ACCT13017 Financial Statement Analysis ASS#1

ASSIGNMENT 1 (ASS#1): UNDERSTANDING THE PAST

DUE: 11.00am Monday Week 7

Step 1: to be completed by 11.00am Thursday (Week 1)
Step 2: to be completed by 11.00am Friday (Week 2)
Step 6: to be completed by 11.00am Monday (Week 4)
Please submit your Step 1 in Moodle in the ASS#1 Step 1 section.
Please submit your Step 2 in Moodle in the ASS#1 Step 2 section.
Please submit your Step 6 in Moodle in the ASS#1 Step 6 section.
Please submit your Steps 3-5 & 7-8 in Moodle in the ASS#1 Steps 3-5 & 7-8 section.

Estimated (max.) time required: about 32 – 37 hrs

Find Your Firm’s Annual Reports and Spreadsheet

This assignment is made up of eight (8) steps. You will have the opportunity to explore
what your own company does and what your firm’s financial statements may have to tell
you about your firm. You can also review your Excel skills (entering data, linking cells
between worksheets, using formulas, formatting cells).
The key things to achieve in your ASS#1 is to:
 find your company’s latest annual report and have a look at it; get a feel for what
your firm does; and see what you can understand about your firm from its
financial statements. Can you remember what it was like when you did a similar
task for your firm in ACCT11059 Accounting, Learning & Online Communication at
the beginning of your degree?
 input your company’s last four years of financial statements into your
spreadsheet and restate these financial statements (to clearly separate the
operating and financial activities of your firm).
 calculate key ratios for your firm.
You will review and build on what you have learnt in ACCT11059 Accounting, Learning &
Online Communication as well as on other aspects of accounting that you have learnt in
other accounting units you have studied throughout your degree. As well, you will have
the opportunity to experience how interacting with others in our unit may be able to
help you better understand your firm.

Introduction
It is expected you will have already set up your personal profile on Moodle and that you
will have a blog (which you will have used for ACCT11059 Accounting, Learning & Online
Communication and ACCT11081 Introductory Financial Accounting). This will help others
in the unit to get to know you and to discuss and share draft work, as we all work
together to learn and develop further our own personal insights into the world of

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accounting. If you have not done this already, you will need to set up your personal
profile on Moodle and your blog now. To do this, please follow these instructions.
Make sure you include a link to your blog in your Word document when you submit your
ASS#1. Also, make sure you connect with the blogs of other people in our unit; as we
learn with and from each other.

Step 1: Due: 11.00am Thursday, Week 1 (3 marks)

This step involves you writing down some of your ideas, reflections and reactions to
reading the Preface and Chapter 1 in the Study Guide.

Read the Preface and Chapter 1 (‘Focus on Reality’) in the Study Guide. Read it like you
would a novel or any book, actively seeking to engage with the author and to
understand what you are reading. What is the author trying to say? Let the author take
you on a journey; go with him and see what you think of some of the key ideas and
concepts discussed.

And while you do this, note down key concepts that occur to you. Also, include any
questions that occur to you as you are reading. What do you find confusing, difficult to
understand or believe, boring, exciting or surprising? Include some of your key concepts
and questions (KCQs) in a Word document.
For further guidance on how to write your key concepts and questions (KCQs) see the
video “How to Write KCQs”. You can also find this video in the Video section on the left-
hand side of Moodle.
Your personal engagement with the reading is what we are interested in. Do not simply
summarise the readings. We are interested in your reactions, understanding, and
questions from the readings. Use the words “I” and “me”. Different people will have
different reactions to the readings. Tell us what your reactions are. Be genuine and
honest in your reactions to the readings.
Please submit this step as a Word document.
Please allow up to 3 – 3½ hours to complete this step (if you have English as your
second language, you may need to increase this time).

Step 2: Due: 11.00am Friday, Week 2 (3 marks)

This step involves you writing down some of your ideas, reflections and reactions to
reading Chapter 2 and Chapter 3 in the Study Guide.

Read Chapter 2 (‘How a Firm Adds Value’) and Chapter 3 (‘Many Ways to Assess Value’)
in the Study Guide. Read it like you would a novel or any book, actively seeking to
engage with the author and to understand what you are reading. What is the author
trying to say? Let the author take you on a journey: go with him and see what you think
of some of the key ideas and concepts being discussed.

And while you do this, note down key concepts that occur to you. Also, include any
questions that occur to you as you are reading. What do you find confusing, difficult to

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understand or believe, boring, exciting or surprising? Include some of your key concepts
and questions (KCQs) in a Word document.
For further guidance on how to write your key concepts and questions (KCQs) see the
video “How to Write KCQs”. You can also find this video in the Video section on the left-
hand side of Moodle.
Your personal engagement with the reading is what we are interested in. Do not simply
summarise the readings. We are interested in your reactions, understanding, and
questions from the readings. Use the words “I” and “me”. Different people will have
different reactions to the readings. Tell us what your reactions are. Be genuine and
honest in your reactions to the readings.
Please submit this step as a Word document.
Please allow up to about 4 – 4½ hours to complete this step (if you have English as
your second language, you may need to increase this time).

Step 3: (7 marks)
This step involves you identifying your own company, posting on your blog some
background information on your company and its industry, and commenting on other
people’s blogs.

Find your Firm’s Annual Report and Spreadsheet

Go to the list of companies on Moodle called ‘Find Your Company’. This will be available
in the top central panel in Moodle from 5.00pm Friday Week 1. For those not enrolled in
our unit by then (and we should, of course, be enrolled in our units no later than two
weeks before term starts), you will need to email me at m.turner@cqu.edu.au to be
allocated a company.
Find the company you have been given and click on its URL. This will take you to your
firm’s website, where you should be able to find your firm’s annual reports under the
Investors or Investor Relations section. This section might also be called Shareholders’
Information, Financial Information or something similar. For some companies, in the
‘Find Your Company’ list there is a comment in the Notes section to help you navigate
your firm’s website. Save a soft copy of the Annual Report for your firm for each of the
last three years. For example, if your firm’s latest Annual Report is for the year ended 30
June 2018, save your firm’s Annual Reports for 30 June 2018, 30 June 2017 and 30 June
2016.
Only save your firm’s Annual Reports. Do NOT save its interim or half-yearly reports;
also, do not save its concise annual reports. You can ignore these. Only save its full
Annual Reports (with its full financial statements) for each of the last three years. I also
suggest you have a look through your firm’s website. This will give you some initial
insights into your firm’s operations and activities.

Read Your Firm’s Annual Report: Identify Clearly What Your Firm Does
Carefully and thoughtfully read through your firm’s latest Annual Report. For example,
your firm’s latest Annual Report may be for the year ended 30 June 2018. While you do

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this, note down key concepts and questions (KCQs) that occur to you. Identify areas of
your firm’s financial statements you are having difficulty understanding, areas of its
business that seem most important or critical to you, key challenges the firm appears to
be facing, how successful it appears to be in meeting these challenges and its apparent
strategy. Some people’s companies may have very long annual reports. There is no need
to read every word (or page) of your Annual Report. Simply seek to gain an initial
familiarity with your firm and its latest Annual Report.
Discuss your KCQs with other people in the unit, for example with those at your own
location or online. What similarities or differences are there between your firm and the
firms of other people and how they present their financial statements? Are you happy
with the firm you have been given, or would you have preferred to be given a different
company? What concerns, if any, do you have at this stage?
For further guidance on how to write your key concepts and questions (KCQs) see the
video “How to Write KCQs”. You can also find this video in the Video section on the left-
hand side of Moodle.

Know Your Firm

Find useful news articles, blogs and videos about your firm, its industry and some of the
opportunities and challenges your firm is facing. Provide links to these resources on your
blog. Also, comment on some other students’ blogs about their firms. Martin Turner’s
(favourite?) company is Ryman Healthcare. Here are links to two videos produced by
groups of residents in two of Ryman Healthcare’s retirement villages. They are quite a bit
of fun: 80-odd Years of Happy and 80-odd Years of Disco. And they give some insights
into Ryman Healthcare’s business and customers. The first video, 80-odd Years of Happy,
has over 8.5 million views. There is also a great video on the launch of the myRyman
app; and another on the launch of a new staff uniform; and one on the work that went
into the design of the new uniform. What do these videos suggest about the culture
management are seeking to support at Ryman Healthcare?
Discuss with others, perhaps at your location or online, about what you have learnt
about each other’s firms. Also, discuss with others about how discussing with others
helped, or did not help, you to understand more about what your firm does and about
aspects of its business performance.
Getting to know what your firm does, its operations, an initial sense of what its strategy
might be and the markets and environment it is operating in is critical to the rest of your
ASS#1 and ASS#2. Do not ‘cut corners’ on this. Spend time to ‘get to know’ your firm.
Go to Studiosity. It is a great resource to support you in your learning in our unit. Click on
the Studiosity block on the left-hand side of Moodle. You will see there are two aspects
to the support from Studiosity:
 Connect live
 Writing feedback
Connect live is phone support, which is usually available from 5 pm to midnight on
Sunday to Friday (i.e. not on Saturday nights). During these hours, you can phone to
discuss any questions or issues you may be having with your study; as you have them

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in real-time. Writing feedback is 24/7 online support. You can submit draft work and ask
for feedback from one of the Writing Specialists. For example, this can help you further
develop your English writing and communication skills. You will receive a turnaround for
your requests of no more than 24 hours. You will have the opportunity to use Studiosity
as part of your assignments in our unit. You may have been using this service while
studying your previous units at CQUniversity.
When in Studiosity, click on Writing feedback and submit your draft KCQs and
information on your firm for this step. Comment on how you found the support you
gained from Studiosity on our unit Facebook page or in ASS#1 Step 3 Forum on Moodle
or through other online interactions (for example through your blog). Did you find the
support useful, or not? How did others find it?
Comment on other people’s blogs. Tell us which your favourite blog(s) are and why. Rate
your top three blogs (giving your opinions, supported with reasons and evidence).
Include links to your top three blogs. Also, comment on your favourite blogs in their
blogs and on the Blog Links forum in the Communication box, the top box on the right-
hand side of Moodle.

Please allow up to about 7 – 7½ hours to complete this step.

Step 4: (5 marks)
This step involves you inputting your company’s financial statements into your
spreadsheet.
You can find your company’s spreadsheet by clicking on ‘Company Spreadsheet’ in the
top centre section on Moodle.
Watch the video “Tips on Setting up your Spreadsheet”. You can also find it in the Video
section on the left-hand side of Moodle. In this video, we will look at how to set up your
spreadsheet for your firm, as we do this for Ryman Healthcare. This will show you what
you need to do to tailor the Company Spreadsheet to your firm. We will use the Financial
Statements, Restated Financial Statements and Ratios worksheets in our ASS#1. We will
use the Key Value Drivers and Valuation worksheets in our ASS#2.
Open your firm’s Financial Statements worksheet by clicking on the Financial Statements
tab in your company’s spreadsheet. You will find in this worksheet some space for you to
enter your firm’s Income statement (including a Statement of comprehensive income if
your firm has a separate Statement of comprehensive income) and Balance sheet.
Carefully enter in each of these statements for your firm for the past four years. You will
notice that your firm’s Annual Reports will each contain financial statements for two
years. So even though you have downloaded three years of Annual Reports, this will give
you four years of financial statements.
Check out the video “Entering and Restating Financial Statements” which gives you some
tips on how to enter your firm’s financial statements into your spreadsheet. This is also
available in the Video section on the left-hand side of Moodle. You only need to enter in
your firm’s Income statements (as well as Statements of comprehensive income) and
Balance sheets – you do not need to enter your firm’s Statement of changes in equity or
Statement of cash flows.

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Also, if you find difficulties in entering your firm’s financial statements into your Excel
spreadsheet, go to Studiosity. I gave details on how to do this above, under Step 3. When
in Studiosity, click on Connect live. Connect live is a real-time service, which is usually
available from 5 pm to midnight Sunday to Friday (i.e. not Saturday night). They will be
able to help you with specific questions you might have. You can also get great tips on
how to use Excel in the video Excel Crash Course. You can also find this video in the
Resources section on the left-hand side of Moodle.
Tip: Your firm’s financial statements may be called a range of different names,
such as Consolidated Statement of Financial Position (which is your firm’s
Balance sheet) and Consolidated Statement of Financial Performance (which
is your firm’s Income statement). You also may have a separate Income
statement and Statement of comprehensive income, or, alternatively, a single
Statement of comprehensive income.

Please allow up to about 3 – 3 ½ hours to complete this step.

Step 5: (13 marks)

This step involves you restating your firm’s financial statements.
Go to the ‘Restated Financial Statements’ tab in your firm’s spreadsheet. This is where
you will input your firm’s restated financial statements, once you have prepared them.
You will need to make sure you restate your firm’s financial statements for the most
recent four (4) years.
Restating your firm’s financial statements simply involves you reorganising the way your
firm’s financial statements are set out. This can also be called ‘recasting’ or
‘reformulating’ your firm’s financial statements. ‘Restating’ financial statements can
sometimes refer to adjusting the previous year of a firm’s financial statements in the way
some items are accounted for in the current year. We are not talking about this type of
‘restating’ a firm’s financial statements. Our task of restating our firm’s financial
statements involves moving around different items in a firm’s financial statements; and
to do this we will need to understand what each item is. This will help us look carefully at
each item in our firm’s financial statements and to develop some initial understanding
about what each item means to us. And it will prepare our financial statements to be
ready for us to analyse them and value our firm by clearly separating the operating and
financial activities of our firm.
Restate your firm’s financial statements based on material covered in Chapter 4 (Section
4.2) in the Study Guide. Check out these videos: “Entering and Restating Financial
Statements”, “Restating Your Firm’s Income Statement“ (running time 43 mins) and
“Restating Your Firm’s Balance Sheet“ (running time 30.5 mins). These videos are also
available in the Video section on the left-hand side of Moodle. These have some great
tips on how to restate your firm’s financial statements. You may see items in your firm’s
financial statements such as non-controlling interests; investments in associates; futures,
options, hedges or derivatives; deferred tax; or movements in foreign currency
translation reserves. When you first restated your firm’s financial statements in
ACCT11059 Accounting, Learning & Online Communication, you may have wondered

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what these items were and whether they related to your firm’s operating or financial
activities.
When restating your firm’s financial statements in our unit, you can see if you find it a lot
easier to restate your firm’s financial statements this time and whether you have a better
understanding of what these different items in your firm’s financial statements are from
your studies of accounting in your degree. I encourage you to discuss with other
students at your location or online any issues you (and they) may face in restating your
firm’s financial statements. Post on your blog your comments and responses to restating
your firm’s financial statements. How did you find this learning task? Did you find it
frustrating, confusing or enlightening? And what exactly do you feel you have learnt, or
not learnt, about your firm and its financial statements from restating its financial
statements?
Restating the financial statements of a firm can be quite time consuming and, at times, a
little frustrating, especially when you do it for the first time. However, ‘all’ you will be
doing when restating your firm’s financial statements will be moving around the various
items in your firm’s financial statements, for example moving your firm’s assets from
current assets and non-current assets to operating assets and financial assets. Still all the
same items; just thoughtfully put under different headings.
Include in your assignment (as a Word document) a brief commentary on any issues or
concerns you had in restating your firm’s financial statements and the results of your
discussions with other students. Comment on whether you found this task easier this
time compared to when you did it in ACCT11059 Accounting, Learning & Online
Communication. Also, submit your firm’s spreadsheet with your restated financial
statements included.
Please allow up to about 7 – 8 hours to complete this step.

Step 6: Due: 11.00am Monday, Week 4 (3 marks)

This step involves you writing down some of your ideas, reflections and reactions to
reading Chapter 4 ‘Understanding the Past’ in the Study Guide.
Read Chapter 4 (‘Understanding the Past’) in the Study Guide.
Read it like you would a novel or any book, actively seeking to engage with the
author and to understand what you are reading. What is the author trying to say? Let
the author take you on a journey: go with him and see what you think of some of the
key ideas and concepts being discussed.
And while you do this, note down key concepts that occur to you. That’s right; just
write them down as you go along. Also, include any questions that occur to you as
you are reading. What do you find confusing, difficult to understand or believe,
boring, exciting or surprising? Include some of your key concepts and questions
(KCQs) in a Word document.
For further guidance on how to write your key concepts and questions (KCQs) see the
video “How to Write KCQs”. You can also find this video in the Video box on the left-hand
side of Moodle.

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Your personal engagement with the reading is what we are interested in.
Please submit this step as a Word document.
Please allow up to about 3 – 3½ hours to complete this step (if you have English as
your second language, you may need to increase this time).

Step 7: (8 marks)
This step involves you calculating some ratios for your firm (and its economic profit).

Ratio Analysis
Go to the Ratios tab in your firm’s spreadsheet. In this worksheet is a list of ratios. Please
calculate these ratios for your firm. In the video “Tips on Calculating Ratios in your
Spreadsheet” we look at how to use our Excel spreadsheet to calculate ratios for our firm.
Calculate these ratios for the last four (4) years for your firm. Do this by linking back to the
numbers in your firm’s financial statements (in your Financial Statements worksheet) or to
the numbers in your firm’s restated financial statements (in your Restated Financial
Statements worksheet). If you are unsure about how to link cells between worksheets in
Excel, see this short video: Linking Data from Different Excel Sheets and Workbooks. You
can also discuss with others in the unit about how to do this.

Economic Profit
Calculate economic profit for your firm for the past four (4) years. You can use 8% as your
firm’s cost of capital (WACC) when calculating your firm’s economic profit (unless you have
reasons to use a different number; if so, clearly state those reasons).
Please allow up to about 3– 4 hours to complete this step.

Step 8: (3 marks)
This step involves you providing (and receiving) feedback to three other students in our
unit on their draft ASS#1.
The main benefit for you of Step 8 is in you giving quality and thoughtful feedback to
others in our unit. The process of thinking about the feedback you give to others will
help you greatly with your own assignment as you think about what the assignment
requires and how others have addressed these requirements for their own companies.
Prior to 5.00pm Saturday Week 5, please:
 post draft work of your ASS#1 on your blog;
 provide a link to your blog on the Draft ASS#1 Feedback Forum and post in the
Draft ASS#1 Feedback forum a comment that your draft ASS#1 is ready for
student feedback and, if you wish, specific areas where you would particularly
value feedback for your ASS#1.
Prior to 5.00pm Tuesday Week 6, please ensure you have provided quality feedback to
at least three other students, using the Peer Feedback Sheets for ASS#1 (see below).

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Include the feedback you have given to at least three other students in the unit in your
ASS#1. Also, include and/or comment on any feedback others may have given you on
your draft ASS#1. Also, comment in your ASS#1 whether you found feedback from other
students useful and why this was, or was not, the case. You can include in your
discussion both how useful (or not) you found feedback you received from other
students through your interactions with them at your location, through our blogs, our
Facebook page, Moodle forums, email or messaging.
Please allow up to about 2 – 2½ hours to complete this step.
Please submit your ASS#1 Steps 3-5 & 7-8 as a single Word document and your firm’s
Excel spreadsheet. Do not include your firm’s spreadsheet as a table in your Word
document. Instead, make sure you submit your firm’s spreadsheet as a separate Excel
file. That way we can investigate your spreadsheet’s cells.
Include in your Word document links to your blog and any other resources you wish to
include.
Note: You should submit your Step 1 by 11.00am Thursday Week 1 in ASS#1 Step 1 in
Moodle; submit you Step 2 by 11.00am Friday Week 2 in ASS#1 Step 2 in Moodle; and
submit you Step 6 by 11.00am Monday Week 4 in ASS#1 Step 2 in Moodle.
Note: Late penalties for all steps in ASS#1 (including Steps 1, 2 and 6) will be calculated
based on the due date for ASS#1 of 11.00am Monday Week 7.

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PEER FEEDBACK SHEET: ASS#1

Feedback From:

Feedback To: .

My Comments
Step 1
KCQs

Step 2
KCQs

Step 3
Background information on company
Comments/KCQs
Comments on other’s blogs

Step 4
Input company’s financial statements

Step 5
Restated Income statement
Restated Balance sheet
Commentary & discussion with others

Step 6
KCQs

Step 7
Calculation of ratios

Overall ASS#1

Note: Please use this sheet as a guide. There is no need to provide feedback on each step of ASS#1.
For example, someone may have little or no draft work completed for one or more of the steps
prior to asking for your feedback.

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Grades will be allocated to Assignment Stage 1 (ASS#1) as follows:

Mark
Step 1
KCQs 3
Step 2
KCQs 3

Step 3
Background information on company 3
Comments/KCQs 3
Comments on other’s blogs 1

Step 4
Input company’s financial statements 5
Step 5
Restated Income statement 6
Restated Balance sheet 4
Commentary & discussion with others 3
Step 6
KCQs 3
Step 7
Calculation of ratios 8

Step 8
Individual feedback with other students 3

TOTAL 45

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