The fact that the entity’s earnings will be materially different from market expectations.
Using the consolidated financial statements of Bellamy’s Australia Ltd, calculate comparing the 2015 and 2016 figures:
1.The percentage increase in Gross profit.
2.The percentage increase in net profit after tax.
3.Return on investment (assets) for 2015 & 16. (hint, use EBIT).
4.As a financial analyst, comment (two paragraphs) on the strength of the Consolidated Statement of Profit or Loss and Other Comprehensive Income for 2016.
5.As a financial analyst, comment (two paragraphs) on the strength of the Consolidated Statement of Financial Position for 2016.
6.As a financial analyst, comment (two paragraphs) on the strength of the Consolidated Statement of Cash Flows for 2016.
7.Based on your analysis, and BEFORE knowledge of the recent share price decline and share trading halt, would you have recommended to your clients to buy, hold or sell Bellamy’s shares? Why?
Read and analyse the three attached articles by:
Wang Xia and Wu Min. (2011). The quality of financial reporting in China: An examination from an accounting restatement perspective. China Journal of Accounting Research, Vol. 4. pp. 167-196.
Ghazali, N.A.M. (2010). The importance and usefulness of corporate annual reports in Malaysia. Gadjah Mada International Journal of Business, Vol. 12 No. 1, pp. 31-54.
Alzarouni, A., Aljifri, K., Ng, C and Tahir, M, I. (2011). The usefulness of corporate financial reports: Evidence from the United Arab Emirates. Accounting & Taxation, Vol. 3 No. 2, pp. 17-37.
And answer the following research question:
Annual reports are an outdated mode of informing users regarding the activities of a company.
Do you agree? Why or why not?