Write a report on “Analysing the financial performance and position of an accounting entity using appropriate ratios.”
REQUIREMENT
Pacific Green Industries (Fiji) is contemplating expanding its operation to Vanuatu. Assuming the role of an Accountant, write a report to the management or board of directors of Pacific Green Industries (Fiji) Limited (PGI) and assess its performance over the 6 years from 2017 to 2022 by calculating and analyzing the following ratios to consider the proposed expansion.
1. Analysing adequacy of cashflow- Chapter 11
a. Short-term cashflow adequacy ratio
b. Cashflow adequacy ratio
2. Profitability ratio – Chapters 6 & 13
a. Gross profit ratio
b. Profit margin ratio
c. Expenses to sales ratio
d. Inventory turnover
3. Management and control of Accounts Receivable – Chapter 12
a. Receivable turnover
b. Average collection period
4. Analysing liabilities for Decision making – Chapter 16
a. Liquidity ratios
i. Current ratio
ii. Quick ratio or acid test ratio
b. Financial stability ratios
i. Debt ratio
ii. Equity ratio
5. Analysing Property, Plant and Equipment – Chapter 14
a. Average percentage of useful life expired
b. Average useful life (in years)
c. Asset turnover (in number of times)
When compiling the report, each group must follow the following format:
• Title
• Table of Contents
• Executive Summary
• Introduction
• Body (This is where you calculate and analyze each of the ratios listed above)
• Conclusion
• Recommendations (based on the calculation of the ratios)
• Appendices
In addition, each group must refer to the report writing rubric when compiling your report.
Finally, since the assignment also tests teamwork, each group must attach their logbook in the appendices. Each group must design their own logbook (for example using a table format). The logbook must clearly state dates and details of all group meetings, whether virtual or face-to-face and the allocation of work in the compilation of the report.