Select harvest limited financial statement analysis

Document Type:Research Paper

Subject Area:Accounting

Document 1

Its main agrifood business is growing and processing almond and a leading manufacturer, processor and marketer of nut products, health snacks and muesli. These competences results to continuous benefits in the entire value chain. This is both domestic and export markets. The main global markets are China, Middle East, India and Europe (Harvests and Harvests, 2018). Equity Source:(Harvests and Harvests, 2018) Contributed equity represents fully subscribed and paid capital. Issuing equity is one of the alternative methods that firms can use to raise funds to finance investment projects. It makes the biggest capital source for all public limited company and normally lays foundation for procuring other types of financing. Equity finance represents capital provided by ordinary shareholders through the issue of securities. It is a total of issue price per share multiplied by number of shares issued (Pandey, 2015). It is long term in nature. Carries voting rights. Comprises common stock and preference stock. Has residual claim on profits and assets of a corporation, therefore making it the most risky source of finance. A share represents ownership in the company and therefore a right to profit distributions. It is only refunded in case of company liquidation (Pandey, 2015). Select harvest issued share capital changed from A$ 178,553 million in 2016 to A$ 181, 164 in 2017. This increase is attributed to the issue of dividend reinvestment plan of 413,373 shares totaling to an additional A$ 2,611 million to the share capital of the company. This is a good strategy for both the company and shareholders. This is because they get to add value to their investment while the company is able to retain cash which can be used to finance further growth using inside finance instead of external one.

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Source:(Harvests and Harvests, 2018) Reserves represent internal sources of finance. Relocations of revenue to the general reserves to allow for expansion or acquisition of non current assets. It is also used to issue bonus securities. Share Premium arises when accompanies sells securities at a price higher than the par value. Share premium may be used in several ways like Paying unissued securities, retiring primary expenses and retiring discounts on securities. The reserves of Select Harvest increased from $ 11,168 million to $ 11,602 million during 2016/2017 financial year. g. semi-annually). Final proposed is paid after the year-end or after the completion of final accounts. If a company makes distributions in these 2 tranches then the dividend section of the Profit & Loss allotment should disclose interim paid and final proposed. Ordinary shareholders receive dividends as return on their shares bought in a firm.

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cents for 2016/2017 financial year. This means the earning power of the firm as well as earnings or returns attributable to every share held by an investor has deteriorated or declined. This is not good market news since these ratios are indicators of the value of the firm and the growth of this value in future (Britton and Waterston, 2013). Source: (Harvests and Harvests, 2018) Source: (Harvests and Harvests, 2018) Income tax expense is $ 2,729 million as per the income statement. It is made up of current tax and deferred tax (current tax + deferred tax). source: (Harvests and Harvests, 2018) The above income tax expense of $2,729 million is different from effective corporate rate multiplied by accounting income of $3,593 million. The Australian corporation effective tax rate is 30%. This arises from variations in accounting and taxation with regard to revenue and expenses realization principles.

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In general this variation between taxable income and accounting profit is categorized into impermanent differences and permanent differences. Impermanent differences refer to the variations in carrying amounts and tax bases of assets and liabilities in the statement of financial position (Aasb. This is a 11. decrease. Source :(Harvests and Harvests, 2018) Income tax paid for the financial year 2016/2017 is $ 29,022 million compared to $ 890 million in the previous accounting year. This indicates the actual amount paid by Select Harvest to the tax authority. It is a product of corporate tax rate multiplied by taxable income. From the cash flow statement income tax paid is $29022 million while that from statement of comprehensive income is $ 2729million. This means the amount provided for as tax during the accounting period is $29022 million but the actual cash paid as income tax is $2729 million (Harvests and Harvests, 2018).

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Unlike the income statement where profit reported is influenced by accounting policies and estimates, cash flow indicate the performance of the business enterprise without such influences, therefore provide a better perspective to evaluating the performance (Iasplus. com, 2018). Out of this financial statement analysis I have gained insights into the reality of accrual accounting basis and cash based accounting out of which I can now confidently interpret figures in financial statements. References Aasb. gov. au. Australian Accounting Standards Board (AASB) - Home. online] Available at: http://www. online] Select Harvests. Available at: http://selectharvests. com. au/annual-reports/ [Accessed 21 Jan. Iasplus.

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