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Part 1- Introduction
The report contains the review of the balance sheet of CSR Ltd. which is a famous industrial company in Australia and also listed on the securities exchange of Australia. The report contains the analysis of the balance sheet figures for the years 2015 and 2016 and the comparison has been made. The ratios are also calculated which shows the current position of the company (CSR, 2016).
Part 2- Comparison of Financial statements
Review of balance sheet of CSR Ltd.
Change from previous year
Total current assets
785.7 $ million
704.9 $ million
Total noncurrent assets
1430.1 $ million
1414.4 $ million
Total current liabilities
488.8 $ million
466.3 $ million
Total noncurrent liabilities
898.6 $ million
913.3 $ million
Total stakeholder’s equity
1317.2 $ million
1206.0 $ million
(Financial-statement analysis, 2016).
Comments on the comparative financial condition of CSR Ltd
There is an increase in the current assets of the company in the year 2016 from 2015. Increase in the total current assets of CSR ltd is a good sign for the company as it gives protection to the company in case of need. This is generally the cash reserves of the company. There is an increase in the non- current assets of the company in the year 2016 from 2015 which shows that the company is in the good position than the last year and it has more property and assets than before financial-statement analysis, 2016.
The Total current liabilities are also increasing in the company from 466.3 $ million to 488.8 $ million from the year 2015 to 2016. The rising of debt is not a good sign for the company and total assets of the company should be more than current liabilities which means that company is able to pay its obligations. The Total non- current liabilities are decreasing for the company from 913.3 $ million to 898.6 $ million from the year 2015 to 2016, it means that the long term financial obligations of the company is falling and company is growing in terms of more assets and less liabilities. The total stakeholder’s equity of the company is increasing from 1206.0 $ billion to 1317.2 $ million which is generally favourable for the CSR Ltd.
Ratios for CSR Ltd to determine the company’s position
current assets/ current liabilities
704.9 $ million/ 466.3 $ million= 1.51
785.7 $ million/488.8 $ million= 1.60
Debt Equity Ratio
Total Debt/ Shareholders equity
1379.6 $ million/ 1206.0 $ million = 1.14
1387.4 $ million/ 1317.2 $ million = 1.05
Net profit margin Ratio
Net Profit/ Sales * 100
(146.70 $million/2023.4 $ million) * 100= 7.25%
(169.3 $ million/2298.8 $ million) * 100= 7.36%
(Marginean, et. al., 2015)
The current ratio determines the company’s liability to pay its liabilities. The current ration of 2015 is 1.51 and of 2016 is 1.60 which is greater than 2015. The current ratio below 1 is a warning sign for the companies and it should be equal to 1 as it is the ideal current ratio. The ration more than one could be the sign of the problems with working capital which should be managed by the company.
Debt equity ration depicts that how the company finance its growth. It shows how a company is financing its debt from its assets. The debt to equity ratio of 2016 is 1.05 while it was 1.14 in 2015. The ideal ratio is 1 where the creditors and investors are having equal share in the business and if it’s more than 1, it’s not good as creditors have more stake in that situation than the investors. The company’s debt to equity ratio is decreasing which is a good sign for CSR Ltd (Bujaki Durocher, 2012).
The profit margin ratio is the return on the sales of the company. The profit margin of CSR Ltd in 2016 is 7.36% while it was 7.25% in 2015; it shows that the net income of the company is increasing which is a good sign for the company.
The company is overall in good condition as its profits are increasing when compared to the previous year and its obligations are decreasing.
CSR. (2016). annual meetings and reports. Retrieved 09 07, 2016, from http://www.csr.com.au/investor-relations-and-news/annual-meetings-and-reports
Bujaki, M. & Durocher, S. 2012, "Industry Identification through Ratio Analysis", Accounting Perspectives, vol. 11, no. 4, pp. 315-322.
financial-statement analysis 2016, , 6th edn, Oxford University Press.
Marginean, R., Mihaltan, D.C. & Todea, N. 2015, "Structure Ratios of Profit and Loss Account – Source of Information for Performance Analysis", Procedia Economics and Finance, vol. 26, pp. 396-403.