Wednesday, December 4, 2019
Annual Report of Alto Metals Limited Free-Samples for Students
Question: In your Evaluation of the Companys Performance, you should take account of Relevant Information in the Annual Reports Explanations for the level of Profits generated from assets and how the level varied annually between 2014 and 2016. Answer: Discussion: The overall assets of Alto Metals are mainly evaluated in the essay, where the companys overall return on assets is being evaluated. The overall annual report of Alto Metals Limited is mainly identified as the most viable document, which depicts the financial position of the company. However, the company mainly aims in discovering and acquiring gold mines for improving its profitability mining company. The company also aims for searching uranium object, which could develop more uranium mining facilities. The company has mainly conducted projects for search new depicts and mining for gold. Moreover, the revenue of the company has mainly increased from 2014; however, a sudden decline was witnessed in 2016. The company does not have any kind of constant revenue, which could support its constant increase in expenditure. The overall return on assets of the company has mainly improved from 2013 to 2016. Where the first ROA was mainly at -11.39%, -44.04%, -97.04% and then in 2016 it reached to -25.82%. This overall return on assets has mainly depicted efficiency of the company to utilise its assets. In addition, the improvement of ROA is mainly identified during 2016, where a decline in retune on assets from -97.04% went to -25.82%. The improvement in return on asset is seen to increase by 73.4% in 2016 as compared to 2015. This mainly suggested that increased improvement depicted by ROA states the effective measures taken by the company to support its activities. Weygandt, Kimmel Kieso (2015) stated that investors by using the return on assets could effective identify efficiency of the company to attain the required revenue by using the same capital. On the other hand, Damodaran (2016) criticises that ROA does not allow the investors to determine the risk associated with investment and only portray t he level of revenue attained by deploying certain fixed assets. The three-asset category and one income statement category could be evaluated, before actually seeing the return on assets of the company. The asset class, which needs effective inspection, are cash, property, and inventories. The evaluation of these three categories is mainly essential by the investors before seeing the return on assets. In addition, the income statement that needs to be evaluated is the sale of goods and products. The overall evaluation of cash, property, and inventories could mainly help the identifying the financial capability of the company. Vogel (2014) mentioned that evaluation of inventory could mainly allow the investor in identify the overall capital blockage in inventory store. On the other hand, Damodaran (2016) criticises that the evaluation of inventory does not allows the investor to detect the actual financial position; instead it helps in depicting ht cash generating capacity of the company. Furthermore, the second category, which needs to be evaluated by the investors in cash and cash equivalents present in Alto Metals Limited. The decrease in overall cash of Alto Metals Limited could be witnessed from 2012 to 2016, which is due to the constant loss incurred by the company during fiscal year. Relevant increase in cash deposited is mainly witnessed in 2016, as compared to 2015, which is due to the rise in profitability of the company. Brigham Ehrhardt (2013) mentioned that high cash availability could mainly allow the company to support its financial obligations in time of need and continue with its operations smoothly. However, Weygandt, Kimmel Kieso (2015) argued that increment in the overall cash availability mainly indicates the non-effective use of recourses, which is been conducted by the company. The fourth category, which needs to be analysed by the company is inventory system. However, Alto Metals Limited does not have any inventory, as it might have no impact on the overall sales of the company. Moreover, the category, which needs to be examined from income statement, is sale of the goods and the products. The evaluation of this category is mainly essential for detecting the overall profitability attained by Alto Metals Limited from 2012 to 2016. The company mainly accommodates other income and does not have any products, which is been sold to customers. The only income, which is been attained by Alto Metals Limited is from other sources. This income mainly stated to increase from 2014, while a relatively decline in revenue could be witnessed from 2015 to 2016. The evaluation of income statement and sales of products mainly allows in adding overall demand for companies products. However, being an exploration and mining company, Alto Metals Limited has still not achieved th e required projects, which could provide relevant income from sales (Deboeck Kohonen, 2013). There is relevant different scale from 1-10, which could be used in valuing the overall return on assets of Alto Metals Limited. In addition, the return on assets of Alto Metals Limited is mainly at -25.82%, which could be rated in the scale of 1. This scale 1 mainly depicts that overall results of retune on assets is very unsatisfactory. This unsatisfactory outcome is mainly due to the negative ROA of Alto Metals Limit. The company has not being conducting any kind of sales from 2012 to 21016, which is mainly declining its ability to utilise its assets. In addition, relative decline in total assets could also be witnessed, which is due to the sales of asset conducted by the company during 2016 fiscal year (Vogel, 2014). There are relevantly no ratios, which could be identified from annual report of Alto Metals Limit in 2016. This financial information of the company has effectively reflected in the real world, as no revenue was generated from operations, which led to loss. The company effectively uses Accounting policies which is been laid down by AASB. There is not significant change in the overall accounting policies. Furthermore, the Director and CEO Reports mainly depict the loses, which is continuously incurred by the company due to non-commencement of adequate operations. There is no limitation of the financial statement of the company as, it complies with all the relevant accounting method, which is been depicted by the AASB (Brigham Ehrhardt, 2013). Reference Brigham, E. F., Ehrhardt, M. C. (2013).Financial management: Theory practice. Cengage Learning. Damodaran, A. (2016).Damodaran on valuation: security analysis for investment and corporate finance(Vol. 324). John Wiley Sons. Deboeck, G., Kohonen, T. (Eds.). (2013).Visual explorations in finance: with self-organizing maps. Springer Science Business Media. Overview, C., Secretary, D., Directory, C., Shareholders, T., Governance, C., Information, I. et al. (2017).Focus on gold exploration in Australia | WA Mining.Gold Focussed WA Mining Exploration Company. Retrieved 29 April 2017, from https://altometals.com.au/ Vogel, H. L. (2014).Entertainment industry economics: A guide for financial analysis. Cambridge University Press. Weygandt, J. J., Kimmel, P. D., Kieso, D. E. (2015).Financial Managerial Accounting. John Wiley Sons.