity to expand and grow; c) How well the company is complying with financial regulations, accounting standards and social responsibility requirements. 3. Who are the auditors? Provide a brief summary of auditor’s report after referring the auditor’s report section. 4. Provide horizontal analysis (bar chart, pie chart can be useful for this type of trend) of important variables such as sales and EBIT. 5. Compute the ROE for the financial year-end (select the latest year for review). Identify the most significant accounting recognition and measurement accounting choices that could result to a bias in ROE. 6. What are the changes in equity? (See the company’s statement of changes in equity). How has the company’s equity changed from the previous year in terms of value and in terms of percentage? 7. What was the retained profit for the year? Has the company taken any borrowings, i.e. loans, debentures, etc.? 8. Based on the income statement, balance sheet & cash flow statement, calculate the following ratios and comment on the financial health of the company based on your calculations: Liquidity ratios Asset turnover ratio Leverage ratios

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