Welcome

Hello, I’m Amanda and welcome to my blog and Accounting, Learning and Online Communication term 2. I look forward to getting to know as many of you who what want to be heard and most importantly learning from each of you. I am excited to embark on this journey.

Good luck to you all and happy blogging.

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Ratio’s, Ratio’s & more Ratio’s

    2016 2015 2014 2013
Profitability Ratios          
Net Profit Margin Net profit after tax/sales 10.6% 13.9% 12.7% 9.9%
Return on Assets Net profit after tax/total assets 7.6% 10.3% 10.2% 9.8%

 

 

Net Profit Margin – This is the amount that is taken home after all costs (overhead, operating, cost of goods sold debt and taxes) have been taken away from sales of goods or services. Anpario had a slight decrease of 3% in 2016 and this was because there was a decrease in operating profit. If there was an increase in sales for 2016 this would have offset against the operating profit. However, Anpario have maintained a steady profit over the last four yours sitting around the 10% give or take around 3%.

Return on Assets – This is the amount of how much Anpario total assets generating in profit each year. Anpario for 2016 has a 7.6% return on assets however, this is a drop from 10.3% in 2015. In 2016, I can see that there is an increase in cash and cash receivables as well as inventories and can see this has contributed to the decrease. I believe anything over 5% is a good return on assets.

 

    2016 2015 2014 2013
Efficiency (or Asset Management) Ratios        
Days of Inventory Inventory/av.daily cost of goods sold 63.6 51.5 44.8 39.3
Total Asset Turnover Ratio Sales/total assets 0.71 0.74 0.81 0.99

 

Days of inventory – This is the amount of days it takes Anpario to turnover of their inventory on hand. Anpario started off well for 2013 with a 39 day turn around on inventory and slowly increase to a 63 day turn around in 2016. In 2016, I can see that Anpario had a higher inventory on hand compared to the previous years as well as a higher cost of goods sold in 2013. There increase in different areas have contributed to the increase in days it takes to turnover inventory in 2016.

Total Asset Turnover Ratios – This ratio shows how efficient Anpario is using their assets to generate sales. In 2016, Anpario was producing 70 cents for every dollar of sales, I think this is a low ratio and could be improved. In 2016 drop due to an increase to inventory and not enough of an increase to sales to compensate the inventory.

    2016 2015 2014 2013
Liquidity Ratios          
Current Ratio Current assets/current liabilities 4.47 4.82 3.04 2.71

 

 

 

Current Ratios – The current ratio shows how well Anpario are at paying back its short-term and long-term obligations. Anpario appear to be doing well in this area and have doubles their dollar over a four-year period. Anpario does not have a large amount of debt obligations and this is why the current ratio is high.

 

    2016 2015 2014 2013
Financial Structure Ratios          
Debt/Equity Ratio Debt/equity 19.3% 14.0% 23.2% 24.9%
Equity Ratio Equity/total assets 83.8% 84.4% 78.3% 77.0%
    16.19% 15.57% 21.74% 22.98%

 

Debt/Equity Ratio – Shows the percentage of borrowings that Anpario is using to finance its assets.

Equity Ratio – Shows the percentage of total assets that Anpario stockholders are financing.

Anpario appear to be sitting on the low side of the debt ratio. This shows me that Anpario produce more than enough sales to pay back their debts. It looks like Anpario have taken advantage of the increase in profits and purchase additional assets as there was an increase in 2016 to 19.3% from 14.0% in 2014 in the debt/equity ratio.

 

    2016 2015 2014 2013
Market Ratios          
Earnings per Share (EPS) Net profit after tax/nos of issued ordinary shares $0.12 $0.19 $0.17 $0.14
Dividends per Share (DPS) Dividends/number of issued ordinary shares $0.05 $0.05 $0.04 $0.03
Price Earnings Ratio Market price per share/earnings per share 2,333.7 1,887.1 1,710.7 2,395.9
    0.04% 0.05% 0.06% 0.04%

 

Earnings per Share – This is how much money Anpario is making for its shareholders and Anpario does not seem to be doing very well in this area as for 2016 only earnt 12 cents for each share. Anpario need to be careful that this does not turn into a negative figure in years to come. Anpario have a large number of issued ordinary shares and their profit is not high enough to compensate this.

Dividends per Share – This is the amount each shareholder is paid per share. For 2016 each shareholder was paid 5 cents per share, this figure has increase by 2 cents over the past four years and find this strange as I would have thought it would have fluctuated with the earnings per share for each year.

Price Earnings Ratio – This is how long it will it will take for a shareholder to earn back their investments. Looking at 2016, if a shareholder were to invest in one share at $288.50 and Anpario paid all shareholders $0.05 each year it is going to take 2,333 years to earn back their investment. Now I am not sure if I have calculated some wrong here as Anpario’s market prices per share is $288.50 which is quite high. If this is a true calculation then I have read that this can mean that investors anticipate a higher growth in the future.

 

    2016 2015 2014 2013
Ratios Based on Reformulated Financial Statements        
Return on Equity (ROE) Comprehensive Income/shareholders’ equity 8.74% 13.72% 13.71% 12.70%
Return on Net Operating Assets (RNOA) Operating income after tax (OI)/net operating assets (NOA) 13.84% 20.59% 18.94% 16.52%
Net Borrowing Cost (NBC) Net fin. expenses after tax/net financial obligations 0.43% 0.54% 0.33% -0.48%
Profit Margin (PM) Operating income after tax (OI)/sales 10.05% 15.43% 13.21% 9.94%
Asset Turnover (ATO) Sales/net operating assets (NOA) 1.38 1.33 1.43 1.66
Economic profit (RNOA – cost of capital) x net operating assets (NOA) 679.0 3,598.4 3,096.7 2,578.6

 

Return on Equity – This is how much Anpario gets back for each dollar of equity (shareholders). Anpario were doing well in 2013, 2014 & 2015 however, have dropped by 5% in 2016. It appears that Anpario has had a decrease in their comprehensive income due to an increase in expenditure in exceptional items and administrative expenses. Also, total equity has increase for 2016 due to an increase in share premium and retained earnings.

Return on Net Operating Assets – This is the amount of how much Anpario total assets generating in profit each year minus the financial expenses. There is a significant increase compared to ROA, in 2015, 2014 & 2013 there is an increase of double the ROA. 2016, there was not as much of an increase due to a decrease in operating income that year.

Net Borrowing Cost – This is the average interest rate on current debt obligations. Anpario has a very low average interest rate over the four years and this is because Anpario has no financial obligations for this period.

Profit Margin – This is the amount of net income which is received for every dollar of sales made. Comparing this figure to the net profit margin the figures are almost identical for each year except for approximately 1% increase in 2015 & 2014.

Asset Turnover – This ratio shows how efficient Anpario is using their assets to generate sales, minus financial obligations. It is interesting to see once financial expenses are taken out of the equation how better Anpario is looking. So again, there is an increase by double across the four years compared to TATO and this is we are only looking at operation expenses.

Economic Profit – This is the amount that is left after all operating cost have been taken away. Anpario are looking very dismal in 2016 due to a decrease in RNOA, it appears that there was an increase in Administrative expenses and exceptional items for 2016 and this have decreased the operating profit before income tax which has had a fall on effect with IO. In saying this 2015, 2014 & 2013 have a higher economic profit. 2015 was the highest out of the remaining three years and the two remaining years dropped in profit due to a decrease in NOA and OI.

 

Comments and responses to step 3 – Restated financial statements

 

I cannot recommend enough that you complete the reading in Chapter four and watch the 3 lectures in correspondence to restating financial statements. All of this help me a great deal, by better understanding on how to complete the task at hand.

I did just that (watched the lectures and completed the reading) and I found it quite easy with a small hiccup at with the balance sheet. I communicated this on the Facebook page asking for help however before I knew it I figured it out myself. I left my question on Facebook and added the solution to the problem (https://www.facebook.com/groups/606638232724110/).

In my every day working lift this is what I do best, well not quite exactly this but working with number, data entry and reworking data with formulas in excel.

What have I learnt from this task, well I was quite surprised that there was not as many financing activities as I was expecting. I guess I never really thought about how operating and financing activities would be spilt in the financial statements. I didn’t really learn much about my firm while completing step three and this is because I put a lot of my focus into restating the financial statements and ensuring accuracy with data entry and formulas.

Overall, I enjoyed this task.

 

I am excited to announce I have finished step 3 (ASS#2)

Check out my restated financial statements – Assignment One & Two

I am glad that this step is completed and I am getting ahead again (after falling behind). I am back to work part time (3 days) next week, after being on maternity leave for 9 months. I hope next week goes smoothly and I can keep ahead until the end of term.

Please let me know what your thought are on my step three.

Good luck and hope you all finish soon and with ease.

Anpario & The Stock Exchange!

Anpario produces a range of feed additives for animals, there are four distinct categories one for each animal type swine, poultry, aqua and ruminant that they produce. There is a range of feed additive products that support the animal’s performance, health, growth and much more for each of these animal types. I think of this feed additive just like us humans taking vitamins but for animals.

Back in 2011 three United Kingdom companies joined forces and created Anpario, each company brings a wealth of knowledge and experience with them. Anpario has also expanded outside on the UK to several different countries, Europe, CIS, Latin America, Middle east & Africa, Asia Pacific, China and North America. I believe theses are all subsidiary companies of Anpario.

There are quite a few news articles about how well Anpario is doing in the Stock Exchange, they have been ranked one of the top 13 shares for the future (http://www.iii.co.uk/articles/427561/top-ranked-shares-future) & (http://www.iii.co.uk/articles/404290/13-shares-future). I am not familiar with shares and the Stock Exchange just yet however I am thinking I might need to buy some shares in Anpario.