BAO1101 Accounting For Decision Making

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BAO1101 Accounting For Decision Making

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BAO1101 Accounting For Decision Making

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Course Code: BAO1101
University: Victoria University

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

Question:

1.Understand how to use accounting information for decision-making.
2.Critically analyse the impact of company information on share price in the Australasian context.
3.Understand the sharemarket activities and financial analysis.
4.Gain practical experience in share-market activities, making decisions and monitoring the sharemarket.
5.Demonstrate knowledge of sharemarket activities and evaluate the impact of the share price on the total value of a share portfolio.

Answer:

Findings & Analysis
Description

Particulars

Products And Services

Computers , bedding, consumer electrical products, communications and furniture

Name Of Chief Executive Officer

K.L Page

Salary of Chief Executive Officer

$3,082,886

Profit / Loss After Tax from 2016 Annual Report – consolidated figures

$348.61M

Latest Dividend Paid – Dividend Per Share and Date Paid

30.0 c

Size By Total Assets – 2016 Annual Report – consolidated figures

$4,431,800

Number Of Employees

As per the annual report, the parent company does not have any employees

Share Price 52 week High / Low

High-$4.40 and $3.99

Tracking Period
Investigation of the Performance
The Share price of the stock of Harvey Norman had been increasing from the month of July 2016 and maintained the position until January 2017. But, later after January 2017, the share prices marked a downward trend in the share market price that was seen as 3.69 in April 2017. The company maintained an approximately price of 5 between the period i.e. July 2016 to January 2017 that was comparatively higher than the other periods. But, later the stocks faced a decline that does not represent the best performance of the stock.
In comparison to the share index i.e. ASX 200, the shares of the company Harvey Norman performed in a comparatively poorer manner. The scenario continued starting from and after the periods of December 2016 and then the company started facing a downward trend in compared to the stock of Australia. The index of Australia started facing an upward trend and the same continued to perform in a stable manner. While on the other hand, the stock of the company performed poorly and started facing a downward trend.
Each of the shares of Harvey Norman has been performing in the trend of ASX200 index share but in recent months the same had declined. The company must focus on increasing the prices and maintaining the position that must be taken into account of the Chief Executive Officer (Lukas et al. 2013).
Analysis of the gain or loss from portfolio
Share price at 14th April 2016= 4.56
Total Investment = $15000
Number of share purchased = 4065
Share price at 13th May 2017= 3.69
The total opening price=$18536
Number of shares holding =4065
Closing price=3.69
Profit or loss at 6th may 2017= $(18536-15000) =$3536
The gain is $3536 as per the tracking period under the calculation.
Conclusion
The shares of the company must be held rather than selling at the early stages as the company had been maintaining a stable trend until January 2017. The position has declined but as the company is a prospering one, the company’s position will not decline to an unstable one.
The Chief Executive Officer must take steps in maintaining the position and controlling the fluctuations in the prices of the stock. The gain that has been earned with the portfolio is also a considered to be a main reason of upholding the shares.
Identification of the Financial Data of important nature
The figures for 1 July 2015 to 30 June 2016 are as follows:

Particulars

Amount ($’000)

Revenue / Sales

1,795,759

Interest Expense

28,706

EBIT(Earnings before Interest and Income Tax)

552,470

Net Profit Before Tax

493,763

Net Profit After Tax

351,340

Current Assets

1,605,547

Total Assets

4431,800

Current Liabilities

1,279,012

Total Liabilities

1,743,126

Total Equity

2,688,674

Analysis of the Financial Ratios
Profitability ratio
2016
= (351340/1795759)*100
=19.56%
The ratio has been increasing with the increase in the sales over the years and hence the company is maintaining the net profit margin.
Stability Ratio
2016
= 201042/2688674
=0.07
There was a decline in the debt to equity i.e. the financial leverage ratio over the years. It is the total debts on the total equity held by the company and lower ratio represents a higher efficiency of the company in maintaining the debts with the available investments.
Liquidity
2016
= 1605547/1279012
=1.26
The ratio of the current assets by the current liabilities had declined and the same is not good news for the company. The company is not being able to meet the current and short term obligations with the available current assets. Therefore, the steps must be taken to stabilize the ratio (Gibson 2012).
Reference List
Bodie, Z., 2013. Investments. McGraw-Hill.
Benson, P., 2014. Sharing is caring. Electrical Connection, (Autumn 2014), p.132.
Brigham, E. F., and Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.
Frias?Aceituno, J. V., Rodríguez?Ariza, L., and Garcia?Sánchez, I. M. (2014). Explanatory factors of integrated sustainability and financial reporting. Business strategy and the environment, 23(1), 56-72.
Gibson, C. (2012). Financial reporting and analysis. Nelson Education.
https://www.asx.com.au/asx/research/company.do#!/CCL/statistics/shares
Lukas, B.A., Whitwell, G.J. and Heide, J.B., 2013. Why do customers get more than they need? How organizational culture shapes product capability decisions. Journal of Marketing, 77(1), pp.1-12.
Saunders, A., and Cornett, M. M. (2014). Financial institutions management. McGraw-Hill Education,

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