apply financial statement analysis, management accounting concepts and finance
frameworks to changing global and economic conditions and to help assess the impact on
apply and use financial statement analysis, with other evidence, to provide solutions to real
SEQ Investment Co is an investment company. The company has major investments in several
Australian public companies, one of which is Santos Limited, an Australian resource company with
activities in the gas, oil and resources industry. The accountant of the SEQ Investment Co has
approached you to provide a financial analysis of Santos Ltd.
You access the Santos 2014 Annual Report from the following website:
You are required to provide a written report to the accountant of SEQ Investment Company. Your
advice should address the following:
- A brief explanation as to the objective/s in measuring organisational performance.
- Using the information contained in the financial statements of Santos Ltd, calculate the
following ratios for the years 2013 and 2012:
Profitability – Net Profit Margin; Gross Profit %; Return on Assets; Earnings per Share
Efficiency – Accounts Receivable Turnover; Inventory Turnover
Short-Term Solvency – Current Ratio; Acid Test; Cash Flow from Operations to Liabilities
Long-Term Solvency – Debt to Equity; Debt to Total Assets.
Market Based – Price Earnings; Dividend Yield
- Comment on trends revealed by the ratios calculated in (2) above. Use the headings
Profitability, Efficiency, Short-term Solvency, Long-term Solvency and Market Based. Where
possible, relate the changes observed in these ratios to events in the business environment in
general as discussed in (4) below.
- Discuss two (2) recent events which have recently occurred in the business environment
which may have impacted on/or will impact on results of Santos Ltd in general. Where
possible support your argument with newspaper articles or other references e.g. extracts
from reports from the gas and resources industry.
- Comment on the limitations of relying purely on financial ratios in evaluating
organisational performance. Include in your comment the benefits of including nonfinancial
performance indicators to assess the performance of Santos Ltd.
- A report style assignment is required. Choose a report structure, with the use of appropriate
headings you deem to be of a professional standard. There is no prescribed structure.
- Full referencing is required in accordance with the USQ preferred Harvard Referencing style.
- There is no specified word length for this assignment. However, be as concise and efficient in your
writing as possible. Use 1.5 line spacing. Use Appendices where appropriate.
- Attach the detailed workings of your calculations as an Appendix to your report. Provide a table
summarizing the results of your calculations in the body of your report.
- Assignment extensions will be granted if needed where medical or extenuating reasons exist.
Generally extensions will be granted for one week. If an extension of more than two weeks is
required then a different assignment may be given. This is because marked assignments and
solutions cannot be released until all assignments have been received. It is unfair on other
students to delay the return of their marked assignments unduly.
- The assignment is to be submitted electronically via the Submission Drop Box (a link to this will
be provided at a later date). File types allowed include doc and docx. Only one file will be
accepted. If more than one file is uploaded, only the first file listed will be marked.