How to Diversified and Expanded the Business?
The company chosen for analysis is JB Hi-Fi Private Limited which is a retail chain specially for gaming consoles and BLU Rays but diversified and expanded the business and now selling most of the electronic goods like fridges, LEDs, music CDs etc. Regardless to other peers of the industry who suffered losses in this market, JB was the only company to see a rise in its profits. For the JB Hi-Fi Private Limited there have been ups and downs in terms of their business management and change in management. In 2004, JB Hi-Fi Private Limited has take most aggressive management decision of acquiring or taking Queensland Clive Anthony chain of stores and operating business from there. Many brands have been registered under JB Hi-Fi Private Limited parent brand and have been operating business from different locations in Australia. Unique selling point of JB Hi-Fi Private Limited is always been its cheapest price range and vast range of products and services. It was listed in 2003 at Australian stock exchange. JB Hi-Fi Private Limited is one of the leading and most popular business organisations in home entertainment sector (Nethercott, 2010).
In this assignment we are going to look inside the types and the value of company’s intangible assets and the accounting method and acquisition method of the company. For the purpose of this report, financial analysis of the JB Hi-Fi Private Limited has been taken into account. For the purpose of financial analysis of JB Hi-Fi Private Limited’s financial statements 2016 is the financial year has been undertaken. In this report, financial analysis of JB Hi-Fi Private Limited mainly includes analysis of consolidated financial statements and information provided at the notes to accounts (Detzen, Wersborg & Züich, 2015). Comments have also been made on the revaluation of non-current assets. In this report, items of financial statements i.e. income statement, statement of financial position and cash flow statement has been analysed. Different aspects of disclosures and presentation of non-current assets of JB Hi-Fi Private Limited has been focused in this report. In this report, financial analysis of JB Hi-Fi Private Limited’s financial statements of the year 2016 has been undertaken. In this report, identification and analysis of any revaluation made by JB Hi-Fi Private Limited has been considered. Property, plant and equipment derecognized during the previous year 2016 have been included in this report (Suttle, 2015). Treatment of any gain or loss in the revolution and derecognised of property, plant and equipment in the financial statement of JB Hi-Fi Private Limited has been stated in his assignment. From the analysis of statement of financial position or balance of JB Hi-Fi Private Limited has been used for identifying intangible. Analysis and identification of accounting treatment of these intangible assets and any changes (in terms of revaluation) has been affected in this assignment. Treatment of acquisition of goodwill in the transactions of JB Hi-Fi Private Limited has been analysed and recorded in the financial statement of JB Hi-Fi Private Limited. In this report, analysis of revaluation of non-current assets of JB Hi-Fi Private Limited during 2016 has been undertaken (Petrovic, Manson & Coakley, 2016).
It can be concluded that JB Hi-Fi Private Limited has been preparing and presenting their financial transactions in adequate manner. Disclosures as required under the defined and applicable standards have been followed while presenting transactions in financial statements. It can be concluded that JB Hi-Fi Private Limited has derecognized their non-current assets i.e. property, plant and equipments during the previous year i.e. 2016. In can be concluded that there has been instance where JB Hi-Fi Private Limited has revalue their non-current fixed asset i.e. intangible assets during the 2016. It can be concluded that during the year 2016, non-current assets i.e. property, plant and equipment has been disposed and impaired during the previous year 2016. Same has been affected in the statement of financial position (balance sheet) and income statement (profit and loss account) during the 2016 (JB Hi-Fi Private Ltd Annual Report, 2016). On the other hand, it can be concluded that intangible assets of the JB Hi-Fi Private Limited has also been changed or value of intangible assets has been decreased increased because of exchange difference that JB Hi-Fi Private Limited has recognised during 2016 financial year. It can be concluded from the financial analysis of JB Hi-Fi Private Limited during 2016, that they has prepared and presented financial transactions according to financial reporting standards. Their financial position from the financial analysis reflects adequate level of business operations and effective management of non-current assets including intangible assets. It can be concluded that preconisation of profit and loss arise from revaluation and impairment test has been properly dealt in financial statements (Karanovic & Baresa, 2010)
Detzen, D., Wersborg, T., & Züich, H. (2015). Bleak Weather for Sun-Shine AG: A Case Study of Impairment of Assets. Issues in Accounting Education, vol 30, no 2, pp 113-126.
JB Hi-Fi Private Ltd Annual Report, 2016. JB Hi-Fi Private Ltd Annual Report, 2016. JB Hi-Fi Private Ltd, pp.6-60.
Karanovic, G., S, B. & Baresa, S., 2010. Financial Analysis Fundament for Assessment the Value of the Company. UTMS Journal of Economics, 1(1), pp.73-84.
Nethercott, L. (2010). Thin capitalisation and the impairment of assets. Tax Specialist, vol 13, no 4, pp 210-215.
Petrovic, N., Manson, S., & Coakley, J. (2016). Changes in Non?current Assets and in Property, Plant and Equipment and Future Stock Returns: The UK Evidence. Journal of Business Finance & Accounting, vol 43, no 10, pp 1142-1196.
Suttle, R., 2015. The Macroenvironmental Factors Affecting the Clothing Industry. [Online] Available at: https://smallbusiness.chron.com/macroenvironmental-factors-affecting-clothing-industry-37254.html [Accessed 14 May 2017].
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