GWA Report

Topics: Financial ratios, Financial ratio, Balance sheet Pages: 16 (2935 words) Published: September 20, 2014
GWA GROUP
Accounting Concept & Practices
Group Assignment

Student ID: 30121348 (Harbir Singh) , 30121761 (Aditi Bholla) , 30080954 (Tushar Rana) 2/3/2014

Abstract
The report describes the financial situation of GWA group over period of 2011-2912. In the underwritten report, various sections and aspects have been covered to bring a comprehensive meaning. The entire report includes sections of introduction, director`s report, calculation of financial ratios, assessment, recommendations and appendices. Introduction covers an overview about the company and director`s report covers certain facts and figures about the company whereas financial ratios have been calculated to ascertain the financial position and performance of the company in the years 2011 and 2012 and comparison has been made between those two years` figures as a part of assessment. At the end, recommendations have been given for the clients for taking investment decision about investing in GWA group limited. Therefore the whole report has been prepared to assist clients.

TABLE OF CONTENT

1.0 INTRODUCTION3
2.0 DIRECTOR’S REPORT4
3.0 RATIO ANALYSIS5
4.0 ASSESSMENT OF THE COMPANY7
5.0 RECOMMENDATION8
6.0 REFERENCE LIST10
7.0 Appendice 11

1.0 Introduction
GWA Group Limited is Australia’s leading supplier of building fixtures and fitting to households and commercial premises. The company presents different brands such as Caroma, Dorf, Fowler, Stylus, Radiant, Irwell, Dux, Brivis, and Australian lock, Gainsborough, Gliderol and API Locksmiths. They are also known as an exclusive Australian distributor of other brands including Hansa and KWC. (GWA Group Limited,2014) GWA Group Limited was listed on the Australian stock exchange on 20th May 1993, and comprised the business division of Caroma, sebel, Rover, T H Martin and poolrite. Anderson family was the owner of the business who privatised the former public company, GWA Limited, in1989. There has been few changes taking place into an organization such as selling of T H martin lit in 1996 , followed by the selling of Poolrite equipment pty ltd in 1999. ( Company History,2014) There has been significant changes which took place among the organization since the staring of the company till present period. GWA group ltd is one of the large organization which includes 1680 number of total employees at the period of 30th June 2013 with distribution and manufacturing facilities located across Australia and with branch offices in NZ too. Main business division for GWA Group includes there distinct business divisions including: GAW Bathrooms & Kitchen

GWA Heating & Cooling
GWA Door & Access system

GWA Australia provides different range of heating & cooling, Bathrooms & Kitchen and doors & access system. In October 2012, the division was expanded to include API Locksmiths which is an Australian supplier of security and access control. (Company profile,2014)

2.0Directors Report
Director’s report indicates some of the issues being faced by GWA on regular basis. Figures and reports show some of the significant issues which needs attention by internal and external parties. To begin with, comparison of sales revenue between 2011 & 2012 states that GWA is trending really negative side than the previous year. To be more accurate, sales revenue has decreased significantly by 6.1% over the one year period. Overall competition and extended expenditure of business expenses can be recognised as a reason of negative profit for the organization. Report also indicates the figures regarding to employee turnover which shows, organization use to inject more human power ( 2150 employees last year) than the current year (1788 employees). (GWA Annual Report,2014 p-28) Different segments of business financial record show...

References: Company history (2014) retrieved from http://www.gwagroup.com.au/who-we-are/company-history/ on 1st of febuary 2014.
Company profile (2014) retrieved from http://www.gwagroup.com.au/who-we-are/company-profile/
On 2nd Febuary 2014
GWA Group Limited (2014) retrieved from http://www.gwagroup.com.au/ on 1st of febuary 2014
GWA Annual report (2014) retrieved from http://www.gwagroup.com.au/investor-relations/annual-reports/ on 2nd febuary 2014
Houston J. Brigham E. (2011), ``Fundamentals of Financial Management``. Book.
Penman S. Nissim D. (2001) ``Ratio Analysis and Equity Valuation- from research to practice`.`
7.0 Calculation of Ratios of GWA limited – ( Appendice 1)
1. Current ratio = Current Assets/ Current liabilities
= 225736 / 95661 = 2.35 (2012)
= 270910 / 116747 = 2.32 (2011)
2
= 225736 - 91766 / 95661 = 1.40 (2012)
= 270910 – 104160 / 116747 = 1.42 (2011)
3. Inventory Turnover = Cost of Sales / Average inventory
= 384978 / 97963 = 3.92 (2012)
= 405344 / 104297.5 = 3.89 (2011)

[ Average inventory= 91766+104160 / 2 = 97963 (2012)
Average inventory= 104160+104435 / 2 = 104297.5 (2011) ]
= 39655 / 602128 = 6.58 % (2012) ,
= 63359 / 641574 = 9.88 % (2011)
5. Cash return on Sale = Net cash used by from operating activities / Net Sale
= 60499 / 602128 = 10.04% (2012)
= 88558 / 641574 = 13.80 % (2011)
6
= 217150 / 602128 = 36.06% (2012)
= 236230 / 641574 = 36.82% (2011)
Expenses = 93788+50719+13452+16226 = 174185 (2012)
Expenses = 85470+48718+2605+17418 = 154211 (2011)
= 174185 / 602128 = 28.92% (2012)
= 154211 / 641574 = 24.03 % (2011)
8. Asset turnover = Net Sale / Average asset
= 602128 / 781042 = 0.77 times (2012)
= 641574 / 813596.5 = 0.78 times (2011)
Average asset = 748321+813763/2 = 781042 (2012)
Average asset = 813763+ 813430./2 = 813596.5 (2011)
9
10. Return on Equity = Profit / average equity
= 39655 / 433489.5 = 9.15% (2012)
=63359 / 435542 = 14.54% (2011)
Average equity = 426984+439995 / 2 = 433489.5 (2012)
Average equity = 439995+ 431089 /2 = 435542 (2011)
11
= 39655 / 301662 = 13.15 (2012)
= 63359 / 301221 = 21.03 (2011)
12. Price earning Ratio = Market price per share / Earning per share
= 17.24 (2011)
= 21.10 (2012)
13
= 18 / 39655 = .045 % (2012)
= 18 / 63359 = .028 %(2011)
14. Debt to total asset ratio = Total Debt / Total assets
= 321337 / 748321 = 42.94% (2012)
= 373768 / 813763 = 45.93%(2011)
15
= 60499 / 347552.5 = 17.40% (2012)
= 88558 / 378054.5 = 23.42 % (2011)
Average total liabilities = 321337+373768 /2 = 347552.5 (2012)
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