Horizontal/Trend Analysis of Income Statement
Reef casino trust is the single purpose trust and is listed under the Australian securities exchange. The Responsible Entity is jointly owned by Casinos Austria International Limited and Accor Casino Investments (Australia) Pty Ltd. Reef Casino also Trust owns The Reef Hotel Casino complex in Cairns (The Reef Casino Trust | 5 Star Hotels Casino – The Reef Hotel Casino, 2017).
| Horizontal/Trend Analysis | ||||||
|
2014 |
2015 |
2016 |
2014 |
2015 |
2016 |
|
|
REVENUE AND OTHER INCOME |
||||||
|
Revenue |
$ 22,846.00 |
$ 25,094.00 |
$ 22,322.00 |
100% |
110% |
98% |
|
Other income |
$ 8.00 |
$ 8.00 |
$ 8.00 |
100% |
100% |
100% |
|
TOTAL REVENUE AND OTHER INCOME |
$ 22,854.00 |
$ 25,102.00 |
$ 22,330.00 |
100% |
110% |
98% |
|
EXPENSES |
||||||
|
Depreciation and amortisation |
$ 4,412.00 |
$ 4,528.00 |
$ 4,556.00 |
100% |
103% |
103% |
|
Property outgoings |
$ 1,212.00 |
$ 1,217.00 |
$ 1,180.00 |
100% |
100% |
97% |
|
Rates and taxes |
$ 793.00 |
$ 804.00 |
$ 800.00 |
100% |
101% |
101% |
|
Responsible Entity fees |
$ 1,054.00 |
$ 1,107.00 |
$ 1,104.00 |
100% |
105% |
105% |
|
Repairs and maintenance |
$ 963.00 |
$ 774.00 |
$ 978.00 |
100% |
80% |
102% |
|
Insurance |
$ 551.00 |
$ 548.00 |
$ 569.00 |
100% |
99% |
103% |
|
Project development costs |
$ 602.00 |
$ 273.00 |
$ 273.00 |
100% |
45% |
45% |
|
Other expenses |
$ 888.00 |
$ 735.00 |
$ 769.00 |
100% |
83% |
87% |
|
TOTAL EXPENSES |
$ 10,475.00 |
$ 9,986.00 |
$ 10,229.00 |
100% |
95% |
98% |
|
RESULTS FROM OPERATING ACTIVITIES |
$ 12,379.00 |
$ 15,116.00 |
$ 12,101.00 |
100% |
122% |
98% |
|
Finance costs attributable to unit holders |
$ 6,032.00 |
$ 7,480.00 |
$ 5,952.00 |
100% |
124% |
99% |
|
Interest expense on financial liabilities measured at amortised cost |
$ 315.00 |
$ 156.00 |
$ 197.00 |
100% |
50% |
63% |
|
TOTAL FINANCE COSTS |
$ 6,347.00 |
$ 7,636.00 |
$ 6,149.00 |
100% |
120% |
97% |
|
PROFIT FOR THE YEAR |
$ 6,032.00 |
$ 7,480.00 |
$ 5,952.00 |
100% |
124% |
99% |
|
OTHER COMPREHENSIVE INCOME FOR THE YEAR |
$ – |
$ – |
$ – |
|||
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
$ 6,032.00 |
$ 7,480.00 |
$ 5,952.00 |
100% |
124% |
99% |
|
Basic and diluted earnings per unit (cents) |
24.2 |
30.04 |
23.9 |
100% |
124% |
99% |
|
2014 |
2015 |
2016 |
2014 |
2015 |
2016 |
|
|
ASSETS |
||||||
|
Cash and cash equivalents |
$ 4,397.00 |
$ 4,252.00 |
$ 4,775.00 |
100% |
97% |
112% |
|
Receivables |
$ 1,858.00 |
$ 2,190.00 |
$ 2,309.00 |
100% |
118% |
105% |
|
TOTAL CURRENT ASSETS |
$ 6,255.00 |
$ 6,442.00 |
$ 7,084.00 |
100% |
103% |
110% |
|
Receivables |
$ 750.00 |
$ 750.00 |
$ 750.00 |
100% |
100% |
100% |
|
Property, plant and equipment |
$ 99,994.00 |
$ 98,804.00 |
$ 1,01,547.00 |
100% |
99% |
103% |
|
Intangible assets |
$ 167.00 |
$ 113.00 |
$ 132.00 |
100% |
68% |
117% |
|
TOTAL NON-CURRENT ASSETS |
$ 1,00,911.00 |
$ 99,667.00 |
$ 1,02,429.00 |
100% |
99% |
103% |
|
TOTAL ASSETS |
$ 1,07,166.00 |
$ 1,06,109.00 |
$ 1,09,513.00 |
100% |
99% |
103% |
|
LIABILITIES |
||||||
|
Payables |
$ 5,181.00 |
$ 5,847.00 |
$ 4,999.00 |
100% |
113% |
85% |
|
Loans and borrowings |
$ 2,900.00 |
$ – |
$ – |
100% |
0% |
0% |
|
TOTAL CURRENT LIABILITIES |
$ 8,081.00 |
$ 5,847.00 |
$ 4,999.00 |
100% |
72% |
85% |
|
Loans and borrowings |
$ – |
$ 1,700.00 |
$ 7,200.00 |
100% |
424% |
|
|
Deferred income |
$ 50.00 |
$ 42.00 |
$ 35.00 |
100% |
84% |
83% |
|
Issued units – liability portion |
$ 85,051.00 |
$ 85,051.00 |
$ 85,051.00 |
100% |
100% |
100% |
|
TOTAL NON-CURRENT LIABILITIES |
$ 85,101.00 |
$ 86,793.00 |
$ 92,286.00 |
100% |
102% |
106% |
|
TOTAL LIABILITIES |
$ 93,182.00 |
$ 92,640.00 |
$ 97,285.00 |
100% |
99% |
105% |
|
EQUITY |
||||||
|
Issued units – equity portion |
$ 85,051.00 |
$ 85,051.00 |
$ 85,051.00 |
100% |
100% |
100% |
|
Distribution account |
$ 4,742.00 |
$ 4,227.00 |
$ 2,990.00 |
100% |
89% |
71% |
|
Undistributed income |
$ 6,034.00 |
$ 6,034.00 |
$ 6,034.00 |
100% |
100% |
100% |
|
Accumulated losses |
$ (81,843.00) |
$ (81,843.00) |
$ (81,843.00) |
100% |
100% |
100% |
|
TOTAL EQUITY |
$ 13,984.00 |
$ 13,469.00 |
$ 12,232.00 |
100% |
96% |
91% |
|
TOTAL EQUITY AND LIABILITIES |
$ 1,07,166.00 |
$ 1,06,109.00 |
$ 1,09,517.00 |
100% |
99% |
103% |
|
MEMORANDUM NOTE – ISSUED UNITS |
||||||
|
Issued units – liability portion |
85051 |
85051 |
85051 |
|||
|
Issued units – equity portion |
85051 |
85051 |
85051 |
|
Horizontal/Trend Analysis |
||||||
|
2014 |
2015 |
2016 |
2014 |
2015 |
2016 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||
|
Cash receipts in the course of operations |
$ 24,915.00 |
$ 27,124.00 |
$ 24,333.00 |
100% |
109% |
98% |
|
Cash payments in the course of operations |
$ -8,375.00 |
$ -8,112.00 |
$ -8,087.00 |
100% |
97% |
97% |
|
Interest received |
$ 119.00 |
$ 101.00 |
$ 91.00 |
100% |
85% |
76% |
|
Interest and other finance costs paid |
$ -315.00 |
$ -152.00 |
$ -190.00 |
100% |
48% |
60% |
|
NET CASH FROM OPERATING ACTIVITIES |
$ 16,344.00 |
$ 18,961.00 |
$ 16,147.00 |
100% |
116% |
99% |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||
|
Payments for property, plant and equipment |
$ -2,112.00 |
$ -2,846.00 |
$ -6,173.00 |
100% |
135% |
292% |
|
Proceeds of disposal of property, plant and equipment |
$ 36.00 |
$ 5.00 |
$ 6.00 |
100% |
14% |
17% |
|
NET CASH FROM INVESTING ACTIVITIES |
$ -2,076.00 |
$ -2,841.00 |
$ -6,167.00 |
100% |
137% |
297% |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||
|
Drawdown of loan |
$ 8,000.00 |
$ 9,000.00 |
$ 11,000.00 |
100% |
113% |
138% |
|
Repayment of loan |
$ -10,000.00 |
$ -10,200.00 |
$ -5,500.00 |
100% |
102% |
55% |
|
Distributions paid (equity portion and liability portion) |
$ -13,083.00 |
$ -15,065.00 |
$ -14,417.00 |
100% |
115% |
110% |
|
NET CASH FROM FINANCING ACTIVITIES |
$ -15,083.00 |
$ -16,265.00 |
$ -8,917.00 |
100% |
108% |
59% |
|
Net increase/(decrease) in cash held |
$ -1,515.00 |
$ -145.00 |
$ 523.00 |
100% |
10% |
-35% |
|
Cash and cash equivalents at 1 January |
$ 5,912.00 |
$ 4,397.00 |
$ 4,252.00 |
100% |
74% |
72% |
|
CASH AND CASH EQUIVALENTS AT 31 DECEMBER |
$ 4,397.00 |
$ 4,252.00 |
$ 4,775.00 |
100% |
97% |
109% |
Net profit of Reef casino trust increased by 24% from 2014 to 2015, however, in 2016 in reduced to 99% as compared to 2014. Total asset as well as liabilities of the company reduced to 99% during 2015 as compared to 2014. However, during 2016 total assets goes up to 103% and at the same time total liabilities also went up to 105%. Other crucial findings from the analysis are as follows:
- Total revenue increased in 2015 and reduced in 2016 slightly
- Total expenses of the company in decreasing trend from 2014 to 2016. It is a good sign for the company as it will assist in increasing the net earnings of the company
- The earnings per share to the shareholders also goes up by 24% during 2015, however it dropped to 99% in 2016 as compared to 2014.
- Total current assets of the company are in increasing trend and it goes up to 103% in 2015 and further to 110% in 2016 as compared to 2014.
- The non-current assets of the company slightly reduced by 1% during 2015, however, it went up by 3% during 2016.
- The current liabilities of the company are in decreasing trend and the company was able to pay off their current liabilities and thereby reduced it 28% during 2015, however during 2016, the current liabilities goes up slightly as compared to 2015
- The non-current liabilities of the company is in slightly increasing trend and goes up by 2% and 6% respectively during 2015 and 2016 as compared to 2014
- Shareholders’ equity was in decreasing trend and reduced to 96% and 91% respectively during 2015 and 2016 as compared to 2014.
- Cash flow from operating activities increased by 16% during 2015, however, it reduced to 99% during 2016
- Cash flow from investing activities are in increasing trend and increased by 37% during 2015, further increased by huge 197% 2016.
- Cash flow from financing activities increased by 8% during 2015, however, it significantly reduced to 59% during 2016
|
Vertical Analysis |
||||||
|
2014 |
2014 |
2015 |
2015 |
2016 |
2016 |
|
|
REVENUE AND OTHER INCOME |
||||||
|
Revenue |
$ 22,846.00 |
100% |
$ 25,094.00 |
100% |
$ 22,322.00 |
100% |
|
Other income |
$ 8.00 |
0% |
$ 8.00 |
0% |
$ 8.00 |
0% |
|
TOTAL REVENUE AND OTHER INCOME |
$ 22,854.00 |
100% |
$ 25,102.00 |
100% |
$ 22,330.00 |
100% |
|
EXPENSES |
||||||
|
Depreciation and amortisation |
$ 4,412.00 |
42% |
$ 4,528.00 |
45% |
$ 4,556.00 |
45% |
|
Property outgoings |
$ 1,212.00 |
12% |
$ 1,217.00 |
12% |
$ 1,180.00 |
12% |
|
Rates and taxes |
$ 793.00 |
8% |
$ 804.00 |
8% |
$ 800.00 |
8% |
|
Responsible Entity fees |
$ 1,054.00 |
10% |
$ 1,107.00 |
11% |
$ 1,104.00 |
11% |
|
Repairs and maintenance |
$ 963.00 |
9% |
$ 774.00 |
8% |
$ 978.00 |
10% |
|
Insurance |
$ 551.00 |
5% |
$ 548.00 |
5% |
$ 569.00 |
6% |
|
Project development costs |
$ 602.00 |
6% |
$ 273.00 |
3% |
$ 273.00 |
3% |
|
Other expenses |
$ 888.00 |
8% |
$ 735.00 |
7% |
$ 769.00 |
8% |
|
TOTAL EXPENSES |
$ 10,475.00 |
100% |
$ 9,986.00 |
100% |
$ 10,229.00 |
100% |
|
RESULTS FROM OPERATING ACTIVITIES |
$ 12,379.00 |
$ 15,116.00 |
$ 12,101.00 |
|||
|
Finance costs attributable to unit holders |
$ 6,032.00 |
95% |
$ 7,480.00 |
98% |
$ 5,952.00 |
97% |
|
Interest expense on financial liabilities measured at amortised cost |
$ 315.00 |
5% |
$ 156.00 |
2% |
$ 197.00 |
3% |
|
TOTAL FINANCE COSTS |
$ 6,347.00 |
100% |
$ 7,636.00 |
100% |
$ 6,149.00 |
100% |
|
PROFIT FOR THE YEAR |
$ 6,032.00 |
100% |
$ 7,480.00 |
100% |
$ 5,952.00 |
100% |
|
OTHER COMPREHENSIVE INCOME FOR THE YEAR |
$ – |
$ – |
$ – |
|||
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
$ 6,032.00 |
100% |
$ 7,480.00 |
100% |
$ 5,952.00 |
100% |
|
Basic and diluted earnings per unit (cents) |
24.2 |
30.04 |
23.9 |
|
Vertical Analysis |
||||||
|
2014 |
2015 |
2016 |
||||
|
ASSETS |
||||||
|
Cash and cash equivalents |
$ 4,397.00 |
70% |
$ 4,252.00 |
66% |
$ 4,775.00 |
67% |
|
Receivables |
$ 1,858.00 |
30% |
$ 2,190.00 |
34% |
$ 2,309.00 |
33% |
|
TOTAL CURRENT ASSETS |
$ 6,255.00 |
100% |
$ 6,442.00 |
100% |
$ 7,084.00 |
100% |
|
Receivables |
$ 750.00 |
1% |
$ 750.00 |
1% |
$ 750.00 |
1% |
|
Property, plant and equipment |
$ 99,994.00 |
99% |
$ 98,804.00 |
99% |
$ 1,01,547.00 |
99% |
|
Intangible assets |
$ 167.00 |
0% |
$ 113.00 |
0% |
$ 132.00 |
0% |
|
TOTAL NON-CURRENT ASSETS |
$ 1,00,911.00 |
100% |
$ 99,667.00 |
100% |
$ 1,02,429.00 |
100% |
|
TOTAL ASSETS |
$ 1,07,166.00 |
$ 1,06,109.00 |
$ 1,09,513.00 |
|||
|
LIABILITIES |
||||||
|
Payables |
$ 5,181.00 |
64% |
$ 5,847.00 |
100% |
$ 4,999.00 |
100% |
|
Loans and borrowings |
$ 2,900.00 |
36% |
$ – |
0% |
$ – |
0% |
|
TOTAL CURRENT LIABILITIES |
$ 8,081.00 |
100% |
$ 5,847.00 |
$ 4,999.00 |
100% |
|
|
Loans and borrowings |
$ – |
$ 1,700.00 |
2% |
$ 7,200.00 |
8% |
|
|
Deferred income |
$ 50.00 |
0% |
$ 42.00 |
0% |
$ 35.00 |
0% |
|
Issued units – liability portion |
$ 85,051.00 |
100% |
$ 85,051.00 |
98% |
$ 85,051.00 |
92% |
|
TOTAL NON-CURRENT LIABILITIES |
$ 85,101.00 |
100% |
$ 86,793.00 |
100% |
$ 92,286.00 |
100% |
|
TOTAL LIABILITIES |
$ 93,182.00 |
$ 92,640.00 |
$ 97,285.00 |
|||
|
EQUITY |
||||||
|
Issued units – equity portion |
$ 85,051.00 |
608% |
$ 85,051.00 |
631% |
$ 85,051.00 |
695% |
|
Distribution account |
$ 4,742.00 |
34% |
$ 4,227.00 |
31% |
$ 2,990.00 |
24% |
|
Undistributed income |
$ 6,034.00 |
43% |
$ 6,034.00 |
45% |
$ 6,034.00 |
49% |
|
Accumulated losses |
$ (81,843.00) |
-585% |
$ (81,843.00) |
-608% |
$ (81,843.00) |
-669% |
|
TOTAL EQUITY |
$ 13,984.00 |
100% |
$ 13,469.00 |
100% |
$ 12,232.00 |
100% |
|
TOTAL EQUITY AND LIABILITIES |
$ 1,07,166.00 |
$ 1,06,109.00 |
$ 1,09,517.00 |
|||
|
MEMORANDUM NOTE – ISSUED UNITS |
||||||
|
Issued units – liability portion |
85051 |
85051 |
85051 |
|||
|
Issued units – equity portion |
85051 |
85051 |
85051 |
|
Vertical Analysis |
||||||
|
2014 |
2014 |
2015 |
2015 |
2016 |
2016 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||
|
Cash receipts in the course of operations |
$ 24,915.00 |
152% |
$ 27,124.00 |
143% |
$ 24,333.00 |
151% |
|
Cash payments in the course of operations |
$ -8,375.00 |
-51% |
$ -8,112.00 |
-43% |
$ -8,087.00 |
-50% |
|
Interest received |
$ 119.00 |
1% |
$ 101.00 |
1% |
$ 91.00 |
1% |
|
Interest and other finance costs paid |
$ -315.00 |
-2% |
$ -152.00 |
-1% |
$ -190.00 |
-1% |
|
NET CASH FROM OPERATING ACTIVITIES |
$ 16,344.00 |
100% |
$ 18,961.00 |
100% |
$ 16,147.00 |
100% |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||
|
Payments for property, plant and equipment |
$ -2,112.00 |
102% |
$ -2,846.00 |
100% |
$ -6,173.00 |
100% |
|
Proceeds of disposal of property, plant and equipment |
$ 36.00 |
-2% |
$ 5.00 |
0% |
$ 6.00 |
0% |
|
NET CASH FROM INVESTING ACTIVITIES |
$ -2,076.00 |
100% |
$ -2,841.00 |
100% |
$ -6,167.00 |
100% |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||
|
Drawdown of loan |
$ 8,000.00 |
-53% |
$ 9,000.00 |
-55% |
$ 11,000.00 |
-123% |
|
Repayment of loan |
$ -10,000.00 |
66% |
$ -10,200.00 |
63% |
$ -5,500.00 |
62% |
|
Distributions paid (equity portion and liability portion) |
$ -13,083.00 |
87% |
$ -15,065.00 |
93% |
$ -14,417.00 |
162% |
|
NET CASH FROM FINANCING ACTIVITIES |
$ -15,083.00 |
100% |
$ -16,265.00 |
100% |
$ -8,917.00 |
100% |
|
Net increase/(decrease) in cash held |
$ -1,515.00 |
-34% |
$ -145.00 |
-3% |
$ 523.00 |
11% |
|
Cash and cash equivalents at 1 January |
$ 5,912.00 |
134% |
$ 4,397.00 |
103% |
$ 4,252.00 |
89% |
|
CASH AND CASH EQUIVALENTS AT 31 DECEMBER |
$ 4,397.00 |
100% |
$ 4,252.00 |
100% |
$ 4,775.00 |
100% |
It can be seen from the above vertical analysis that the total revenue of the company are coming from the revenue part and it has negligible amount of revenue from other sources. Further, the major part that is, 42% in 2015 and 45% each in 2015 and 2016 are contributed to depreciation and amortisation. The finance cost of the company majorly consists of the cost attributable to the unit holders and it amounted to 95%, 98% and 97% respectively during 2014, 2015 and 2016.
In the balance sheet, it is identified that the current asses of the company majorly consists of the cash and cash equivalents throughout all the year under consideration and it is 70%, 66% and 67% respectively for 2014,2015 and 2016. Out of the total non-current assets of the company majority part that is 99% is consists of property, plant and equipment. Moreover, the current liability portion majorly consists of the liability portion of issued units.
| Type |
Formula |
2014 |
2015 |
2016 |
|
LIQUIDITY RATIO |
||||
|
Current ratio |
Current asset/current liabilities |
0.77 |
1.10 |
1.42 |
|
Acid test ratio |
(Current assets-receivables) / current liabilities |
0.54 |
0.73 |
0.96 |
|
LEVERAGE RATIO |
||||
|
Debt-Equity ratio |
Total debt/total equity |
0.21 |
0.13 |
0.59 |
|
Fixed asset-equity ratio |
Fixed asset/equity |
7.22 |
7.40 |
8.37 |
|
PROFITABILITY RATIO |
||||
|
Net profit margin |
Net profit/net sales *100 |
26.40 |
29.81 |
26.66 |
|
Return on asset |
Net income/total assets * 100 |
5.63 |
7.05 |
5.43 |
|
ACTIVITY RATIO |
||||
|
Total asset turnover |
Sales/total assets |
0.21 |
0.24 |
0.20 |
|
Fixed asset turnover |
Sales/Fixed asset |
0.23 |
0.25 |
0.22 |
Liquidity ratio – Liquidity ratios reveals the relationship among current asst and current liabilities and analyzes the ability of the firm to pay-off its current obligations out of their current assets. The current ratio of the company in 2014 was 0.77 and increased to 1.10 in 2015 and 1.42 in 2016. Further, the acid test ratio or quick ratio of the company also went up from 054 in 2014 to 0.73 in 2015 and further to 0.96 in 2016. That is a good sign that the ability of the company to meet its current obligation is increasing.
Leverage ratio – This ratio reveals the relationship between Long term debt and total equity and total assets of the company. For Reef casino trust, debt-equity ratio stands at 0.21 for 2014 and significantly reduced to 0.13 in 2015 and further in 2016 it went up to as high as 0.59. This fluctuation shows that the company is not stable in terms of its debt. This fixed asset to equity reveals the relationship among fixed asset of the company and the equity held by organization. This ratios show that the company is in well position as per this ratio;
Profitability ratio – this ratio reveals the net profit of the company in term of its sales. From both the profitability ratio it can be seen that the company is in good position with regard to both the net profit ratio as well as return on assets ratio (Boyas & Teeter, 2017).
Activity ratio – this ratio shows the efficient utilization of the available asset of the company. From both the total asset turnover and fixed asset turnover, it can be identified that the ratio is moving around 0.20 to 0.25. This reveals that the company is efficiently utilizing its assets for generating profit.
Conclusion
It can be concluded from the above discussion that the financial position of Reef casino trust over the last three years are quite stable and the company was able to generate profit out of its total revenue over all the years. However, the total revenue of the company are coming from the revenue part and it has negligible amount of revenue from other sources. Further, it is identified that the current asses of the company majorly consists of the cash and cash equivalents throughout all the year under consideration. Therefore, company should take appropriate steps to increase the income from other sources and shall utilise he surplus fund to acquire more current assets.
Reference
Boyas, E., & Teeter, R. (2017). Teaching Financial Ratio Analysis using XBRL. Developments in Business Simulation and Experiential Learning, 44(1).
The Reef Casino Trust | 5 Star Hotels Casino – The Reef Hotel Casino. (2017). Reefcasino.com.au. Retrieved 29 April 2017, from https://www.reefcasino.com.au/reef-casino-trust
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