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Bao 1101 Accounting For Decision Making Assignment Sample

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Bao 1101 Accounting For Decision Making

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Part 1

The share price of the company Super retail group limited has been tracked from the month of August 15th to 8th September. The share value of the company on 15th August was 10.57. The share value declined to 10.07 on 18th August which increased to 10.27 on 19th August. On 23rd August, the value of the stock was 10.42 which moved upward to 10.55 on 24th August (Yahoo, 2022). The value increased to 10.59 on 26th August. On 29th August, the share price declined to 10.21, this value increased to 10.58 on 31st August. On 6th September the share fell to 9.66 which further declined to 9.60 on 7th September. However, the share prices recovered to a few points on 8th September to become 9.78.

Part 2

A. Background of the Company

Background of the Super Retail Group Ltd.

Product and Service provided by the Company

 Super Retail Group is the most reputed and one of the biggest retailers in Australia. Other than that, Super Retail Group Ltd. operates its business internationally, making the company more diverse. Super Retail Group Ltd. generally provides boating products including Lures, Rods, and Leeds. Furthermore, the company provides outdoor equipment including fishing, apparel, outdoor furniture, and many more.

Name of the Chief Executive Officer

 Anthony Heraghty

Salary of the Chief Executive Officer

 $1,993,460 AUD Per Annum

Company's Profit/ loss after Tax

 $244.1 million in the financial year 2021

Latest Dividend paid

 70.0 cents per share. The total Dividend payout for FY22 is 65%.

Size of the Business

 For the financial year 2022, the company's total asset is $2,919 million. The total assets of FY21 are $2,982.8 million AUD. 

The number of Employees

 14,883

Shares price

$12.50 in FY21

Table 1: Background of the Company

(Source: Developed by the Learner)

B. Tracking the share price of the Companies

Super Retail Group Ltd. is one of the biggest retail companies in Australia, although, according to the recent financial statement of the company they are losing the share price which needs to be increased. In the financial year 2021, Super Retail Group Ltd Company’s opening share price was 12.46 to 12.51 and it was one of the highest share prices for a retail company in Australia. Other than that, the company closed its share price at 12.17, which is reduced after a period of time. Other than that, Reece Limited, a comparator of Super Retail Group Ltd showed a better share rate which was 18.41 which is a 0.12 dividend rate and their closing rate is also better than that of Super Retail Group Ltd which is 19.68 (Finance, 2022).

C. Comparing Performances of the Companies

Super Retail Group Ltd is a company that is working for a longer period of time with a market cap of $3.55 billion AUD. Other than that, the company's profit margin was $241.2 million in the financial year 2021. Although, Super Retail Group Ltd company reduced its profit margin in the financial year 2022 (Simplywall, 2022). In the country, Reece Group is performing well in terms of sales revenue and in the financial year 2021, their sales revenue was $6.3 billion AUD. Other than that, Reece Group is increasing its revenue margin by 4% from the year 2020. Other than that, Accent Group’s gross income was $231 million AUD in the financial year 2021 (Wsj, 2022). After analyzing the financial data, it has been clear that Reece Group is increasing its financial performance compared to the other retail companies in Australia.

D. Percentage gain

According to the current portfolio and financial data, it has been clear that Super Retail Group Ltd company is losing its share price and they are also reducing its overall profit gain. According to the financial report of Super Retail Group Ltd company, 6.8% profit has been gained by the company (Simplywall, 2022). Although, the gain percentage is down from 8.7% in the financial year 2021. Other than that, the company's total revenue is $3.55 billion AUD.

E. Observation

According to the observation it has been noticed that Super Retail Group Ltd is reducing its profit margin and they need to increase the management policies for the business operations to increase their revenue percentage (Finance, 2022). In the country, Reece Group is performing well in terms of sales revenue in the financial year 202. After analyzing the financial data, it has been clear that Reece Group is increasing its financial performance.

Part 3

A. consolidated figures

(AUD $000s)

Super retail group limited

Accent Group Ltd

Reece ltd

Revenue / Sales

 23897

20980

25467

Interest Expense or Finance costs

 360

332

345

EBIT

3898

 3459

4567

Net Profit Before Tax

1410

1203

1586

Net Profit After Tax

683

670

 785

Current Assets

2908

 1216

 3459

Total Assets

3187

2879

4098

Current Liabilities

 2158

1201

 2459

Total Liabilities

3006

2304

3980

Total Equity

 367

 345

409

B. Ratio analysis

The liquidity ratio of Super retail group limited is the highest among all the three companies. The current ratio in Super retail group limited. has been calculated to be 1.42 whereas Accent group ltd has a ratio of 1.01 and Reece ltd has a liquidity ratio of 1.41. Thus, the liquidity ratio suggests that Accent Group has the least liquidity among all the three companies. liquidity of the company has been calculated for each of the companies which ascertains the company's ability to convert its assets into cash. It can be assumed that the investors may be interested to invest in a company with higher liquidity (Ac, 2019). Thus, Reece ltd, as well as Super retail group limited, has stable liquidity ratios.

The return on capital employed in Super retail group limited has been observed to be 14.48% whereas the Accent Group has 13.28% which is substantially lower. However, Reece ltd has the highest return on capital of 14.92%. The stability of the companies can be assessed according to the return on capital since it is the main asset of the company (Sciencedirect, 2020). In order to maintain a stable position in the market and perform better, Super retail group must overview the stability ratios. Since Reece ltd limited holds a better position in the capital employed, the stability of the company is higher than the other companies.

As per the calculations suggests, the profitability ratio of Super retail group limited is 10.18%. The ratio is lower in Accent Group Ltd. company with 9.47% and Reece ltd has a gross margin ratio of 10.48%. Thus, it can be said that the company having a better profitability ratio has a better position in the share market (Riiopenjournals, 2019). The profitability of Super Retail Group determines the strong market hold of the company with a high return and profit margin but it needs top to improve its profitability. Thus, Reece ltd has the highest ratio and assures the highest profit in the financial year.

References

  • Ac, 2019. liquidity ratios. Available at: http://jurnal.stie-aas.ac.id/index.php/IJEBAR/article/download/752/387 (Accessed on 8th Sept 2022)
  • Finance, 2022, Reece Limited (REH.AX), Available at:https://finance.yahoo.com/quote/REH.AX/history?period1=1631084207&period2=1662620207&interval=1mo&filter=history&frequency=1mo&includeAdjustedClose=true, (Accessed on: 08/09/2022)
  • Finance, 2022, Super Retail Group Limited (SUL.AX), Available at:https://finance.yahoo.com/quote/SUL.AX/history?period1=1631059200&period2=1633651200&interval=1d&filter=history&frequency=1d&includeAdjustedClose=true (Accessed on: 08/09/2022)
  • Mdpi, 2020.stock market volatility  https://www.mdpi.com/1099-4300/22/5/522/pdf?version=1588577499 (Accessed on 8th Sept 2022)
  • Sciencedirect, 2020. stability ratios. Available at: https://www.sciencedirect.com/science/article/am/pii/S0950061820311089 (Accessed on 8th Sept 2022)
  • Simplywall, 2022, SUL Stock Overvie, Available at:https://simplywall.st/stocks/au/retail/asx-sul/super-retail-group-shares#:~:text=Profit%20margin%3A%206.8%25%20(down,8.7%25%20in%20FY%202021). (Accessed on: 08/09/2022)
  • Wsj, 2022, Accent Group Ltd. Available at:https://www.wsj.com/market-data/quotes/AU/XASX/AX1/financials/annual/income-statement, (Accessed on: 08/09/2022)
  • Yahoo, 2022. Super retail group limited stock price. Available at: https://finance.yahoo.com/quote/SUL.AX?p=SUL.AX&.tsrc=fin-srch (Accessed on 8th Sept 2022)
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