Analysis Of Financial Position Of Bellamy’s Australia Limited

Ratio Analysis

Introduction:

This report depict about the financial position of Bellamy’s Australia limited. Through this report, the ratio analysis has been done to analyze the investing condition of the company. Consolidate final statements of the company has been analyzed.

Bellamy’s Australia is mainly operating in the food and beverage industry in Australian market. The parent company is Bellamy’s Australia is Bellamy’s organic. It is Australia’s largest organic infant formula producer (Google finance, 2017). This company produces organic food for Australian client. It has been listed in Australian stock exchange in 2014. Outstanding success has been enjoyed by the company in recent years.

(Morningstar, 2017)

Gross profit of Bellamy’s in 2016 is 22.04% in 2016 and 8.80% in 2015. It depict that the gross profit of the company has been enhanced by 150% from last year which is really a great success for the company.

Net profit of Bellamy’s in 2016 is 15.51% in 2016 and 7.20% in 2015. It depict that the gross profit of the company has been enhanced by 115% from last year which is really a great success for the company (Annual report, 2017).

Net profit of Bellamy’s in 2016 is 15.51% in 2016 and 7.20% in 2015. It depict that the net profit of the company has been enhanced by 115% from last year which is really a great success for the company.

Return on investment of Bellamy’s in 2016 is 37.50% in 2016 and 15.28% in 2015. It depict that the return of the company has been enhanced by 145% from last year which is really a great success for the company and investors.

Consolidated profit and loss statement of the company has been analyzed to know the overall performance of the company and it has been analyzed that the revenues of the company has been enhanced with a great % from last year (annual report, 2017). Company has followed the IASB standards and AASB rules to make the profit and loss statement.

As given in the appendix, it has been found through the consolidated profit and loss account of the company that the revenue generated in 2016 is $245 million and in 2015 it was $125 million. The gross profit and net profit of the company has also been increased. The analysis over income statement of Bellamy depict that company is enjoying a current success.

Consolidated financial position statement of the company has been analyzed to know the overall financial performance of the company and it has been analyzed that the assets and equity of the company has been enhanced with a great % from last year. Company has followed the IASB standards and AASB rules to make the financial position statement.

Consolidated Statements

As given in the appendix, it has been found through the consolidated financial position statement of the company that the assets of the company in 2016 was $144 million and in 2015 it was $72 million. The liability of the company has also been enhanced but the increment rate is lower than the assets increment rate. The equity value of the company has been increased double from last year (Annual report, 2017). The analysis over financial statement of Bellamy depict that company is enjoying a current success.

Consolidated cash flow statement of the company has been analyzed to know the overall performance of the company and it has been analyzed that the cash inflow of the company has been enhanced with a great % from last year. Company has followed the IASB standards and AASB rules to make the cash flow statement.

As given in the appendix, it has been found through the consolidated cash flow statement of the company that the cash inflow from operating, financing and investing activities has been enhanced from last year. Cash inflow generated in 2016 is $9 million, -2 million and -6 million and in 2015 it was 5 million, 0 and 23 million in operating, investing and financing activities respectively. Cash at the end of the period was same due to high investment by the company. The analysis over cash flow statement of Bellamy depict that company is enjoying a current success.

Through analyzing the above statements and ratio analysis of the company, it has been found that the efficiency of the company is enhancing rapidly. Through analyzing the data, it could be suggested to investors to buy the shares of the company as the growth of the company would enhance more in near future and thus the worth of invested amount would be higher.

The quality of financial reporting in China: An examination from an accounting restatement perspective:

This journal article depict about the past accounting information and their bad quality in the market of capital of china. A research conducted over many firms depict that the financial data of that companies were of poor quality from 1999 to 2005. It has been found that instead of refinancing the company, the firms are managing the revenues from below the low items (Wang Xia and Wu Min., 2011). This journal depict that the annual report of the china companies from last few years are depicting the wrong information to the stakeholder.

It depict that it is not possible for the stakeholder to analyze the whole information through the final reports as these reports only provide a summary of the company which could be manipulated (Wang Xia and Wu Min., 2011). Through the analysis of the market in this article, it has been analyzed that when a company announces its annual report than the market always get down slightly due to some negative factors of company and market. This all might happened due to the poor accounting framework and unethical practices of the accountants. Accounting information is the annual report is useful too in some manner. The article mainly depict that the annual earning and return of the company matters more for the shareholder of he company.

Usefulness of Annual Reports

This article depict about the Malaysian market. This article depict that the annual reports of an organization are the best source for the investors to get the information about the current situation of the company. This plays the most efficient role to provide the users required information and it also help them to forecast the future cash flows for the purpose of future investment (Ghazali, 2010). Corporate annual report offers the different information to the different users such as it could be used for the company to take bank loan as well as it could help the shareholder to analyze the investment condition in the market.

The main concern of this annual report is to depict about the importance of annual report to get the qualitative as well as quantitative information for the different users if the company. Annual reports are also considered by the internal stakeholder of the company to analyze the future and predict the issues and problems of the company in near future. Seven sections of the annual reports are important to depict the information by the different users. However the article depicts that the current level of organization annual report disclosure in UAE is not attractive and sufficient to offer the full information (Ghazali, 2010).

This article paper depicts the usefulness of annual report of an organization in UAE. It is an attempt to analyse that whether the current practices of organization and its annual reports depict the best information to the stakeholder of the company. However the article depicts that the current level of organization annual report disclosure in UAE is not attractive and sufficient to offer the full information.

Many areas of annual reports have been identified to analyse the importance of annual report in the UAE market (Alzarouni, Aljifri, Ng and Tahir, 2011). The lack of creditability in the information of financial consideration and financial reports non accessibility has been examined. It is an attempt to analyse that whether the current practices of organization and its annual reports depict the best information to the stakeholder of the company (Alzarouni, Aljifri, Ng and Tahir, 2011).

Through analysing all the above three articles it has been found that the annual reports are important to depict the useful quantitative and qualitative information about the organization to the stakeholder. But it has also been found that currently the credibility is getting lower of financial reports and final statements of the company. The information offered by the company in the annual reports are manipulative and the auditor also work under undue influence so that the users of the company are not able to get the true picture of the organization.

Limitations of Annual Reports

The report structures of final statements have been outdated as the information offered by them are quite inaccurate and relies on less credibility (O’Donovan, 2002). The china market is facing a huge loss due to the bad structure and thus the Malaysian market and UAE market is also affected. It is required for the nations to make changes in the structure of annual reports so that the best information could be offered.

I agreed on the point to make some changes in the structure of annual reports as the reports always depict about the profitability of the company (Li, 2008). Losses suffered by the company are not shown in the reports and reports are made in such a way that inventors could attract towards the company and make investment in the company but because of this reason the main picture of the organization is hided and it also offer some issues to the company as the better decision making of company could not be happened.

Thus it could be concluded that the annual reports are quite outdated to inform the users about the true picture of the company to the users and it gives manipulated information about the activities of the company to the users. So it could be said that nations are required to make some changes in the structure of annual reports so that the best information could be offered.

References:

Alzarouni, A., Aljifri, K., Ng, C and Tahir, M, I. (2011). The usefulness of corporate financial reports: Evidence from the United Arab Emirates. Accounting & Taxation, Vol. 3 No. 2, pp. 17-37.

Annual Report. 2017. Bellamy’s Australia Limited. Retrieved from https://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_BAL_2016.pdf on 24 May 2017

Annual Report. 2017. Bellamy’s Australia Limited. Retrieved from https://investors.bellamysorganic.com.au/media/ea194175/Bellamys%20annual%20report%202016.pdf on 24 May 2017

Ghazali, N.A.M. (2010). The importance and usefulness of corporate annual reports in Malaysia. GadjahMada International Journal of Business, Vol. 12 No. 1, pp. 31-54.

Google finance. 2017. Bellamy’s Australia Limited. Retrieved from https://www.google.com/finance?cid=842878503671575 on 24 May 2017

Li, F., 2008. Annual report readability, current earnings, and earnings persistence. Journal of Accounting and economics, 45(2), pp.221-247.

Morning star. 2017. Bellamy’s Australia Limited. Retrieved from https://financials.morningstar.com/cash-flow/cf.html?t=BAL&region=aus&culture=en-US on 24 May 2017

O’Donovan, G., 2002. Environmental disclosures in the annual report: Extending the applicability and predictive power of legitimacy theory. Accounting, Auditing & Accountability Journal, 15(3), pp.344-371.

Wang Xia and Wu Min. (2011). The quality of financial reporting in China: An examination from an accounting restatement perspective. China Journal of Accounting Research, Vol. 4. pp. 167-196.

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