Analysis of Ama Group Limited

Question: Analysis of Ama Group Limited. Answer: Introduction: Ama Group Limited focused on the wholesale vehicle aftercare and accessories market, includingmultiple vehicle panel repair shops, vehicle protection products accessories, automotive electrical cable accessories and automotive component remanufacturing. The Company is a leader in this sector, Operating Specialised Automotive Aftercare and Accessory Companies, each with a commitment to excellence in customer service, cost effective operations, and sector leading brands (Amagroupltd.com. (2016). 1. Review of the balance sheet The current assets of the company are $22880000 The non-current assets of the company are $ 60308000 The current liabilities of the company are $ 23762000 The non-current liabilities of the company are $11056000 The total stockholders equity of the company are $48370000 30th June 2014 30th June 2015 30th June 2014 Assets $000 $000 % Change Current assets Cash and Cash Equivalent 2,197 2098 5% Receivable 11,683 8,572 36% Inventories 7,952 6,595 21% Other current Assets 1,048 1,121 -7% Total current assets 22,880 18,386 24.44 Non- current assets Property, Plant equipment 8098 2,777 192% Intangible Assets 48,571 31,013 11% Deferred Tax Assets 1682 1363 23% Others 1957 2509 Total non- current assets 60,308 37,662 60.13 Total Assets 83,188 56,048 48.42 Liabilities Current liabilities Trade and other payables 10,702 6,506 64% Borrowings 8,330 5 166500% Income tax payable 949 1830 -48% Provision 3,781 2,482 52% Total current liability 23,762 10,823 119.55 Non-current liabilities Borrowings 11 16 -31% Deferred Tax Payable 862 346 149% Provision 251 235 7% Others 9931 - Total non current liabilities 11,055 597 1751.76 Total liabilities 34,817 11,420 204.88 Equity Share Capital 74,904 74,904 0% Accumulated Losses -26534 -30276 -12% Total equity 48,370 44,628 8.38 (Annual report, 2015) Below table shows brief comparison (Amounts in $ 000) Particulars 2015 2014 % increase or -decrease Total current assets 22,880.00 18,386.00 0.24 Total non-current assets 60,308.00 37,662.00 0.60 Total current liabilities 23,762.00 10,823.00 1.20 Total non-current liabilities 11,056.00 597.00 17.52 Total stockholder's equity 48,370.00 44,628.00 0.08 On the basis of above table, it has been clear that Current has been increased by 24% since there is slight increase in cash, inventories and other current assets but also there is higher increase in the receivable which on other hand may implies that revenue (Sale) in the year has been increased in comparison to the last or may be due non realization of money in comparison to the year In the stated case revenue has been increased in comparisons to the last year. Hence, increase in the current assets shown good performance of the company. Non- current assets has been increased by 60% these refer to the assets which are not expected to be realised within one month. Such high in the noncurrent assets in comparison to the last year is mainly due to the purchase of fixed assets as well intangible assets (Accounting tools, 2015). Current liabilities has been increased by 120% which is quite high increase, this is mainly due to the borrowing of higher amount in comparison to the last year. These refer to the liability which is expected to be realised within one month. Since current assets are sufficient with the company it is showing good performance. Noncurrent liabilities has been increased by 1751% which is relatively very high and is mainly due to the deferred Consideration Key vendors ,this would not affect the financial position of the company . There is no change in the equity share capital. However accumulated loss has even decreased by 12% which is good sign for the company. At nutshell, it can be stated that taking into consideration the balance sheet, financial position as an overall is showing the positive performance of the company but also three must requirement to reduce the borrowing to the extent possible. 2. Review of the income statement The total operating revenues of the company are $ 95774000 The Cost of goods sold of the company are $Nil The total expenses before taxes of the company are $ 82931000 The non-operating gains and losses of the company are $0 The earning per share of the company is $2.72 Below table shows brief comparison (Amounts in $ 000) Particulars 30th June 2015 30th June 2014 % increase or -decrease Total operating revenues 95,774.00 64,259.00 0.49 Cost of goods sold Total expenses (before taxes) 82,931.00 87,030.00 -0.05 Any non-operating (or extraordinary) gains and losses - - Earnings per common share 2.72 1.76 0.55 (Annual report, 2015) Above table clearly implies that Revenue has been increased by 49% which is relatively high and redacts excellent performance of the company in regard to the marketing. On the other hand, there is decrease in the total expenses by 5 % which is such huge achievement for any company. This scenario is key role for other also. Revenue has been increased with higher amount and simultaneously there is cost cutting. The company is acting as a role model for other. It clearly implies that strategy used by them is very effective as well people who are involved for application of the same are very efficient. Resultant company has achieved this. Also earning per share of the company has been increased by 55 % which shows relatively good performance of the company since it is also one of the factor which provide an overview about the companys profitability. EPS has been taken as a factor for investment decision by any investor (Accounting tools, 2015). In the nutshell, it can be stated that company has been running the business as role model for others. 3. Review of the statement of cash flows The net cash inflow from operating activities of the company are $ 7820000 The net cash inflow from the financing activities of the company are $2927000 The net cash inflow from the investing activities of the company are $- 10693000 The net increase in the cash during the year of the company are $ 99 Below table shows brief comparison (Amounts in $ 000) Particulars 2015 2014 % increase or -decrease Net cash inflow from operating activities 7,820.00 6,033.00 0.30 Net cash inflow from financing activities 2,972.00 -16,334.00 -1.18 Net cash inflow from investing activities -10,693.00 -6,726.00 0.59 Net increase in cash during the year 99.00 -17,027.00 -1.01 Above table clearly implies that Cash flow from the operating activities has been increased by 30% which directly implies the cash generated from day to day activities which are essential for the operation of the company; it shows good performance of the company (Accounting tools, 2015). Cash flow from the financing activities has been reduced by 118 % it is also show positive performance since it implies that company has received higher amount from the borrower in comparison to the last year ne though repayment is also higher comparatively. dividend paid is more and less same and does not have any major impact on the cash flow from the financing activities Cash flow from the Investing activities has been increased by 59% which is negative. Ties are mainly due to purchase of the assets or acquiring of the business. Also payment for intangible assets has been made. In the nutshell, cash flow statement shows good performance in regard to the company Review of the stockholders equity The following is the list of the required account balances: (Amounts in $ 000) Particulars 2015 2014 % increase or -decrease Issued capital 74,904.00 74,904.00 0 Accumulated Loss -26,534.00 -30,276.00 -0.12 (annual report, 2015) There is no change in the equity share capital. However accumulated loss has been decreased by 12% which is good sign for the company. In the nutshell, it is implied that company have been running the business efficiently soaps to reduce the accumulated loss. 4. Conclusion On the basis of the analysis of the balance sheet, income statement and cash flow statement, it has been proven that Financial position as an overall is showing the positive performance of the company but also three must requirement to reduce the borrowing to the extent possible. Revenue has been increased with higher amount and simultaneously there is cost cutting. The company is acting as a role model for other. It clearly implies that strategy used by them is very effective as well people who are involved for application of the same are very efficient. Resultant company has achieved this. cash flow statement also shows good performance in regard to the company 5. References Amagroupltd.com. (2016). Amagroupltd.com. (2016).AMA Group Ltd - Businesses. Amagroupltd.com. (2016).AMA Group Ltd - Financial Reports. Amagroupltd.com. (2016).AMA Group Ltd - Home. Readyratios.com, 'Financial Analysis and Accounting Book of Reference: Statement of Financial Position | IFRS Statements | IFRS Reports | Readyratios.Com'. Nap. 2015. Web. 22 May 2016. Readyratios.com, 'Financial Analysis and Accounting Book of Reference: Statement of Financial Position | IFRS Statements | IFRS Reports | Readyratios.Com'. Nap. 2015. Web. 22 May 2016. Conclusion