2 marks c extracted information from the financial

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formula.2 marks(c) Extracted information from the financial reports of Demeter Pty. Ltd. for the past three years is shown in the table below: 201520142013Return on Assets13.0211.210.15Profit Margin31%32%35%Asset Turnover0.420.350.29Comment on the changes that have occurred to the ROA.2 marks(d) Calculate the cash conversion cycle for Demeter Pty. Ltd. for the year ended 30 June 2016. 2 marksQUESTION 8 (continued):23
(e) Explain what the cash conversion cycle means and suggest what the managers of Demeter Pty. Ltd. could do about it.2 marks(Total for Question Eight: 8 + 2 + 2 + 2 + 2 = 16 marks)Working space (if required)QUESTION 9:9 MARKS24
Wesfarmers takes action against staff over Target rebatesby Sue Mitchell, The Age, 12 April, 2016Wesfarmers is cracking down on compliance across its stable after finding that about 10 Target staff pumped up the chain's earnings by almost 40 per cent by colluding with suppliers to book extra rebates in return for promises of higher prices.Four senior Target executives have either resigned or been sacked over the accounting scandal and more could go as Wesfarmers managing director Richard Goyder seeks to reassure investors and regulators that the collusion was an isolated event and not a sign of deeper cultural and compliance problems at Australia’s largest retailer. Wesfarmers and its external auditors, Ernst & Young, commenced an investigation after the irregularities were reported to senior Wesfarmers executives shortly after a restructure of discount department stores Targetand Kmart in March.Wesfarmers found that a group of about 10 staff were involved ina scheme to offer about 31 overseas clothing suppliers price rises averaging 4 per cent in the June half in return for extra rebates in the December half. Letters offering price rises were concealed from Wesfarmers and its auditors.Rather than being booked against the cost of inventory, in line with accounting standards the rebates were taken to profit, boosting Target's December-half earnings by about $21 million, almost 40 per cent.Target's earnings before interest and tax would have been $53 million in the December half compared with the $74 million reported, and Wesfarmers' group net profit would have been $15 million, 1.1 per cent, lower than reported.Wesfarmers said the arrangements had no cash flow implications, as the rebates were not collected but treated as receivables, and would have a negligible impact on full-year results as any benefit would have been unwound in the current half.Wesfarmers said Target's new management team was working with suppliers to unwind the arrangements, while Wesfarmers was taking action to reinforce the importance of complying with accounting rules."It may be a sign of more trouble," one fund manager said. "When sales go backwards profits generally don't go up."Mr Goyder said that while Target's earnings continued to decline, there had been encouraging progress on several fronts. "The stores are better, the product range is better, the pricing architecture is better – a number
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