Financial Analysis of Fletcher Building Limited (New Zealand) - Tasks 1 and 2

Assessment Instructions

Please make sure to read each and every line in this word document as it is very important because there are a lot of instructions written and lots of information which you can’t miss out in any situation and also do consider a lot of different colour shaded lines and Marking Rubric at the end. Assessment Instructions • Students are required to select a company from New Zealand and get approval from the lecturer. Once the company has approved, this company cannot be chosen by other students. First come, first served rules apply. • The Company which I choose is (Fletcher Building Limited) External Link to Fletcher Building limited Website https://fletcherbuilding.com/ • Make sure to read the marking rubric provided below to ensure that you have answered the questions according to the requirements of each task. Your mark will reflect how well you answered the questions. • The student has to select the company from the NZ Stock exchange (NZX). • You are expected to research a range of sources and reference these correctly. You must use your own words to report your findings. • Calculation which Will ultimately goes into Appendix  References Needed to Prove the points in this Assignment as too many topics needs to cover up and every section needs to have back up from references and most important thing not to forget (As I am always Mentioned to you guys) In-text Citations Assessment Tasks You are required to select a company (Fletcher Building Limited) listed on the New Zealand Stock Exchange (NZX) Use the annual reports of (Fletcher Building Limited) company and other academic sources to answer Tasks 1 and 2. Task One: Review the financial statements and accounting notes of (Fletcher Building Limited) company to answer the following: You are required to read and interpret the statement of financial position and statement of financial performance of (Fletcher Building Limited) company for the years 2018 and 2019. Copies of the financial statements must be attached in Appendix. In doing this you are required to interpret any three items in the Balance Sheet and any three items in the Income Statement. Note: [a] You need to show your understanding of the selected six items in the Balance Sheet and Income Statement. [b] You are required to read the notes to the financial statements that are relevant to the selected six items and interpret them. Your interpretation should show evidence of understanding. The lecturer may have an interview with you to ascertain your knowledge. [c] It is required to read other sources that provide information on (Fletcher Building Limited) company to be included in your interpretation. Task Two: The Managing Director of (Fletcher Building Limited) NZ Company has approached you to act as their financial advisor. He has asked you to critically analyse the financial statements of the (Fletcher Building Limited) company for three consecutive financial years 2017, 2018 & 2019. In doing this you should analyse the profitability, liquidity/financial stability and efficiency ratios of the (Fletcher Building Limited) company. The profitability section should include: • Growth in sales • Gross profit margin • Net profit margin Liquidity/financial stability should include • Current ratio • Quick ratio • gearing ratio Efficiency should include • Inventory turnover period • Average settlement period for accounts receivable • Average settlement period for Accounts payable Very Important Note: Your analysis should cover the following: [a] Trend analysis of the Company Progress between Year 2017,2018 and 2019 [b] Industry benchmarks analysis only for 2019 [c] Your evaluation of the financial situation of the (Fletcher Building Limited) Hint: Use 2016 financial information to calculate the averages. List of formulas: Growth in Sales = (current year sales – previous year sales) / previous year sales x 100 Gross Profit = GP / Sales x 100 Net Profit = Net profit after tax / Sales x 100 Inventory turnover period = (Average inventory / Cost of sales) x 365 Average settlement period for accounts receivable = (average accounts receivable / Credit sales revenue) x 365 Average settlement for accounts payable = (average accounts payable) / cost of sales) x 365 Current ratio = current assets / current liabilities Quick ratio = current assets excluding inventory and prepayments / current liabilities Gearing ratio = Long term liabilities / (share capital + reserves + long term liabilities) Company Name: Fletcher Building Limited (New Zealand) Check the NZX for more info on this Company Also, Look for more sources that could help make this report easy and conveniently....I am going to provide quite a lot of files to support you guys. Even I am adding all financial reports which will at least help you gathering data for calculation. Make sure to get the cost of sales and Gross profit which is kind of base of calculation.