Financial Analysis


You are a graduate working for a reputable corporate advisor and your manager has called you into their office.• Your manager has asked you to prepare a brief that addresses non-statutory reporting by ASX listed companies (“Brief”). The Brief will be used in a meeting with Retail Food Group Limited (ASX:RFG) (“RFG”)• While speaking about the report, the following happens: you notice an article in the Australian Financial Review stating Collins Foods Limited (ASX:CKF) (“Collins”) reported underlying FY17 NPAT of A$34.3m. Given your manager’s request, you suggest that Collins be used as a case study for the Brief. Your manager agrees (“Non- statutory Reporting”) ?given you really want to impress your manager, you volunteer to provide details on the rationale and viability of Collins’ recent key business decisions and strategic direction (“Strategy”) ?finally, you volunteer to provide some financial analysis of Collins for reference in the meeting with RFG. Again, your manager cannot say no to your initiative. Your manager provides you with a partially completed set of Collins’ financials in Excel to use in your analysis and says “I wonder how Collins’ last two years compare to RFG? I’d be interested to see” (“Financial Analysis”) ?• You walk quickly back to your desk and immediately get to work??Brief Guidelines • Begin with an Executive Summary outlining your key findings• The Brief must have three (3) written sections: (1) Non-statutory Reporting –  explain the differences between Collins’ FY17 statutory and underlying NPAT [4 marks] ?-  provide the rationale for Collins’ management to provide non-GAAP earnings information, ?including whether analysts are likely to use this information or not [2 marks]-  provide brief arguments for and against communicating non-GAAP earnings information ?through financial reporting [3 marks] ?(2) Strategy –  clearly articulate and comment on Collins’ strategy over the past two (2) years (i.e. what have been the key drivers in profitability and growth over this period) [3 marks]-  provide a view on the sustainability of Collins’ current corporate strategy for 2018 [2 marks] ?(3) Financial Analysis ?-  comment on Collins’ profitability over the last two (2) years, making specific reference to outputs from the Excel spreadsheet. You should look to ‘measuring overall profitability’ for guidance [3 marks] You must follow these instructions or the Brief cannot be used at the RFG meeting:• Headings appropriate headings and sub-headings to organise the written material must be used ?• Referencingreferences to all applicable accounting standards (including specific paragraphs), citing relevant academic and practitioner articles and company disclosures where relevant ?References example:Source: AASB 133: Earnings per share Source: AASB 133, paras, [12], [33]• Presentation 12 sized Arial or Helvetica font, 1.5 line spacing, 2.5 cm margins on all sides ?• Word count – 1,500 word limit (excluding in-text references and bibliography). The word count must be stated at the beginning of the Brief – recommended breakdown based on marking guide: Executive Summary (150 words); Non- statutory Reporting (650 words); Strategy (400 words); Financial Analysis (300 words) ?The Brief Template1 Executive SummaryThis is my Individual Assignment. I have written it clearly and concisely. I have adopted structured headings and sub-headings to make my submission easier to follow…2 Headin(a) Sub-heading(b) Sub-heading
(c) Sub-heading3 Heading4 Bibliography• Author, BC et al 2017, This is a fictional book to remind you to list your bibliography in alphabetical order, 1st Fictional ed., Made Up Publishing Co., Crawley.• Palepu, KG et al 2015, Business analysis & valuation: using financial statements – texts & cases, 2nd Asia-Pacific ed., Cengage Learning, Melbourne.============