Get Instant Help From 5000+ Experts For
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing:Proofread your work by experts and improve grade at Lowest cost

And Improve Your Grades
myassignmenthelp.com
loader
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!
Free Quote
wave

About Oatland Golf Club

Question:

Discuss about the Financial analysis for Oatland Golf Club and Wollongong Golf Club.

The report aims to do a financial analysis for Oatland Golf Club and Wollongong Golf Club. The important financial considerations for the discussion is able to include “Current ratio, Quick ratio, Accounts receivable turnover, Number of days’ sales in receivables, Debt to Equity ratio, Number of times interest charges are earned and Return on Assets”. Some of the other financial consideration is seen to include Return on Equity and Earnings per Share on common stock.

Oatland Golf Club situated in suburb of Sydney, in the state of New South Wales, Australia is affluent with the organizing a rewarding game. The Golf course also takes several initiatives to support the basic elements of golf including, the correct grip and getting along with the on-course play. The main program of the compansy is seen to commence from “Sunday 4th February 2018 till Sunday 25th March 2018”. The golf course is also able to include 8-week programme (8 x 45-minute sessions) which considers various aspects of the game (Oatlands Golf Club, 2018).


Wollongong Golf Club is situated between magnificent Illawarra Escarpment and beautiful Pacific Ocean. The golf club was established in 1897, a decade before electricity was introduced and club shares the honour for being one of the oldest in the country. The club offers wide range of selection of bars and function spaces. It offers AAA rated accommodation along with award winning service.  The true link of the company enjoys a round to indulge in the unique experience which is offered in Wollongong. The interpretation of the ratio analysis is done mainly on three aspects, namely liquidity, solvency and profitability ratio. Under the liquidity ratio, ratios such as current ratio, quick ratio, asset receivable turnover ratio and number of days sales in receivables has been calculated. Under solvency ratio total liabilities to total assets, interest coverage and debt equity ratio is calculated. The profitability ratio has included the analysis of net margin percentage, redone on assets and return on equity (Wollongonggolfclub.com.au, 2018).

 

2014

2015

2016

RATIO ANALYSIS

Liquidity

 

Current Ratio %

49%

63%

51%

Quick Ratio

$0.4

0.579300351

0.422362672

Accounts Receivable Turnover (times)

0.92

-0.82

Number of days’ sales in receivables

6.74

6.53

6.47

Solvency

 

Debt to Equity Ratio %

33%

36%

33%

Interest Cover (times)

0.25

0.15

-0.15

Total Liabilities/Total Assets

25.0%

26.3%

24.7%

Profitability

 

Net Margin %

1.33%

1.78%

-1.95%

ROA %

0.6%

0.9%

-1.0%

ROE %

1%

1%

-1%

  • Current ratio – The report has shown the computation of current ratio by dividing the current assets with current liabilities. The current ratio percentage of the company is discerned to be 49% in 2014, 63% in 2015 and 51% in 2016. This shows a reducing trend in the recent year for computation of current ratio. The decreasing nature of the current ratio shows that the company has considerable ability to pay short-term and long-term obligations (Andrijasevic & Pasic, 2014).
  • Quick ratio- The calculation of legal issues done by subtracting inventories from current assets and dividing it with current liabilities. The quick ratio is further depicted with a stagnant trend of 0.42 in 2014, 0.58 in 2015 and 0.42 in 2016. Short-term liquidity has not depicted any significant increase in performance in 2016. The decrease in the value of both quick ratio and current ratio is evident with the evaluation of the movement in the values of annual report which clearly shows that from 2014 to 2015 there was an increase in current assets by 40%, from 2015-16 the current assets got reduced by 20% (Evans & Mathur, 2014).
  • Accounts receivable turnover- This ratio has been used to measure the effectiveness of the firm in collecting debts and extending credit. Receivables turnover ratio has stated that in 2015, the company was able to efficiently utilize its assets and this is reflected with Accounts Receivable turnover ratio of 0.92 times. However, due to significant increase in the collection period in 2016, the ratio was discerned as -0.82. The calculation of receivables turnover ratio is done by dividing the net credit sales value by average accounts receivable. The main consideration of the calculation is done on annual basis (Lakshmi, Martin, & Venkatesan, 2016).
  • Number of days’ sales in receivables- The computation of DSR is seen with dividing the Accounts Receivable by average sales per day. The company has shown a decreasing and then increasing trend of number of days sales in receivable. This is evident with 6.74 days in 2014, 6.5 days in 2015 and 6.4 days in 2016. The decreasing trend of number of days since in receivables over time clearly shows that the company that the company is selling its product to customers on credit and taking significantly less time to collect money (Adedeji, 2014).
  • Debt to Equity ratio- The depiction of debt-to equity ratio is seen to be done with diving the total long-term borrowings by total capital. A deeper understanding of the debt equity ratio for Oatlands Golf Club has able to show that the company has significantly able to reduce its debt equity ratio which is a positive sign. The lowering value of the debt equity ratio indicates that that there is a less relation of proportion of shareholders' equity and debt used to finance a company's assets. The lowering value of debt equity ratio is evident with 0.33 in 2014, 0.35 in 2015 and 0.32 in 2016 (Islam, 2014).
  • Number of times interest charges are earned- The consideration for this ratio clearly shows how easily company is able to pay interest expenses on the outstanding debt. The consideration of Interest Cover (times) is seen with a decreasing trend. This is evident with 0.25 in 2014, 0.15 in 2015 and -0.15 in 2016. Due to a significantly low interest charges on in 2016, the golf club is burdened by debt expense over the time (Shah & Jan, 2014).
  • Return on Assets- Return on assets acts as the main indicator to illustrate the profit of the company in terms of total assets. In the given case, it is calculated by dividing the total earnings by total assets. Henceforth, it is not able to generate enough net income by total assets. As per the analysis of Oatlands Golf Course, the return on asset has first increased from 0.6% to 0.9% in 2015. However, the profit in terms of assets has reduced in 2016, which is evident with a return on asset ratio of -1% in 2016 (Grohmann, Kouwenberg, & Menkhoff, 2015).
  • Return on Equity- This is discerned as the amount of net income in terms of percentage of shareholders equity. ROE is discerned as corporation’s profitability by revealing based on the amount of profit company generates from the invested amount by the shareholders. The evaluation of this ratio is done by dividing net income by shareholders equity. Based on the given scenario Oatlands Golf Club has first depicted a stagnant and then a decreasing return on equity. This is evident with ROE of 1% in 2014 and 2015, followed with a decrease of 1% in 2016. The decreasing trend of ROA clearly suggests that company is not able to generate sufficient profit from the amount of investment made by the shareholder (Zainudin & Hashim, 2016).
 

2013

2014

2015

RATIO ANALYSIS

Liquidity

 

Current Ratio %

96%

88%

149%

Quick Ratio

0.913886446

0.869131091

1.470018555

Accounts Receivable Turnover (times)

-0.62

1.00

Number of days’ sales in receivables

7.65

7.53

6.86

Solvency

 

Debt to Equity Ratio %

12%

9%

5%

Interest Cover (times)

-0.23

-0.39

0.20

Total Liabilities/Total Assets

101.9%

108.2%

69.8%

Profitability

 

Net Margin %

-4.79%

-2.88%

3.63%

ROA %

-15.9%

-13.6%

20.4%

ROE %

-2%

-1%

2%

Current ratio – Wollongong Golf Club Limited is comparatively in a much better position in terms of current ratio than Oatlands Golf Club. It has sufficient current assets such as cash, accounts receivables, inventories and prepaid expenses to bear the short-term and long-term obligations. This is seen to be evident with a current ratio of 0.96 and 2013, 0.88 and 2014 and 1.48 and 2015. The increasing trend of current ratio clearly suggests that Wollongong Golf Club Limited will be able to meet all short-term capital requirement (Raki?evi?, Miloševi?, Petrovi?, & Radojevi?, 2016).

Quick ratio- Similar to the current ratio, the quick ratio of the company is depicted with an increasing trend. This is evident with a quick ratio of 0.91 and 2013, 0.87 in 2014 and 1.47 in 2015. The increasing nature of the quick ratio shows that Wollongong Golf Club Limited is experiencing a solid top line growth thereby converting the receivables into cash to meet the financial obligations. Based on such increasing growth rate of acid test ratio can be said that the golf club has a faster inventory turnover and cash conversion cycles (Richardson, Lanis, & Taylor, 2015).

About Wollongong Golf Club

Accounts receivable turnover- The interpretations as per Accounts Receivable turnover is also increasing in nature. This is evident with Accounts Receivable of -0.62 in 2014 which increased to 1 in 2016. The linear growth in this ratio shows that the golf club is efficient enough in collecting debts and extending credit (Xu et al., 2014).

Number of days’ sales in receivables-In this area also the company has made a significant improvement. Wollongong Golf Club, has reduced time taken to collect the money from customers after providing them the services on credit. The growth in Number of days’ sales in receivables is evident with 7.65 days in 2014 which further reduced down to 7.53 days in 2015 and 6 .86 days in 2016 (Omar, Koya, Sanusi, & Shafie, 2014).

Debt to Equity ratio- The debt equity ratio is expressed in terms of percentage and reducing trend of percentage over the years clearly states that the company is able to make a significant progress in reducing the reliance of shareholders' equity and debt for financing the assets of the company. In 2014, the debt-to-equity ratio of Wollongong Golf Club was 12%, which reduced to 9% in 2015 and 2016 it got reduced by 5%. This has been depicted with the reducing trend of long-term debt over the years, which is evident with long-term debt of $ 623972 in 2014, $ 327415 in 2015 and $ 40851 in 2016 (Normah et al., 2014).

Number of times interest charges are earned- The time taken to pay the interest amount on the outstanding debt has been considered with the increasing trend. This is evident with interest coverage ratio of -0.23 in 2014, -0.39 in 2015 and 0.20 in 2016 (Adewuyi, 2016).

Return on Assets- The illustrations as per this ratio clearly suggests that the company is able to generate enough net income in terms of total assets. The return on assets have increased from -15.9% in 2014 to -13.6% in 2015 and the significant rise in the growth was evident with 20.4% in 2016. This clearly shows that Wollongong Golf Club is in a stable position to generate income from the available assets (Hoberg & Maksimovic, 2015).

Return on Equity- The interpretations of this seen with corporation’s profitability by revealing based on the amount of profit company generates from the invested amount by the shareholders. The company’s profitability based on the invested amount by the shareholders is depicted to increase from -2% in 2014, -1% in 2015 and 2% in 2016 (Schoenmaker & Wierts, 2015).

Ratio Analysis of Oatland Golf Club and Wollongong Golf Club


Conclusion

The discussion on ratio analysis is able to suggest that Wollongong Golf Club is in a significantly better position despite of certain downtowns in 2014 and 2015. However, the improvement in areas such as cash and cash equivalents, reduced short-term borrowing and current maturities have significantly contributed to a better current ratio, quick ratio, accounts receivables ratio and number of days’ sales in receivables in 2016. The interpretations as per solvency ratio has also shown that the company’s debt to equity ratio is in a significantly better position over the years. Henceforth, despite of certain downtowns in 2014 and 2015, it has been able to recover its position by improving on overall financial management. The significant improvement is seen with reducing the overall operating expenses over the years. Oatlands Golf Club on the other hand, has been considered with the improving trend in 2014 and 2015 and a reducing trend in 2016.  The lowering value of the debt equity ratio indicates that that there is a less relation of proportion of shareholders' equity and debt used to finance a company's assets. The lowering value of debt equity ratio is evident with 0.33 in 2014, 0.35 in 2015 and 0.32 in 2016. In addition to this, Oatlands Golf Club is not able to generate enough net income by total assets. As per the analysis of Oatlands Golf Course, the return on asset has first increased from 0.6% to 0.9% in 2015. However, the profit in terms of assets has reduced in 2016, which is evident with a return on asset ratio of -1% in 2016. Wollongong Golf Club has sufficient current assets such as cash, accounts receivables, inventories and prepaid expenses to bear the short-term and long-term obligations. This is seen to be evident with a current ratio of 0.96 and 2013, 0.88 and 2014 and 1.48 and 2015. The increasing trend of current ratio clearly suggests that Wollongong Golf Club Limited will be able to meet all short-term capital requirement. Moreover, the interpretations as per Accounts Receivable turnover is also increasing in nature. This is evident with Accounts Receivable of -0.62 in 2014 which increased to 1 in 2016. The linear growth in this ratio shows that the golf club is efficient enough in collecting debts and extending credit. The increasing nature of the quick ratio shows that Wollongong Golf Club Limited is experiencing a solid top line growth thereby converting the receivables into cash to meet the financial obligations. Based on such increasing growth rate of acid test ratio can be said that the golf club has a faster inventory turnover and cash conversion cycles. These evaluations clearly depict that Wollongong Golf Club is in a much better position than Oatlands Golf Club.

Interpretation of Ratio Analysis

References

Adedeji, E. A. (2014). A Tool for Measuring Organization Performance using Ratio Analysis. Research Journal of Finance and Accounting, 5(19), 16–22.

Adewuyi, A. W. (2016). Ratio Analysis of Tesco Plc Financial Performance between 2010 and 2014 in Comparison to Both Sainsbury and Morrisons. Open Journal of Accounting, 5(July), 45–56. https://doi.org/10.4236/ojacct.2016.53006

Andrijasevic, M., & Pasic, V. (2014). a Blueprint of Ratio Analysis As Information Basis of Corporation Financial Management. Problems of Management in the 21st Century, 9(2), 117–123. Retrieved from https://ezproxy.library.capella.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=99552651&site=ehost-live&scope=site

Evans, J. R., & Mathur, A. (2014). Retailing and the period leading up to the Great Recession: a model and a 25-year financial ratio analysis of US retailing. International Review of Retail, Distribution and Consumer Research, 24(1), 30–58. https://doi.org/10.1080/09593969.2013.801360

"Get Started" & "Get Started Plus" - An introduction to the game of golf - Oatlands Golf Club. (2018). Oatlands Golf Club. Retrieved 13 February 2018, from https://www.oatlandsgolf.com.au/cms/golf/get-started-ogc/

Grohmann, A., Kouwenberg, R., & Menkhoff, L. (2015). Childhood roots of financial literacy. Journal of Economic Psychology, 51, 114–133. https://doi.org/10.1016/j.joep.2015.09.002

Hoberg, G., & Maksimovic, V. (2015). Redefining financial constraints: A text-based analysis. In Review of Financial Studies (Vol. 28, pp. 1312–1352). https://doi.org/10.1093/rfs/hhu089

Islam, M. A. (2014). An Analysis of the Financial Performance of National Bank Limited Using Financial Ratio. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport, 2(5), 121–129. https://doi.org/10.12691/jbe-2-5-3

Lakshmi, T. M., Martin, A., & Venkatesan, V. P. (2016). A Genetic Bankrupt Ratio Analysis Tool Using a Genetic Algorithm to Identify Influencing Financial Ratios. IEEE Transactions on Evolutionary Computation, 20(1), 38–51. https://doi.org/10.1109/TEVC.2015.2424313

Normah, O., Zuraidah, M. S., Amirah, J., & Intan Salwani, M. (2014). Predicting financial stress and earning management using ratio analysis. Advances in Natural and Applied Sciences, 8(8), 183–189. Retrieved from www.aensiweb.com/ANAS

Omar, N., Koya, R. K., Sanusi, Z. M., & Shafie, N. A. (2014). Financial Statement Fraud: A Case Examination Using Beneish Model and Ratio Analysis. International Journal of Trade, Economics and Finance, 5(2), 184–186. https://doi.org/10.7763/IJTEF.2014.V5.367

Our History. (2018). Wollongonggolfclub.com.au. Retrieved 13 February 2018, from https://www.wollongonggolfclub.com.au/about-us/our-history

Raki?evi?, A., Miloševi?, P., Petrovi?, B., & Radojevi?, D. G. (2016). DuPont financial ratio analysis using logical aggregation. In Advances in Intelligent Systems and Computing (Vol. 357, pp. 727–739). https://doi.org/10.1007/978-3-319-18416-6_57

Richardson, G., Lanis, R., & Taylor, G. (2015). Financial distress, outside directors and corporate tax aggressiveness spanning the global financial crisis: An empirical analysis. Journal of Banking and Finance, 52, 112–129. https://doi.org/10.1016/j.jbankfin.2014.11.013

Schoenmaker, D., & Wierts, P. (2015). Regulating the financial cycle: An integrated approach with a leverage ratio. Economics Letters, 136, 70–72. https://doi.org/10.1016/j.econlet.2015.08.020

Shah, S. Q., & Jan, R. (2014). Analysis of Financial Performance of Private Banks in Pakistan. Procedia - Social and Behavioral Sciences, 109, 1021–1025. https://doi.org/10.1016/j.sbspro.2013.12.583

Xu, W., Xiao, Z., Dang, X., Yang, D. L., & Yang, X. L. (2014). Financial ratio selection for business failure prediction using soft set theory. Knowledge-Based Systems, 63, 59–67. https://doi.org/10.1016/j.knosys.2014.03.007

Zainudin, E. F., & Hashim, H. A. (2016). Detecting fraudulent financial reporting using financial ratio. Journal of Financial Reporting and Accounting, 14(2), 266–278. https://doi.org/10.1108/JFRA-05-2015-0053

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2019). Financial Analysis Of Oatland And Wollongong Golf Club Essay.. Retrieved from https://myassignmenthelp.com/free-samples/financial-analysis-for-oatland-wollongong.

"Financial Analysis Of Oatland And Wollongong Golf Club Essay.." My Assignment Help, 2019, https://myassignmenthelp.com/free-samples/financial-analysis-for-oatland-wollongong.

My Assignment Help (2019) Financial Analysis Of Oatland And Wollongong Golf Club Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/financial-analysis-for-oatland-wollongong
[Accessed 12 June 2024].

My Assignment Help. 'Financial Analysis Of Oatland And Wollongong Golf Club Essay.' (My Assignment Help, 2019) <https://myassignmenthelp.com/free-samples/financial-analysis-for-oatland-wollongong> accessed 12 June 2024.

My Assignment Help. Financial Analysis Of Oatland And Wollongong Golf Club Essay. [Internet]. My Assignment Help. 2019 [cited 12 June 2024]. Available from: https://myassignmenthelp.com/free-samples/financial-analysis-for-oatland-wollongong.

Get instant help from 5000+ experts for
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing: Proofread your work by experts and improve grade at Lowest cost

loader
250 words
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Plagiarism checker
Verify originality of an essay
essay
Generate unique essays in a jiffy
Plagiarism checker
Cite sources with ease
support
Whatsapp
callback
sales
sales chat
Whatsapp
callback
sales chat
close