In this part of the assignment you are to take the role of business analyst in reverse: identify companies by type and prepare appropriate financial statements. Shown below are extracts of the financial information of 5 companies and also 5 different business descriptions. You will be required to work backwards to match up the financial information with the business descriptions. Business Descriptions for the FIVE Companies Brief business descriptions for the five companies are shown in the following Table Company Descriptions A Thus is an airline company undertaking domestic and international flights and international destinations packages. B This company engages in the manufacture, marketing, and sale of non-alcoholic beverages worldwide. C This is an international property and infrastructure group company. D Health and care company, offering health insurance, medical subscription and other health and care funding products. The company also runs care homes, retirement villages, diagnostic centres, hospitals and dental clinics. E This company is in the hospitality industry and it manages, franchises, owns, and develops branded hotels, resorts, and residential and vacation ownership properties worldwide. Its portfolio currently consists of 508 properties in 15 countries. 3 | P a g e Extract of Accounts for the Five Companies (information has been indexed) Extract of Accounts CO 1 CO 2 CO 3 CO 4 CO 5 Indexed 2X16 2X16 2X16 2X16 2X16 Accounts Receivable (Net) 8.45% 20.10% 6.59% 3.56% 5.40% Cash and Cash equivalents 9.24% 4.17% 16.75% 2.68% 0.69% Current Assets - Other 7.83% 5.01% 3.54% 3.74% 0.73% Debt (short term) 3.77% 1.00% 1.50% 5.14% 5.49% Deferred Tax Liability 0.24% 0.45% 2.44% 4.10% 1.11% Intangibles 22.45% 7.77% 4.00% 24.23% 0.00% Inventory (Net) 1.01% 5.61% 1.19% 21.85% 10.00% Long Term Debt (Secured with Fixed Charge) 6.59% 13.57% 30.35% 29.85% 2.93% Long Term Inventory & Other Assets 11.27% 45.13% 3.90% 3.10% 1.85% Non-Controlling Interest 0.50% 0.05% 0.05% 0.00% 29.69% Notes Payable 0.62% 0.30% 0.00% 4.69% 6.75% Other Current Liabilities & Provisions 0.81% 2.29% 2.32% 18.10% 0.00% Other LT Investments 0.00% 6.86% 0.03% 0.00% 0.31% Prepayments 1.00% 0.00% 0.00% 0.00% 0.00% Property, Plant and Equipment (Net) 24.03% 3.17% 61.00% 35.96% 79.32% Provisions (Long Term) 18.80% 10.35% 2.00% 9.30% 5.59% Reserves 4.03% 37.05% -3.02% 1.99% 3.70% Retained Profits 0.00% 16.30% -6.98% -4.85% 9.01% Revenue in Advance (Long Term) 0.24% 0.26% 21.01% 11.40% 0.00% Share Capital - Ordinary Shares 42.29% 7.50% 27.97% 14.14% 1.05% Share Capital - Preference Shares 0.00% 0.00% 0.00% 0.00% 20.00% Shares in Other Companies 1.22% 1.18% 0.00% 0.00% 1.43% Short term Cash Investments 13.50% 1.00% 3.00% 4.88% 0.27% Tax Payable 1.20% 0.03% 0.31% 0.00% 7.36% Trade and other Accounts Payable 20.91% 10.85% 13.40% 6.14% 7.32% Unearned Revenue - Short Term 0.00% 0.00% 8.65% 0.00% 0.00% Supplementary Information Inventory - Finished Goods 1.01% 5.61% 1.19% 12.20% 10.00% Inventory - WIP 0.00% 0.00% 0.00% 2.65% 0.00% Inventory - Raw Materials 0.00% 0.00% 0.00% 7.00% 0.00% Total 1.01% 5.61% 1.19% 21.85% 10.00% 4 |Page
REQUIRED: 1. From the Extracts of the Financial Information above, your task is to: 1.1. Match the numbered balance sheets extracts (1-5), to the letter descriptions of the companies (A-E). That is, match the numbers to the letters. 1.2. Provide reasons for how you chose the match. In particular, what specific line items did you focus on and why? 2. Prepare appropriate statutory financial statements for any ONE of the companies on the list. Notes to Statements are not required, but may be included if deemed necessary. (It is suggested that you replace the percentage amounts with dollar amounts) 3. Discuss the following quote: “The disclosure of immaterial information reduces understandability of financial statements because immaterial information can obscure and detract from the useful information that is reported.”