The Analysis of Financial Position and Performance of Nick Scali Limited and Fantastic Holdings Limited

Topics: Balance sheet, Generally Accepted Accounting Principles, Asset Pages: 3 (963 words) Published: April 16, 2012
The analysis of financial position and performance of Nick Scali Limited and Fantastic Holdings Limited during fiscal year 2010 and 2009 are summarized as the following: Horizontal Analysis
The horizontal analysis comparative income statements show a percentage change from doing operation of two companies are Nick Scali and Fantastic Holdings Limited. Gross profits of two companies are increased from year 2009 to 2010 by 34.28% and 5.90% respectively. It can be said that both company had increased in sales while sales of both company were increased by 24.33% for Nick Scali and increased by 4.23% for Fantastic. The increasing from sales has effect directly to cost of goods sold. Increased in sales mean that cost of goods sold also increased. In addition, not only cost of goods sold was increased when sales was increased but also for all of the expenditure in the company were increased as well. Although, the fantastic had profit from doing business but the expenses were sharply increased from year 2009. As a result profit after tax was slightly decreased by 0.35%. In contrast, Nick Scali had a huge amount increased in net profit by 133.65%. Interestingly there was no financial cost for Nick Scali in year 2010. It is mean that Nick Scali did not lend any money from bank in year 2010. Therefore, the financial cost was dropped to 0 or dropped by 100%. In the other hand, financial cost of Fantastic was increased by 6.6%.

When consider the horizontal analysis comparative balance sheets of both companies. Surprisingly, other financial assets of Nick Scali in year 2010 were $696,000 while year 2009 had only $1,000. Mean that it was rose up to 69,500%. In contrast, there was no change in intangible assets for Nick Scali while Fantastic had increased by 8.76%. A growth rate of both companies are increased. Nick Scali grew by 27.68% higher than Fantastic that it total asset grew by 14.89%. Cash and equivalent of Nick Scali rose up to 50.57% but for Fantastic had...
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