James Hardie Industries produces fiber cement products. It has operations in Australia, Asia, the US, and Europe. The document discusses James Hardie's key accounting policies, management flexibility, disclosure strategy, potential questionable accounting, and financial press discussion. Specifically, it evaluates James Hardie's accounting for its asbestos-related liabilities, which are offset against contingent assets and adjusted each year based on actuarial estimates. The quality of disclosure is also assessed.
Financial Reporting James Hardie Group Assignment (1)Joshua C
The document provides a financial report and analysis of James Hardie Industries Limited (JHX). It includes:
1. An executive summary of JHX's activities in the building materials sector, annual revenue of $1.5B+, and the impact of its 2001 asbestos compensation liability.
2. Sections analyzing JHX's key accounting policies, management flexibility, disclosure and accounting strategies, and potential issues with numbers.
3. The accounting strategy aims to minimize tax through positions in Ireland and the US. The asbestos liability, a unique provision, is partially contingent but made legal through a complex funding agreement, and reduced on the balance sheet through adjustments.
Dabur Q4FY14 results in line with expectations by Motilal OswalIndiaNotes.com
Dabur’s 4QFY14 results were in-line with expectation on the back of continued robust volume growth of 9.2% in domestic FMCG business and 9.4% in the consolidated entity (est. 10%). Consolidated net sales grew 15.5% to Rs17.7b (est. Rs17.9b).
Merck announced its 2007 financial results, reporting:
1) Full-year non-GAAP EPS of $3.20 and fourth-quarter non-GAAP EPS of $0.80, excluding certain previously disclosed items.
2) Worldwide product revenue growth driven by drugs like Singulair, Januvia, Gardasil, and Varivax.
3) Reaffirmation of its 2008 non-GAAP EPS forecast range despite charges related to legal issues including a VIOXX settlement.
The document provides an analysis of Cipla Ltd's financial statements and ratios from 2007-2009.
[1] It includes a balance sheet overview showing that the company's total assets and equity increased over the period while investments declined. Current assets grew at an average rate of 24% while total liabilities increased at 24.5%.
[2] The profit and loss account overview found that total income and expenditure both increased at an average rate of over 20% each year. Operating profit rose 9.5% annually and net profit increased 7.32% on average.
[3] Financial analysis through horizontal and ratio analyses examined trends in key line items and ratios to evaluate the company's liquidity,
Analysis of financial statement of asianpaints ltdBrijin Jacob
- Asian Paints discloses its accounting policies in accordance with GAAP and presents its financial statements under the historical cost convention on an accrual basis.
- It uses the weighted average method to value inventories and recognizes revenue upon transferring ownership of goods to buyers. Interest income is recognized proportionately.
- Employee benefits include provident fund, gratuity, pension, and post-retirement medical benefits. Borrowing costs directly related to assets are capitalized while others are recognized as expenses.
20180620 sauc oppenheimer consumer conference widescreen finaldrhincorporated
This document provides an overview of Diversified Restaurant Holdings, Inc. (DRH) for investors attending the Oppenheimer 18th Annual Consumer Conference. It summarizes that DRH is a leading franchisee of Buffalo Wild Wings with 65 locations, and has a current market capitalization of $34 million. The document outlines DRH's business model, growth opportunities through increasing sales and profitability, and potential for shareholder returns through debt reduction, multiple expansion, and EBITDA growth.
The document discusses techniques for analyzing financial statements, including horizontal analysis, vertical analysis, and ratio analysis. It provides examples of applying horizontal analysis to compare line items on Home Depot's balance sheet and income statement from 2006 to 2007. Vertical analysis is also demonstrated by expressing line items as a percentage of total assets or total sales. Key points shown include current assets increasing 33.2% and cost of merchandise sold increasing 16.7% based on the horizontal analysis examples.
Daseke, Inc. held an acquisition conference call in September 2017 to discuss consolidating the flatbed and specialized logistics market. They have acquired four companies since May 2017, adding an estimated $218 million in revenue and $26 million in adjusted EBITDA. Daseke has $20 million in cash, a $70 million undrawn credit line, and $23.7 million available on a delayed draw term loan to fund further growth. They remain on track to achieve their 2017 pro forma adjusted EBITDA target of $140 million through continued acquisition execution.
Financial Reporting James Hardie Group Assignment (1)Joshua C
The document provides a financial report and analysis of James Hardie Industries Limited (JHX). It includes:
1. An executive summary of JHX's activities in the building materials sector, annual revenue of $1.5B+, and the impact of its 2001 asbestos compensation liability.
2. Sections analyzing JHX's key accounting policies, management flexibility, disclosure and accounting strategies, and potential issues with numbers.
3. The accounting strategy aims to minimize tax through positions in Ireland and the US. The asbestos liability, a unique provision, is partially contingent but made legal through a complex funding agreement, and reduced on the balance sheet through adjustments.
Dabur Q4FY14 results in line with expectations by Motilal OswalIndiaNotes.com
Dabur’s 4QFY14 results were in-line with expectation on the back of continued robust volume growth of 9.2% in domestic FMCG business and 9.4% in the consolidated entity (est. 10%). Consolidated net sales grew 15.5% to Rs17.7b (est. Rs17.9b).
Merck announced its 2007 financial results, reporting:
1) Full-year non-GAAP EPS of $3.20 and fourth-quarter non-GAAP EPS of $0.80, excluding certain previously disclosed items.
2) Worldwide product revenue growth driven by drugs like Singulair, Januvia, Gardasil, and Varivax.
3) Reaffirmation of its 2008 non-GAAP EPS forecast range despite charges related to legal issues including a VIOXX settlement.
The document provides an analysis of Cipla Ltd's financial statements and ratios from 2007-2009.
[1] It includes a balance sheet overview showing that the company's total assets and equity increased over the period while investments declined. Current assets grew at an average rate of 24% while total liabilities increased at 24.5%.
[2] The profit and loss account overview found that total income and expenditure both increased at an average rate of over 20% each year. Operating profit rose 9.5% annually and net profit increased 7.32% on average.
[3] Financial analysis through horizontal and ratio analyses examined trends in key line items and ratios to evaluate the company's liquidity,
Analysis of financial statement of asianpaints ltdBrijin Jacob
- Asian Paints discloses its accounting policies in accordance with GAAP and presents its financial statements under the historical cost convention on an accrual basis.
- It uses the weighted average method to value inventories and recognizes revenue upon transferring ownership of goods to buyers. Interest income is recognized proportionately.
- Employee benefits include provident fund, gratuity, pension, and post-retirement medical benefits. Borrowing costs directly related to assets are capitalized while others are recognized as expenses.
20180620 sauc oppenheimer consumer conference widescreen finaldrhincorporated
This document provides an overview of Diversified Restaurant Holdings, Inc. (DRH) for investors attending the Oppenheimer 18th Annual Consumer Conference. It summarizes that DRH is a leading franchisee of Buffalo Wild Wings with 65 locations, and has a current market capitalization of $34 million. The document outlines DRH's business model, growth opportunities through increasing sales and profitability, and potential for shareholder returns through debt reduction, multiple expansion, and EBITDA growth.
The document discusses techniques for analyzing financial statements, including horizontal analysis, vertical analysis, and ratio analysis. It provides examples of applying horizontal analysis to compare line items on Home Depot's balance sheet and income statement from 2006 to 2007. Vertical analysis is also demonstrated by expressing line items as a percentage of total assets or total sales. Key points shown include current assets increasing 33.2% and cost of merchandise sold increasing 16.7% based on the horizontal analysis examples.
Daseke, Inc. held an acquisition conference call in September 2017 to discuss consolidating the flatbed and specialized logistics market. They have acquired four companies since May 2017, adding an estimated $218 million in revenue and $26 million in adjusted EBITDA. Daseke has $20 million in cash, a $70 million undrawn credit line, and $23.7 million available on a delayed draw term loan to fund further growth. They remain on track to achieve their 2017 pro forma adjusted EBITDA target of $140 million through continued acquisition execution.
This Project deals with the comparative study of 2 companies listed in S&P 500 for their performance evaluation & ratio analysis for the 3 financial years.
The document analyzes and compares the financial ratios of Nestle and Unilever for 2010 and 2009. Some key highlights:
- Nestle had stronger liquidity ratios, with higher current, quick, and cash ratios compared to Unilever.
- Unilever saw decreases in total debt and long-term debt ratios from 2009 to 2010, while ratios were generally higher than Nestle.
- Inventory and receivables turnover ratios improved for both companies from 2009 to 2010, though Nestle ratios were weaker.
- Asset and profitability ratios like ROA, ROE, and profit margin were higher for Unilever in 2010 compared to 2009 and Nestle.
So in summary
The document summarizes Principal Financial Group's third quarter 2017 earnings results. Some key points:
- Operating earnings were $374 million and operating EPS was $1.28. Excluding significant variances, EPS increased 16% year-over-year to $1.42.
- Assets under management reached a record $656 billion, with $5 billion in net cash flows during the quarter.
- 88% of investment options were in the top two Morningstar quartiles over five years.
- The company continued returning capital to shareholders through dividends and share repurchases.
This particular project is based on ratio analysis of Coca-Cola International. I have analyzed two years financial performance of Coke i.e. from 2011 to 2012. I hope my this effort will help other interested students.
Nike is the largest seller of athletic footwear and apparel in the world. It designs, develops, and sells products under its own brand along with Jordan, Hurley, and Converse. In 2015, Nike had revenues of $33 billion and net income of $3.5 billion. While Nike faces challenges from increased competition and changing consumer spending habits, its strong brand recognition and endorsement deals with star athletes provide opportunities for continued growth.
The document provides an overview of The Principal Financial Group, a Fortune 500 company that offers retirement savings, investment, and insurance solutions. It discusses the company's non-GAAP financial measures and reconciliations, organizational structure with business segments, global presence across 18 countries, and 135 year history of experience in the financial services industry. Forward-looking statements and associated risks are also included.
- Daseke is the largest owner of flatbed and specialized equipment in North America and has executed a consolidation strategy that has driven 50% Adjusted EBITDA CAGR from 2009 to pro forma 2016 through acquisitions.
- Daseke's management team owns approximately 60% of the company and is on track to achieve its targets of $140 million in pro forma Adjusted EBITDA for 2017 and $200 million for 2019 through continued acquisition growth.
- Daseke has less than 1% market share of the large $133 billion open deck transportation and logistics market in North America, providing significant opportunity for further consolidation.
This document discusses various financial ratios used to evaluate a company's financial performance. It provides details of liquidity, leverage, asset management and profitability ratios calculated for ICL for 2016-2017. The document analyzes ICL's current ratio, quick ratio, debt-to-equity ratio, interest coverage ratio and other key financial ratios, comparing them to industry standards. It finds that most of ICL's ratios are weaker than standards, indicating risks to creditors and need for ICL to improve earnings.
This document provides an overview of financial statement analysis. It defines key financial statements like the income statement and balance sheet. It also explains the purpose of financial ratio analysis and identifies common ratios used to evaluate a firm's liquidity, financial leverage, coverage, activity, and profitability. Examples are provided to demonstrate calculating and comparing ratios for a company called Basket Wonders to industry averages. Trend analyses are also shown to identify areas where the company's performance differs from its industry over time.
The document summarizes Principal Financial Group's fourth quarter 2013 earnings call. It provides non-GAAP financial measures to help investors evaluate performance. All business segments saw increased revenue and earnings compared to fourth quarter 2012. Principal Global Investors saw strong performance fees while Principal International had favorable returns, offset by tax law changes. The company deployed over $480 million in 2013 through dividends, share repurchases, and acquisitions and expects $500-700 million in deployment in 2014.
This document provides financial ratios for State Bank of India for the years ending March 2008, March 2009, and March 2010. Some key ratios that declined over this period include the operating margin, which fell from 19.5% to 16.96% due to higher operating expenses, and the adjusted return on net worth, which declined sharply from 15.74% to -57.84% as profit growth did not keep pace with the increase in shareholders' funds. Liquidity and leverage ratios such as the current ratio and quick ratio improved slightly, while the total debt to equity ratio remained high, reflecting the bank's reliance on external borrowing.
The document discusses Principal Financial Group's use of non-GAAP financial measures to evaluate performance. It states that these measures are useful for investors to understand the company's normal operations, but are not a substitute for GAAP measures. The company provides reconciliations between non-GAAP and GAAP measures. Management also uses non-GAAP measures for goal setting and compensation.
This document provides an overview of financial statement analysis. It discusses the key financial statements, common analysis tools like ratios, and how to compare ratios internally and externally. Ratios can analyze a firm's liquidity, leverage, coverage, and activity. The document also includes examples of calculating and interpreting various ratios for a sample company called Basket Wonders.
The document discusses Principal Financial Group's use of non-GAAP financial measures in its financial reporting. It states that the company uses several non-GAAP measures that management believes are useful for investors to evaluate performance, but notes they are not a substitute for GAAP measures. The company provides reconciliations of non-GAAP measures to the most directly comparable GAAP measures. It also notes some operational measures used that do not qualify as non-GAAP financial measures.
The document discusses Principal Financial Group's use of non-GAAP financial measures to evaluate performance. It states that these measures are useful for investors to understand the company's normal operations, but are not a substitute for GAAP measures. The company provides reconciliations between non-GAAP and GAAP measures. Management also uses non-GAAP measures for goal setting and compensation. Certain operational measures like assets under management are not considered non-GAAP financial measures.
The document analyzes the financial performance of ELB Company between 2017 and 2018. It finds that while revenue and some asset values increased, costs also rose leading to a decline in net profit. A ratio analysis shows the company's liquidity remains adequate but expenses need reducing to improve profits. It recommends the company lower administrative costs, debt financing, and production expenses to boost performance.
Fourth Quarter and Year End 2014 Financial Results Investor CallSquareTwoFinancial
The company reported financial results for year-end 2014, with consolidated ERP of $655 million and adjusted EBITDA of $198 million. Returns in 2014 were lower than previous years due to competitive market conditions. However, actively managed portfolios maintained strength, with initial 12-month returns reflecting conservatism. Purchases in Q4 2014 totaled $29 million according to the company's long-term investment strategy of diversification.
The document analyzes the financial performance of ELB Company between 2017 and 2018. It found that while revenue increased 18.3% from $28.9 million to $34.2 million, net profit declined slightly from $3.5 million to $3.26 million due to rising costs of goods sold and expenses. Specifically, administrative costs rose $1.82 million and finance costs increased $0.07 million. Overall assets and equity increased, though current assets declined as receivables fell $0.9 million and cash dropped $0.12 million. The document recommends ELB reduce borrowing, minimize expenses, and change operational strategies to boost profits.
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This Tutorial contains Excel File which can be used for any change in values
Week 5 Final Exam
CPA Question 01
CPA Question 02
The document summarizes Celanese's 2Q 2008 earnings conference call. It includes an agenda with the Chairman and CEO and SVP and CFO scheduled to speak. It also provides forward-looking statements, non-GAAP financial measure definitions, and notes the results are unaudited. Key highlights are record net sales for the quarter driven by higher pricing and volumes in Asia, but lower operating profit and EPS due to higher raw material costs, and a plan to achieve growth objectives by 2010 through volume growth in advanced materials and consumer/industrial specialties.
Here are the key points about the relationships between financial decisions, return, risk, and firm value from the perspective of the balance sheet:
- Financial decisions like capital structure, dividend policy, working capital management, and capital budgeting impact the composition and risk level of assets and liabilities on the balance sheet.
- Taking on more debt increases financial risk but may increase returns if the debt is used to fund profitable projects. This tradeoff affects firm value.
- Maintaining an optimal level of working capital reduces risk of operational disruptions but ties up funds that could be invested elsewhere. There is a balance.
- Investing in capital projects with sufficient expected returns that justify the risk can increase future cash flows and firm value
- WestRock reported financial results for Q4 FY17 and provided guidance for Q1 FY18.
- For Q4 FY17, adjusted earnings per share were $0.87 and adjusted free cash flow was $271 million.
- Guidance for Q1 FY18 expects impacts such as $30-35 million negative impact from price/mix/pulp and volumes and $35 million negative impact from maintenance downtime and group insurance benefits, resulting in anticipated sequential declines in earnings per share.
This Project deals with the comparative study of 2 companies listed in S&P 500 for their performance evaluation & ratio analysis for the 3 financial years.
The document analyzes and compares the financial ratios of Nestle and Unilever for 2010 and 2009. Some key highlights:
- Nestle had stronger liquidity ratios, with higher current, quick, and cash ratios compared to Unilever.
- Unilever saw decreases in total debt and long-term debt ratios from 2009 to 2010, while ratios were generally higher than Nestle.
- Inventory and receivables turnover ratios improved for both companies from 2009 to 2010, though Nestle ratios were weaker.
- Asset and profitability ratios like ROA, ROE, and profit margin were higher for Unilever in 2010 compared to 2009 and Nestle.
So in summary
The document summarizes Principal Financial Group's third quarter 2017 earnings results. Some key points:
- Operating earnings were $374 million and operating EPS was $1.28. Excluding significant variances, EPS increased 16% year-over-year to $1.42.
- Assets under management reached a record $656 billion, with $5 billion in net cash flows during the quarter.
- 88% of investment options were in the top two Morningstar quartiles over five years.
- The company continued returning capital to shareholders through dividends and share repurchases.
This particular project is based on ratio analysis of Coca-Cola International. I have analyzed two years financial performance of Coke i.e. from 2011 to 2012. I hope my this effort will help other interested students.
Nike is the largest seller of athletic footwear and apparel in the world. It designs, develops, and sells products under its own brand along with Jordan, Hurley, and Converse. In 2015, Nike had revenues of $33 billion and net income of $3.5 billion. While Nike faces challenges from increased competition and changing consumer spending habits, its strong brand recognition and endorsement deals with star athletes provide opportunities for continued growth.
The document provides an overview of The Principal Financial Group, a Fortune 500 company that offers retirement savings, investment, and insurance solutions. It discusses the company's non-GAAP financial measures and reconciliations, organizational structure with business segments, global presence across 18 countries, and 135 year history of experience in the financial services industry. Forward-looking statements and associated risks are also included.
- Daseke is the largest owner of flatbed and specialized equipment in North America and has executed a consolidation strategy that has driven 50% Adjusted EBITDA CAGR from 2009 to pro forma 2016 through acquisitions.
- Daseke's management team owns approximately 60% of the company and is on track to achieve its targets of $140 million in pro forma Adjusted EBITDA for 2017 and $200 million for 2019 through continued acquisition growth.
- Daseke has less than 1% market share of the large $133 billion open deck transportation and logistics market in North America, providing significant opportunity for further consolidation.
This document discusses various financial ratios used to evaluate a company's financial performance. It provides details of liquidity, leverage, asset management and profitability ratios calculated for ICL for 2016-2017. The document analyzes ICL's current ratio, quick ratio, debt-to-equity ratio, interest coverage ratio and other key financial ratios, comparing them to industry standards. It finds that most of ICL's ratios are weaker than standards, indicating risks to creditors and need for ICL to improve earnings.
This document provides an overview of financial statement analysis. It defines key financial statements like the income statement and balance sheet. It also explains the purpose of financial ratio analysis and identifies common ratios used to evaluate a firm's liquidity, financial leverage, coverage, activity, and profitability. Examples are provided to demonstrate calculating and comparing ratios for a company called Basket Wonders to industry averages. Trend analyses are also shown to identify areas where the company's performance differs from its industry over time.
The document summarizes Principal Financial Group's fourth quarter 2013 earnings call. It provides non-GAAP financial measures to help investors evaluate performance. All business segments saw increased revenue and earnings compared to fourth quarter 2012. Principal Global Investors saw strong performance fees while Principal International had favorable returns, offset by tax law changes. The company deployed over $480 million in 2013 through dividends, share repurchases, and acquisitions and expects $500-700 million in deployment in 2014.
This document provides financial ratios for State Bank of India for the years ending March 2008, March 2009, and March 2010. Some key ratios that declined over this period include the operating margin, which fell from 19.5% to 16.96% due to higher operating expenses, and the adjusted return on net worth, which declined sharply from 15.74% to -57.84% as profit growth did not keep pace with the increase in shareholders' funds. Liquidity and leverage ratios such as the current ratio and quick ratio improved slightly, while the total debt to equity ratio remained high, reflecting the bank's reliance on external borrowing.
The document discusses Principal Financial Group's use of non-GAAP financial measures to evaluate performance. It states that these measures are useful for investors to understand the company's normal operations, but are not a substitute for GAAP measures. The company provides reconciliations between non-GAAP and GAAP measures. Management also uses non-GAAP measures for goal setting and compensation.
This document provides an overview of financial statement analysis. It discusses the key financial statements, common analysis tools like ratios, and how to compare ratios internally and externally. Ratios can analyze a firm's liquidity, leverage, coverage, and activity. The document also includes examples of calculating and interpreting various ratios for a sample company called Basket Wonders.
The document discusses Principal Financial Group's use of non-GAAP financial measures in its financial reporting. It states that the company uses several non-GAAP measures that management believes are useful for investors to evaluate performance, but notes they are not a substitute for GAAP measures. The company provides reconciliations of non-GAAP measures to the most directly comparable GAAP measures. It also notes some operational measures used that do not qualify as non-GAAP financial measures.
The document discusses Principal Financial Group's use of non-GAAP financial measures to evaluate performance. It states that these measures are useful for investors to understand the company's normal operations, but are not a substitute for GAAP measures. The company provides reconciliations between non-GAAP and GAAP measures. Management also uses non-GAAP measures for goal setting and compensation. Certain operational measures like assets under management are not considered non-GAAP financial measures.
The document analyzes the financial performance of ELB Company between 2017 and 2018. It finds that while revenue and some asset values increased, costs also rose leading to a decline in net profit. A ratio analysis shows the company's liquidity remains adequate but expenses need reducing to improve profits. It recommends the company lower administrative costs, debt financing, and production expenses to boost performance.
Fourth Quarter and Year End 2014 Financial Results Investor CallSquareTwoFinancial
The company reported financial results for year-end 2014, with consolidated ERP of $655 million and adjusted EBITDA of $198 million. Returns in 2014 were lower than previous years due to competitive market conditions. However, actively managed portfolios maintained strength, with initial 12-month returns reflecting conservatism. Purchases in Q4 2014 totaled $29 million according to the company's long-term investment strategy of diversification.
The document analyzes the financial performance of ELB Company between 2017 and 2018. It found that while revenue increased 18.3% from $28.9 million to $34.2 million, net profit declined slightly from $3.5 million to $3.26 million due to rising costs of goods sold and expenses. Specifically, administrative costs rose $1.82 million and finance costs increased $0.07 million. Overall assets and equity increased, though current assets declined as receivables fell $0.9 million and cash dropped $0.12 million. The document recommends ELB reduce borrowing, minimize expenses, and change operational strategies to boost profits.
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This Tutorial contains Excel File which can be used for any change in values
Week 5 Final Exam
CPA Question 01
CPA Question 02
The document summarizes Celanese's 2Q 2008 earnings conference call. It includes an agenda with the Chairman and CEO and SVP and CFO scheduled to speak. It also provides forward-looking statements, non-GAAP financial measure definitions, and notes the results are unaudited. Key highlights are record net sales for the quarter driven by higher pricing and volumes in Asia, but lower operating profit and EPS due to higher raw material costs, and a plan to achieve growth objectives by 2010 through volume growth in advanced materials and consumer/industrial specialties.
Here are the key points about the relationships between financial decisions, return, risk, and firm value from the perspective of the balance sheet:
- Financial decisions like capital structure, dividend policy, working capital management, and capital budgeting impact the composition and risk level of assets and liabilities on the balance sheet.
- Taking on more debt increases financial risk but may increase returns if the debt is used to fund profitable projects. This tradeoff affects firm value.
- Maintaining an optimal level of working capital reduces risk of operational disruptions but ties up funds that could be invested elsewhere. There is a balance.
- Investing in capital projects with sufficient expected returns that justify the risk can increase future cash flows and firm value
- WestRock reported financial results for Q4 FY17 and provided guidance for Q1 FY18.
- For Q4 FY17, adjusted earnings per share were $0.87 and adjusted free cash flow was $271 million.
- Guidance for Q1 FY18 expects impacts such as $30-35 million negative impact from price/mix/pulp and volumes and $35 million negative impact from maintenance downtime and group insurance benefits, resulting in anticipated sequential declines in earnings per share.
This document provides an overview of Owens Corning for investors attending an event in August 2017. It discusses Owens Corning's three business segments: Insulation, Roofing, and Composites. It highlights how portfolio improvements over the last several years have lifted margins and returns. Free cash flow has also significantly improved. Owens Corning has a disciplined capital allocation strategy and strong cash flow outlook. The Insulation and Roofing businesses each provide details on market positions, historical performance, and growth opportunities.
Running head NAYBROSTRAND COMPANY1NAYBROSTRAND COMPANY 3.docxcharisellington63520
Running head: NAYBROSTRAND COMPANY 1
NAYBROSTRAND COMPANY 3
Naybrostrand Company
Name
Course Title
Institution
Date
Financial accounting is an important discipline in management of financial resources of an organization not to mention that it is a statutory requirement for organizations because it forms basis for determining statutory deductions such as taxes (Pinson, 2001). Various financial statements go into management of financial resources of an organization. Income statement is one such financial statement, which is useful in calculation of the profitability of an organization. It entails having the revenues for a given accounting period matched against the cost of goods sold in the same period to arrive at the gross profit realized in that period. The gross profit is then matched against the operating expenses for a given period to arrive at the profit before tax after, which tax is deducted to arrive at net income (Pinson, 2001).
It important to realize that, for matching principle to be followed strictly, some adjustments have to be done to the various accounts to ensure that they match with the period they are meant to represent. Failure to do the adjustment will defeat the very purpose of matching principle and accrual accounting. In the case of Naybrostrand, the first income statement was prepared without adjustment for sales, which were not purchased and therefore the net income had been overstated. Below is a new income statement where the adjustments for the sales had been done on the cost of goods sold (deduction of $42,500) this has led to higher gross profit and net income as well (Dupuis & Canada, 2004).
Naybrostrand income statement for the year ended
31st dec, 2012
Amount ($) amount ($)
Revenues 586,000
Cost of goods sold 264,500
Gross profit 321,500
Operating expenses
Depreciation expense 24,350
Insurance 1,400
Marketing 4,500
Rent 28,000
Salaries 78,500
Utilities 6,700
Total expenses 143,450
Profit before tax 178,050
Property taxes 16900
Net income/profit 161150
From the very outset, it is unrealistic to expect the income (notice that the accounts are in profit) to compare with the original income statement. It was important and material to adjust the accounts for the 42500 sales, which never materialized. This in return brought the cost of goods sold down and subsequently the gross profit and the net profit came up. Therefore, the earnings for the organization went up (Dupuis & Canada, 2004).
The accrual basis of accounting advocates that revenues and expenses be recognized in the accounting period when they are earned irrespective of whether cash is received or not. On the other hand, cash basis accounting advocates that revenues and expenses be recognized when cash is received or paid. The matching principle entails having the expenses and revenues being put in the same period they oc.
A brief introduction to Greenfield Seitz Capital Management. GSCM - Yancey Seitz & Stuart Greenfield - have managed global equity portfolios for family offices and institutional investors since 1983.
Advance Corporate Finance Lecture no 2 week 2YasserKhan52
This chapter discusses financial statements and cash flows. It covers key topics like the balance sheet, income statement, taxes, net working capital, and calculating a firm's cash flow. The balance sheet provides a snapshot of a firm's accounting value, with assets equal to liabilities plus equity. The income statement measures financial performance over time as revenue minus expenses. Understanding the difference between accounting income and actual cash flow is also important. The chapter provides examples of various financial statements and outlines how to analyze the information in them.
1. The document discusses accounting principles and concepts from Accounting Principles, 7th Edition. It covers generally accepted accounting principles, the conceptual framework developed by the Financial Accounting Standards Board, objectives of financial reporting, qualitative characteristics of accounting information, and key assumptions and principles used in accounting.
2. The conceptual framework consists of objectives of financial reporting, qualitative characteristics of useful information, elements of financial statements, and operating guidelines including assumptions, principles, and constraints. The primary objective of financial reporting is to provide decision-useful information to investors and creditors.
3. Qualitative characteristics that make information useful include relevance, reliability, comparability, consistency, and understandability. Key principles discussed include revenue recognition using the percentage
This document provides an overview of key differences between Indian GAAP and US GAAP. It defines GAAP as the common set of accounting principles, standards and procedures used to compile financial statements. Some major differences discussed include underlying assumptions, financial statement presentation formats, treatment of investments, consolidation of subsidiaries, accounting for foreign currency transactions, and accounting for expenses such as depreciation, pre-operating expenses, and employee benefits. The document also explains some accounting concepts and terms referenced in discussing the differences between Indian and US GAAP.
This document contains the financial statements and audit report for Rye Select Broad Market XL Portfolio Limited for the year ended December 31, 2007. It includes the statement of assets and liabilities, schedule of investments, statement of operations, statement of changes in net assets, statement of cash flows, and notes to the financial statements. The independent auditors' report indicates that the financial statements were audited in accordance with accounting standards and present fairly the financial position of the company.
This document provides the financial statements for Rye Select Broad Market XL Portfolio Limited for the year ended December 31, 2007. It includes an independent auditors' report, statement of assets and liabilities, schedule of investments, statement of operations, statement of changes in net assets, statement of cash flows, and notes to the financial statements. The portfolio held swap contracts on US markets representing 11% of net assets with a total unrealized appreciation of $30 million. Net assets increased over the year from $131 million to $287 million primarily due to share issuances and appreciation in the value of the swap contracts.
This document provides an overview of financial statement analysis. It discusses the key financial statements - the balance sheet, income statement, and statement of cash flows. It also outlines various analytical tools used in financial statement analysis, including ratios, common-size statements, trend analysis, and comparisons to industry benchmarks. Specific examples are provided of balance sheet ratios, income statement ratios, and activity ratios calculated for a sample company, and comparisons of these ratios to industry averages are analyzed.
- Owens Corning presented at an investor event on February 22, 2017 to discuss its Q1 2017 performance and outlook.
- The presentation highlighted Owens Corning's focus on shareholder value and discussed its three strong business segments: Insulation, Roofing, and Composites.
- Owens Corning has improved its portfolio and financial profile through cost reductions, acquisitions, investing in premium products, and improving capital efficiency. This has increased margins, return on capital, and free cash flow.
- ADP reported earnings for its 4th quarter and full fiscal year 2018, with total revenues increasing 8% year-over-year to $12.4 billion.
- For fiscal 2019, ADP expects total revenue growth of 5-7% and adjusted diluted EPS growth of 13-15% over the prior year pro forma result of $4.53 per share.
- ADP will continue investing in growth areas like global payroll cards, contingent workforce solutions, and cloud-based HCM, while aiming to expand adjusted EBIT margins by 100-125 basis points for the year.
Masonite reported financial results for the second quarter of 2014, with increases in key metrics compared to the same period last year. Net sales were up 8.2% to $490.2 million driven by a 5.5% increase in average unit price and 5.3% higher door volume in North America. Adjusted EBITDA rose 31.6% to $44.1 million and margins expanded 160 basis points to 9.0%, the highest margin in 5 years. However, production issues following an explosion at Masonite Africa's mill are expected to negatively impact Adjusted EBITDA there by $6-7 million in the third quarter. Liquidity remains strong with $324.7 million in available
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2. James Hardie Industries Limited
Lecturer: Stephen Lim
Group members:
Shaun R. Stewart 12064681
Luke Rowles 10742029
Joshua Chhay 10276374
Xin Xiao 11870957
Raed Al-Bader 11669761
MD Feisul Kahir 11070226
3. Table of Content
• Introduction of James Hardie’s Activities,Strategies and Market Segment
• Key accounting policies of James Hardie
• Evaluate the flexibility management
• Evaluation of Accounting strategy employed
• Evaluate the quality of the disclosure
• Potential questionable accounting numbers
• Undo Accounting Distortions
• Financial press discussion
• Conclusion
4. 1.Company’s activities and strategies
• James Hardie Industries Public Limited
Company operates in the
construction and building materials
sector
• Founded in Melbourne, Australia in
1888 the company is now
incorporated in Ireland, however it is
listed on the ASX with stock code JHX
• Core to the strategy of James Hardie
has been to invest in high-return
organic growth with a focusing on
capacity expansion across the US
and Australian businesses
5. Market Segment
• Key profit driver: Manufacturing and
distributing fibre cement products
throughout Australia ,the Asian
Pacific region, the USA and Europe
• Competitive advantage:
Development of its research
capabilities to develop
differentiated, unique and superior
products.
9. 4. Disclosure Strategy
DOCUMENT DETAIL
Amended & Restated Final Funding Agreement
This agreement is intended to ensure “JHISE Group's
commercial viability and success will provide the
basis for the long term funding of the claims which
are to be subject to those funding arrangements”
Valuation of Asbestos-Related Disease Liabilities of
former James Hardie entities (“the Liable Entities”) to
be met by the AICF Trust Prepared for Asbestos
Injuries Compensation Fund Limited (“AICFL”):
This actuarial estimation of the Asbestos Liability is
the detailed basis for the liability appearing on
balance sheet.
Asbestos Injuries Compensation Fund Limited
(“AICFL”) Statutory Financial Statements
The annual report for the Asbestos compensation
fund, which also forms part of the JHX consolidated
annual report. JHX is required to pay annually 35% of
Free Cash Flow as defined by the agreement as “net
cash provided by operating activities (as calculated
in accordance with US GAAP, paid to the AICF.
10. Management Remuneration Policy
STI
20%
Individual Performance Plan (STI): 1 -3 year performance targets set internally via matrix
dependent upon business stream
80%
Company Performance Plan: 1 -3 year performance targets set internally via matrix with
industry peer comparison.
Revenue Growth
EBIT (indexed to housing starts) excluding asbestos, asset impairments, ASIC expenses and
New Zealand product liability.
Above the 75th percentile (top 25%) of peer group performance in Revenue and
Profitability.
LTI
40%
Return on Capital Employed (ROCE) RSUs – an indicator of growth in the value of the
Company’s capital efficiency over time;
30%
Relative Total Shareholder Return (TSR) RSUs – an indicator of the Company’s performance relative to its US
peers; Above the 75th percentile (top 25%) of peer group performance in Revenue and
Profitability.
30%
Internal Individual Scorecard LTI – an indicator of each senior executive’s contribution to
the Company achieving its long-term strategic goals.
11. Accounting Strategy
The AFFA allows a framework to partial quantification. The combined liability is
forecast annually by external KPMG Actuaries for a central estimate, then NPV
adjustments are disclosed for:
• Inflation (discounted for future inflation)
• Discounted (return on funds in escrow and operations owed but not yet paid)
• Net of anticipated Insurance Recoveries
The impact of such adjustments reduces the liability by almost half in 2014 from Gross
Amount $3,132m to $1,870m.
(US $billions) 2012 2013 2014
Central Estimate
$1.58 $1.69 $1.87
Management
Adopted Estimate
$1.66 $1.69 $1.71
12. Asbestos Offset Asset
ITEM INCOME TAX RECEIVABLE & INSURANCE RECEIVABLE
DESCRIPTION
The Tax Receivable estimate is clearly a theoretical asset dependent upon
future positive income.
Under US GAAP Tax Receivables are allowed to be recognised in full and
revalued over time.
Insurance Receivable is Audited under terms of the AFFA as it was seen as a
measure which could be manipulated to reduce the cash outflow to ACIF due
to a clause in the AFFA in which JHX must maintain capital acceptable to
undertake its business.
STRATEGY
Valuation of these items is not documented or implied in the notes to the
accounts as these items are complex to estimate due to their contingent
relationship with the Asbestos Liability estimate which itself is fraught with
complex assumptions regarding timing and value.
OUTCOME
These items offset the large Asbestos Liability held on balance sheet improving
the Equity Ratio and Current Ratio.
13. Asbestos Expense
ITEM ASBESTOS ADJUSTMENTS
DESCRIPTION
Actuarial estimates of the Asbestos liability are reassessed each year and
changes in the liability estimate are expensed each year.
STRATEGY
1. The Asbestos Liability is re-estimated annually by KPMG Actuaries.
2. The company uses the ‘Asset and Liability method’ to assess deferred
Tax Assets and Liabilities allowing the accrual of Tax Assets
OUTCOME
1. Increases in the Actuarial Estimate of Asbestos Liability are expensed
each year.
2. This decreases Net Profit creating a Tax Shield, and regularly
originates a deferred Tax Asset to offset against Tax Expenses in
current and future trading years.
14. 5. Quality of the Disclosure
Financial Information
• All relevant statements have been provided.
• Prepared in accordance with US GAAP. Management is required
to make assumptions that affect the amount of assets and
liabilities.
• The assets, liabilities, revenues and expense are stated in US Dollar.
Non-Financial information
• All related reports have been provided including the auditor’s
report by Ernst & Young.
15. 5. Quality of the Disclosure
Other Information
• Operation scope
• Production
• Asbestos Injuries Compensation.
Supplementary Material
• Amended & Restated Final Funding Agreement (AFFA).
• Valuation of Asbestos-Related Disease Liabilities of former James Hardie
entities.
• AICF Annual Financial Statements
16. 6.Potential Questionable Accounting
Numbers
1. Management discretion presenting the Asbestos Liability
2. US GAAP requirements when recognising provisions are comparatively more aggressive
when compared to IFRS when realising a provision:
- The realisation must have 75% or greater probability –(IFRS uses a 50% probability)
- Amount of loss can be reasonably estimated
- Use best estimate, or Lowest Range – (IFRS requires a Mid-Range if no best estimate)
3. The Asbestos liability is offset against related assets Insurance Receivable and Unrealized
Tax Assets that are heavily contingent on the liability itself and other future events such as
Net Profit and Compensation Claims.
(US $billions) 2012 2013 2014 Assumptions
Central Estimate by
Actuary
$1.5
8
$1.6
9
$1.87
Inflated
Discounted
Post-Insurance
Recovery
Management
Adopted Estimate
$1.6
6
$1.6
9
$1.71
Uninflated
Undiscounted
Pre-Insurance
Recovery
17. 7. Undoing Distortions
The inclusion of such adjustments reduces the liability by almost
half in 2014 from Gross Amount $3,132m to $1,870m.
CURRENT ASBESTOS ASSETS 109.1 CURRENT ASBESTOS LIABILITIES 185.8 CORRECTION
Restricted Cash & Equivalents -
Asbestos
60.2 Current Portion of Long Term Debt-
Asbestos
47.0 47.0
Restricted Short Term Investments -
Asbestos
0.1 Asbestos Liability 134.5 134.5
Insurance Receivable - Asbestos 28.0 Workers Compensation - Asbestos 4.3 4.3
Workers Compensation - Asbestos 4.3
Deferred Income Taxes - Asbestos 16.5
NON-CURRENT ASBESTOS ASSETS 700.9 NON - CURRENT ASBESTOS
LIABILITIES
1,619.3
Insurance Receivable - Asbestos 198.1 Asbestos Liability 1,571.7 2,950.5
Workers Compensation - Asbestos 47.6 Workers Compensation - Asbestos 47.6 47.6
Deferred Income Taxes 455.2
TOTAL ASBESTOS ASSETS 810.0 TOTAL ASBESTOS LIABILITIES 1,805.1 3,183.9
NET ASBESTOS LIABILITIES 995.1 2,373.9
18. 7. Undoing Distortions
P&L $,000 CORRECTION
Net Sales 1,493.8 1,493.8
COGS -987.4 -987.4
GROSS PROFIT 506.4 506.4
General Admin Expenses -224.4 -224.4
Research Expenses -33.1 -33.1
Asset impairments -
Asbestos Adjustments -195.8 0
Net Interest -1.1 -1.1
Other Income 2.6 2.6
Income before Taxes 54.6 250.4
Income Tax Benefit 44.9 0*
Net Profit 99.5 250.4
*Tax benefit treatment incalculable due to non-disclosure in the financials
19. 8.Financial Press Discussion
Binsted (2015a) in the Sydney Morning Herald highlights the
11% rise in third-quarter adjusted profit to $US48.6m, even in
light of an underwhelming United States housing recovery.
Binsted (2015b) in a further article in the Sydney Morning
Herald illustrates that taxpayers may need to cover any
asbestos related payouts if contributions from James Hardie
were insufficient to cover claims.
Towards the end of 2014 there was much discussion around
James Hardie’s tax minimisation efforts, with Aston (2014)
highlighting in the Sydney Morning Herald that James Hardie
has “paid an average of $0 in corporate tax over the past
decade”.