Item ACF ADBRI Limited Balance Sheet 7,238,511.00 Balance Sheet Cash 94,000,000.00 Receivables 17,947,686.00 191,100,000.00 Prepaid Expenses Inventories 1,182,467.00 9,600,000.00 5,577,745.00 152,100,000.00 Investments 0.00 0.00 NCA Held Sale 72,854.00 0.00 Other 239,747.00 5,700,000.00 Total Current Assets 32,259,010.00 452,500,000.00 Receivables 0.00 45,600,000.00 Inventories 0.00 0.00 Investments 0.00 197,800,000.00 1,141,800,000.00 ৪,600,000.00 PP&E 108,432,088.00 Intangibles(EXGW) 0.00 Goodwill 7,428,704.00 272,500,000.00 Future Tax Benefit t 0.00 0.00 Other 99,411.00 4,100,000.00 Total NCA 115,960,203.00 1.670,400,000.00 Total Assets 148,219,213.00 2,122,900,000.00 Account Payable 19,727,810.00 172,000,000.00 Short-Term Debt 9,401,859.00 3,900,000.00 Provisions 4,686,028.00 37,700,000.00 NCL Held Sale 67,317.00 0.00 Other 350,000.00 7,700,000.00 Total Curr. Liabilities 34,233,014.00 221,300,000.00 Account Payable 3,331,309.00 0.00 NLong-Term Debt 46,566,911.00 550,900,000.00 Provisions 5,792,745.00 128,700,000.00 Other 0.00 0.00 Total NCL 55,690,965.00 679,600,000.00 Total Liabilities 89,923,979.00 900,900,000.00 Share Capital 45,674,176.00 740,100,000.00 Reserves 914,264.00 (6,200,000.00) Retained Eamings Other Equity Convertible Equity 11,706,794.00 485,800,000.00 0.00 0.00 0.00 0.00 SE Held Sale 0.00 0.00 Outside Equity 2,300,000.00 Total Equity 58,295,234.00 1,222,000,000.00 Required (Show the workings/ calculations): (a) Using the financial information provided above, calculate each of the following financial ratios for ACF and ABC (Use closing balance to calculate and round up numbers to 2 decimal places 0.xx or x%). FY 2020 ACF ABC Return on Equity (ROE) Net Profit Margin Asset Turnover Capital Structure Leverage (b) Using the financial information provided above, prepare a common-size income statemen for both companies (Use closing balance to calculate and round up numbers to 2 decimal place: 0.xx or x%). (c) Decompose ROE using the traditional approach. What drives the difference in ROE between ACF and ABC? (d) Comment on ACF and ABC's EBITDA margin and Operating expense/Sales ratios. How did strategic decisions made by these companies affect these ratios?
Item ACF ADBRI Limited Balance Sheet 7,238,511.00 Balance Sheet Cash 94,000,000.00 Receivables 17,947,686.00 191,100,000.00 Prepaid Expenses Inventories 1,182,467.00 9,600,000.00 5,577,745.00 152,100,000.00 Investments 0.00 0.00 NCA Held Sale 72,854.00 0.00 Other 239,747.00 5,700,000.00 Total Current Assets 32,259,010.00 452,500,000.00 Receivables 0.00 45,600,000.00 Inventories 0.00 0.00 Investments 0.00 197,800,000.00 1,141,800,000.00 ৪,600,000.00 PP&E 108,432,088.00 Intangibles(EXGW) 0.00 Goodwill 7,428,704.00 272,500,000.00 Future Tax Benefit t 0.00 0.00 Other 99,411.00 4,100,000.00 Total NCA 115,960,203.00 1.670,400,000.00 Total Assets 148,219,213.00 2,122,900,000.00 Account Payable 19,727,810.00 172,000,000.00 Short-Term Debt 9,401,859.00 3,900,000.00 Provisions 4,686,028.00 37,700,000.00 NCL Held Sale 67,317.00 0.00 Other 350,000.00 7,700,000.00 Total Curr. Liabilities 34,233,014.00 221,300,000.00 Account Payable 3,331,309.00 0.00 NLong-Term Debt 46,566,911.00 550,900,000.00 Provisions 5,792,745.00 128,700,000.00 Other 0.00 0.00 Total NCL 55,690,965.00 679,600,000.00 Total Liabilities 89,923,979.00 900,900,000.00 Share Capital 45,674,176.00 740,100,000.00 Reserves 914,264.00 (6,200,000.00) Retained Eamings Other Equity Convertible Equity 11,706,794.00 485,800,000.00 0.00 0.00 0.00 0.00 SE Held Sale 0.00 0.00 Outside Equity 2,300,000.00 Total Equity 58,295,234.00 1,222,000,000.00 Required (Show the workings/ calculations): (a) Using the financial information provided above, calculate each of the following financial ratios for ACF and ABC (Use closing balance to calculate and round up numbers to 2 decimal places 0.xx or x%). FY 2020 ACF ABC Return on Equity (ROE) Net Profit Margin Asset Turnover Capital Structure Leverage (b) Using the financial information provided above, prepare a common-size income statemen for both companies (Use closing balance to calculate and round up numbers to 2 decimal place: 0.xx or x%). (c) Decompose ROE using the traditional approach. What drives the difference in ROE between ACF and ABC? (d) Comment on ACF and ABC's EBITDA margin and Operating expense/Sales ratios. How did strategic decisions made by these companies affect these ratios?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Item
ACF
ADBRI Limited
Balance Sheet
Balance Sheet
Cash
7,238,511.00
94,000,000.00
Receivables
17,947,686.00
191,100,000.00
Prepaid Expenses
1,182,467.00
9,600,000.00
Inventories
5,577,745.00
152,100,000.00
Investments
0.00
0.00
NCA Held Sale
72,854.00
0.00
Other
239,747.00
5,700,000.00
Total Current Assets
32,259,010.00
452,500,000.00
Receivables
0.00
45,600,000.00
Inventories
0.00
0.00
Investments
0.00
197,800,000.00
PP&E
108,432,088.00
1,141,800,000.00
Intangibles(EXGW)
0.00
৪,600,000.00
Goodwill
7,428,704.00
272,500,000.00
Future Tax Benefit
0.00
0.00
Other
99,411.00
4,100,000.00
Total NCA
115,960,203.00
1,670,400,000.00
Total Assets
148,219,213.00
2,122,900,000.00
Account Payable
19,727,810.00
172,000,000.00
Short-Term Debt
9,401,859.00
3,900,000.00
Provisions
4,686,028.00
37,700,000.00
NCL Held Sale
67,317.00
0.00
Other
350,000.00
7,700,000.00
Total Curr. Liabilities
34,233,014.00
221,300,000.00
Account Payable
NLong-Term Debt
3,331,309.00
0.00
46,566,911.00
550,900,000.00
Provisions
5,792,745.00
128,700,000.00
Other
0.00
0.00
Total NCL
55,690,965.00
679,600,000.00
Total Liabilities
89,923,979.00
900,900,000.00
Share Capital
45,674,176.00
740,100,000.00
Reserves
914,264.00
(6,200,000.00)
Retained Earnings
Other Equity
Convertible Equity
11,706,794.00
485,800,000.00
0.00
0.00
0.00
0.00
SE Held Sale
0.00
0.00
Outside Equity
2,300,000.00
Total Equity
58,295,234.00
1,222,000,000.00
Required (Show the workings/ calculations):
(a) Using the financial information provided above, calculate each of the following
financial ratios for ACF and ABC (Use closing balance to calculate and round u
numbers to 2 decimal places 0.xx or x%).
FY 2020
ACF
ABC
Return on Equity (ROE)
Net Profit Margin
Asset Turnover
Capital Structure Leverage
(b) Using the financial information provided above, prepare a common-size income statemen
for both companies (Use closing balance to calculate and round up numbers to 2 decimal place:
0.xx or x%).
(c) Decompose ROE using the traditional approach. What drives the difference in ROE
between ACF and ABC?
(d) Comment on ACF and ABC's EBITDA margin and Operating expense/Sales ratios.
How did strategic decisions made by these companies affect these ratios?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc91eb436-6202-4368-9458-806984f92c1b%2F561a2f05-26ee-4006-a152-62cb878d053d%2Fgtx8uud_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Item
ACF
ADBRI Limited
Balance Sheet
Balance Sheet
Cash
7,238,511.00
94,000,000.00
Receivables
17,947,686.00
191,100,000.00
Prepaid Expenses
1,182,467.00
9,600,000.00
Inventories
5,577,745.00
152,100,000.00
Investments
0.00
0.00
NCA Held Sale
72,854.00
0.00
Other
239,747.00
5,700,000.00
Total Current Assets
32,259,010.00
452,500,000.00
Receivables
0.00
45,600,000.00
Inventories
0.00
0.00
Investments
0.00
197,800,000.00
PP&E
108,432,088.00
1,141,800,000.00
Intangibles(EXGW)
0.00
৪,600,000.00
Goodwill
7,428,704.00
272,500,000.00
Future Tax Benefit
0.00
0.00
Other
99,411.00
4,100,000.00
Total NCA
115,960,203.00
1,670,400,000.00
Total Assets
148,219,213.00
2,122,900,000.00
Account Payable
19,727,810.00
172,000,000.00
Short-Term Debt
9,401,859.00
3,900,000.00
Provisions
4,686,028.00
37,700,000.00
NCL Held Sale
67,317.00
0.00
Other
350,000.00
7,700,000.00
Total Curr. Liabilities
34,233,014.00
221,300,000.00
Account Payable
NLong-Term Debt
3,331,309.00
0.00
46,566,911.00
550,900,000.00
Provisions
5,792,745.00
128,700,000.00
Other
0.00
0.00
Total NCL
55,690,965.00
679,600,000.00
Total Liabilities
89,923,979.00
900,900,000.00
Share Capital
45,674,176.00
740,100,000.00
Reserves
914,264.00
(6,200,000.00)
Retained Earnings
Other Equity
Convertible Equity
11,706,794.00
485,800,000.00
0.00
0.00
0.00
0.00
SE Held Sale
0.00
0.00
Outside Equity
2,300,000.00
Total Equity
58,295,234.00
1,222,000,000.00
Required (Show the workings/ calculations):
(a) Using the financial information provided above, calculate each of the following
financial ratios for ACF and ABC (Use closing balance to calculate and round u
numbers to 2 decimal places 0.xx or x%).
FY 2020
ACF
ABC
Return on Equity (ROE)
Net Profit Margin
Asset Turnover
Capital Structure Leverage
(b) Using the financial information provided above, prepare a common-size income statemen
for both companies (Use closing balance to calculate and round up numbers to 2 decimal place:
0.xx or x%).
(c) Decompose ROE using the traditional approach. What drives the difference in ROE
between ACF and ABC?
(d) Comment on ACF and ABC's EBITDA margin and Operating expense/Sales ratios.
How did strategic decisions made by these companies affect these ratios?
![ADBRI Limited (ABC, formerly Adelaide Brighton Limited) is an integrated construction
material and lime producing group of companies focused on the construction, engineering,
infrastructure and resource sectors in Australia. ABC has three main operating divisions being:
Cement, Lime, Concrete and Aggregates and Concrete Masonry Products.
Acrow (ACF, formerly NMG Corporation Limited) operates in the Australian construction
services industry, hiring formwork, falsework and scaffolding equipment and undertaking sales
of formwork and scaffolding related consumables. The Formwork operation involves the
supply of the temporary mould that supports concrete structures in their construction. The
Scaffolding operation supplies scaffolding equipment and access solutions to builders and
building contractors when working at heights.
Below are extracts of ACF and ABC Limited's income statements and balance sheets for 2020.
Item
ACF
ABC Limited
Income Statement
Income Statement
Operating Revenue
81,681,600.00
1,453,600,000.00
Other Revenue
2,196,471.00
4,100,000.00
Total Revenue Excluding Interest
Operating Expenses
83,878,071.00
1,457,700,000.00
(61,463,784.00)
(1,188,100,000.00)
269,600,000.00
EBITDA
22,414,287.00
Depreciation
(9,639,607.00)
(91,200,000.00)
Amortisation
0.00
(2,200,000.00)
(93,400,000.00)
Depreciation and Amortisation
(9,639,607.00)
EBIT
12,774,680.00
176,200,000.00
Interest Revenue
37,211.00
2,200,000.00
Interest Expense
Net Interest Expense
(2,544,787.00)
(2,507,576.00)
(22,600,000.00)
(20,400,000.00)
155,800,000.00
PreTax Profit
10,267,104.00
Тах Expense
320,705.00
(42,200,000.00)
Net Profit after Tax
10,587,809.00
113,600,000.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc91eb436-6202-4368-9458-806984f92c1b%2F561a2f05-26ee-4006-a152-62cb878d053d%2F2v0q7oa_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ADBRI Limited (ABC, formerly Adelaide Brighton Limited) is an integrated construction
material and lime producing group of companies focused on the construction, engineering,
infrastructure and resource sectors in Australia. ABC has three main operating divisions being:
Cement, Lime, Concrete and Aggregates and Concrete Masonry Products.
Acrow (ACF, formerly NMG Corporation Limited) operates in the Australian construction
services industry, hiring formwork, falsework and scaffolding equipment and undertaking sales
of formwork and scaffolding related consumables. The Formwork operation involves the
supply of the temporary mould that supports concrete structures in their construction. The
Scaffolding operation supplies scaffolding equipment and access solutions to builders and
building contractors when working at heights.
Below are extracts of ACF and ABC Limited's income statements and balance sheets for 2020.
Item
ACF
ABC Limited
Income Statement
Income Statement
Operating Revenue
81,681,600.00
1,453,600,000.00
Other Revenue
2,196,471.00
4,100,000.00
Total Revenue Excluding Interest
Operating Expenses
83,878,071.00
1,457,700,000.00
(61,463,784.00)
(1,188,100,000.00)
269,600,000.00
EBITDA
22,414,287.00
Depreciation
(9,639,607.00)
(91,200,000.00)
Amortisation
0.00
(2,200,000.00)
(93,400,000.00)
Depreciation and Amortisation
(9,639,607.00)
EBIT
12,774,680.00
176,200,000.00
Interest Revenue
37,211.00
2,200,000.00
Interest Expense
Net Interest Expense
(2,544,787.00)
(2,507,576.00)
(22,600,000.00)
(20,400,000.00)
155,800,000.00
PreTax Profit
10,267,104.00
Тах Expense
320,705.00
(42,200,000.00)
Net Profit after Tax
10,587,809.00
113,600,000.00
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