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Corporate Accounting

Abstract

CIMIC and Lendlease are two of Australia’s and the world’s top engineering and construction firms. It has been possible for both of these organizations to withstand and thrive through a great deal of change and growth throughout the years. While sales and profitability data show a favourable head-to-head comparison, other important measures such as crucial market ratios, cash flow analyses, and daily operational efficiencies set these two companies apart from one another. Overall, the Lendlease group has a modest advantage in terms of quantitative indicators, as well as corporate social responsibility and management qualities. There are several variables to consider when deciding whether or not to buy, hold or sell a stock, including personal preferences, financial data, and current economic situations. According to an in-depth assessment and comparison of both companies, and taking into account the current Australian economic landscape, the Lendlease Company would be a better choice to invest in, albeit not much.

 

 

Introduction

Lendlease and the CIMIC organizations, which are involved in asset management as well as building and engineering projects, are the ones who are responsible for providing all of these services. In addition to mining and mineral processing, the CIMIC group also provides environmental services as part of its additional offerings. The Lendlease Group is comprised of several subsidiaries (Pászthory,2015).

The following companies are part of the CIMIC group. In addition to Leighton Asia and Broad, CPB Contractors include (construction), the Thiess Corporation (mining), Sedgman (mining), UGL Holdings Inc. (services), Partnerships in the Pacific (public-private partnerships) and activities of the EIC (consultancy).

Analysis of CIMIC

Following are some highlights of our FY21 financial performance:

  • Underlying NPAT of $405 million, statutory NPAT of $402 million
  • Group revenue2 increased by 8.3% on an annualized basis to $14.7 billion.
  • NPAT margins4 of 4.2 percent versus 4.7 percent in FY20; profit before tax margins of 5.2 percent versus 3.9 percent in FY20;
  • The refactoring of operating cash flow increased by $603 million over the previous year.
  • 4 billion dollars in readily available cash; good financial position.
  • Debt reduction from $542 million to $498 million, after including repayments and dividend payments of $318 million

With our first foray into the Eurobond market, we were able to improve our capital structure while also broadening our funding options and maturities. We agreed to a three-year, $1.4 billion syndicated performance bond facility as a means of assisting us in fulfilling our commitments under the robust tender pipeline.

Money Comes In And Out

  • An operating cash flow of $516.2 million, an increase of $602.5 million over FY20 on a comparable basis.
  • Pre-factoring EBITDA cash conversion for FY21 is 57%.

On at 31 December 2020, the factoring balance was $434.1 million, a decrease of $541.7 million from the previous year’s $975.8 million high (Das,2020).

THE ECONOMIC SITUATION

  • 4 billion dollars in liquid assets consist of $1.94 billion in cash and $2.44 billion in undrawn bank facilities, indicating a strong position on the books.
  • In the nine months leading up to September 2021, the $144.0 million loan balance was fully repaid, and the program was shut down.

An eight-year corporate Eurobond (equal in value to $982.5 million at the time of issuance) was issued to diversify the company’s funding sources (Band,2013).

Liabilities with a fixed rate of interest

At the end of December 2021, the company had a total of $2,442.1 million in interest-bearing obligations. May 2021 marked the launch of CIMIC’s EUR500.0 million eight-year corporate Eurobond, which will remain outstanding until May 2029. Due to the increased demand in the market, an additional 125.0 million Eurobonds were issued on June 7, 2021, bringing the total face value up to EUR625.0 million. As a component of its strategy for managing its capital, CIMIC will continue to have access to the Eurobond market thanks to this offering (Evans & Whitby,2015).

Financial Activities Generate Cash Flows

Financing activities cost the company $973.5 million in FY21. As a precautionary measure to support our group during COVID-19, we had to repay a significant portion of our debt, which included working capital facilities that had previously been partially drawn upon. This was after deducting cash inflows from our EUR625.0 million corporate Eurobond (equivalent to A$982.5 million at the issuance date).

There were $88.5 million in payments for financing leases and $15.6 million for the forcible purchase of Devine during this period. Financial guarantees granted by CIMIC for certain BICC liabilities and other costs paid by financial liabilities and other amounts due recognized on 31 December 2019 were $84.5 million (FY20: $1,398.4 million).

According to the 2021-22 NSW State Budget, an investment package in the infrastructure of $108.5 billion would be implemented over the next four years. Sydney Metro West (PPP), Sydney Metro – Western Sydney Airport (PPP), West Harbour Tunnel and Beaches Link Scheme and Warringah Freeway Upgrade (totalling $6.3 billion), M6 Extension Stage 1 ($2.7 billion), and Great Western Highway Phase 1 ($2.0 billion) are all included in the program. The State Government’s commitment to early works and site preparation for Sydney’s third city, Bradfield, which will be built adjacent to the Western Sydney International (Nancy-Bird Walton) Airport and connected to the Sydney Metro, both of which are currently under construction, is also outlined in the Budget  (Band & Gerafi,2013).

Over the next four years, the Queensland State Government’s capital investment program will provide $52.2 billion in infrastructure, including funding for schools, hospitals, roads, rails, and new sources of renewable energy. A large program of construction on M1 Pacific Motorway, a $1 billion investment in Gold Coast Light Rail – Stage Three, and ongoing work on a $13.3 billion Bruce Highway upgrade – which includes the Rockhampton Ring Road – are all included in this budget. As part of the state budget’s push for more investment in the renewable energy industry, the Queensland Renewable Energy and Hydrogen Jobs Fund were given a $2 billion budget boost .

To assist the many projects being undertaken by State and Territory Governments all around Australia, the Federal Government of Australia has committed to investing $110 billion in infrastructure over the following decade. It includes funding for the $14.5 billion Inland Rail project, which will create a 1,700 km freight corridor from Melbourne to Brisbane, the $4 billion Geelong Fast Rail in Victoria, the $14.5 billion North-South Corridor in South Australia, the $565 million Midland Highway Upgrade in Tasmania, and the $4.4 billion Western Sydney Infrastructure Plan (WSIP) and $1 billion M80 in Sydney. In addition, it includes funding for the Western Sydney Infrastructure Plan (WSIP), which will create a freight corridor from Sydney’s western

These improvements are supported by the Long-Term Emission Reduction Plan that was developed by the Federal Government of Australia. This plan outlines Australia’s technology approach for achieving net-zero emissions by the year 2050. The plan calls for public and private investments totalling over $80 billion to be made in low-emissions technologies by the year 2030. These investments will include significant new financing and investment programs supported by the government. Australia’s clean hydrogen industry may attract an investment of 350 billion dollars over the next few decades. 62,63, as an illustration of such a technology, CIMIC has the intention of playing a significant part in the expansion of this market and believes that it has the potential to significantly improve the efforts that our industry does to lower carbon emissions.

Donations to political campaigns

We will not make or solicit payments from organizations that mainly act as conduits for the funding of political parties, and we will not make or solicit donations from organizations that primarily serve as conduits for the funding of political parties and candidates for public office. It is against the rules for the Group to give a political party the use of its facilities or equipment for free or at a heavily discounted rate as a form of political contribution. Our methodology is laid out in great detail in both the Code of Conduct and the Corporate Affairs Policy.

CIMIC does not have any defined benefit superannuation plans and does not have any unfunded pension liabilities. This information should be known by international investors who are not familiar with Australia’s compulsory superannuation94 (or pension) program. The super guarantee (SG) program in Australia compels employers to contribute at least ten percent of their workers’ base salary to guarantee their workers’ financial stability in retirement (Parle et al.,2017). The only duty that CIMIC has about the money that workers have invested with the firm is to make the SG payment; apart from that, the corporation has no additional responsibilities.

The members of the Committee are all the Managing Directors that are in charge of CIMIC’s Executive and Operating Companies. The Group places a high priority on and invests heavily in significant technological advancements and digital technologies that will improve IDD and be to the company’s advantage. On the Council, there are individuals known as Innovation Leads who are accountable for the Innovation Roadmap of their respective operating firms. Sharing knowledge and experience, collaborating, conducting research, and analysing and recommending to the Steering Committee for financing innovative technologies that have the potential to bring value on a large scale or across the Group, all to increase operating company investments. The Council is responsible for locating, analysing, validating, and developing brilliant ideas. It then provides support for the ideas’ execution while also monitoring their development and reporting on their progress.

Because we are unable to provide additional funding for campaigns, special causes, or other activities taken on behalf of members, the only way for CIMIC members to participate is by paying the required annual subscription fees. We will not join any industry organizations unless doing so is consistent with both the Code and our commitment to being honest. CIMIC is in charge of managing the entire procedure, and all corporate memberships need to be approved by the organization’s Executive Chairman and CEO.

On November 19, 2021, this joint venture that was established by Apollo Global Management LLC (“Apollo”) and funds that were managed by affiliates of the Group completed its initial public offering (IPO) on the Australian Securities Exchange. As a result of this, new shares were issued to support a drop in debt at better terms. As a direct consequence of this, thirty percent of Ventia’s share capital was listed. To reach their goal of having 30 percent of the company’s shares be freely traded, Ventia’s existing principal owners, CIMIC and Apollo, each sold an additional 2 percent of their shares, for a total sell-down of 4 percent. Even though it still owns 32.8 percent of the firm, AASB 10: Consolidated Financial Statements and AASB 11: Joint Arrangements say that CIMIC no longer has joint control over Venetia. This is the case even if CIMIC is subject to AASB 11: Joint Arrangements. Although a joint venture has been classified as an associate by the accounting policy of the Group, CIMIC continues to have a significant amount of control over the organization.

Lendlease

Our approach is based on the belief that maximizing long-term value creation through accomplishing social, environmental, and economic goals is the best way to go about things. Customers, investment partners, governments, and the communities in which we operate all have a role in this process of teamwork.

Our end-to-end capabilities in all elements of real estate, from idea and planning to design and delivery, to finance and investment management, sets us apart from our competitors. Our ability to handle all aspects of real estate, from concept to completion, sets us apart from our competition.

Investments

This segment contains the Group’s leading investment and asset management platform in addition to holdings in a variety of property types, including residential, commercial, retail, and industrial real estate as well as retirement communities. From sovereign wealth funds to huge public and private pension funds, we have worked with some of the world’s top money managers for decades. We have experience with both unlisted and listed property funds and mandates. Our research-driven investing approach is backed up by active asset management, and we take sustainability very seriously. Our competitive advantage comes from the wide range of high-quality products that integrated strategy creates for our investors (Jenkins,2014).

Finance Corporation for Reconstruction and Development’s Hardship and Well-Being Fund. The Financial Corporation for Reconstruction and Development’s (Finance Corporation) Hardship and Well-being Fund Lendlease was particularly heavily hit by the epidemic in several locations. This year, we tapped into the Fund to send out a one-time reward to certain employees who went to considerable efforts to help consumers during the epidemic.

We had a difficult year in FY21 as we learned to operate in new ways. We’ve made it our mission to help those affected by the epidemic. It doesn’t matter where you work or how distant you are; we’re invested in the health and well-being of our employees. See the Hardship & Wellbeing Fund on page 35 for more information. The Group was able to make significant headway in the direction of achieving its strategic goals.

The management of future funds will benefit from the progress made on investment partner projects totalling $5 billion, which has already been accomplished. Six further urbanization projects with a combined value of 7.4 billion dollars were successfully funded. The closing of the deal on the sale of the Engineering company, as well as the sale of the US Telecommunications and Energy enterprises, was accomplished. After the close of the financial year, it was decided to sell the Services division, and the transaction is likely to be finalized by the end of the current year.

Investing results

Despite the impact of COVID, the Investments section generated an EBITDA of $276 million, a decrease of 8% from the previous year. As expected, the segment’s ROIC was 5.9%, barely shy of the 6-9 percent mark. The Investments platform’s management EBITDA, which is produced from fund and asset management operations, fell from $198 million to $165 million. Profitability from the Paya Lebar Quarter, which was completed in the previous year, dwindled to $145 million in funds management revenue, down from $212 million.

Revenue from asset management increased from $105 million to $139 million. The total rise in asset management fees was supported by a $1.3 billion renovation activity secured throughout the US residential portfolio. A decrease in retail asset management costs, along with the impact of COVID, hurt performance. As a result, residential asset management fees are now the primary source of asset management revenue (Barrett,2017). The most important operating measures are the amount of money and assets under management, as well as the investment portfolio. The new financial year began with $39.6 billion in funds under administration, an increase of 10%.

New multisector investment mandates in Australia, the United States, and Europe, as well as acquisitions throughout the Australian Funds Management platform, fuelled the company’s expansion. The increase of the Australian dollar has a negligible influence on the translation of foreign currency. Future secured FUM based on development projects now being delivered via managed funds or mandates adds another $2.7 billion to the current funds under administration.

A change in any of the assumptions used in budgeting and forecasting might have a significant influence on the Group’s future profitability, hence management considers this to be an area of estimate uncertainty. Finances and predictions for five years are examined every month by the Group, which develops budgets and forecasts For the deferred tax assets, these estimates and budgets serve as the foundation for future profitability. Inflation, interest rates, currency exchange rates, commodity prices, the company’s capacity to access capital, oversupply and demand circumstances, and government fiscal, monetary, and regulatory policies all have an impact on the group’s profitability.

The group’s present and future profitability are being driven by a combination of factors, including its development pipeline, joint ventures in property projects, investments in the retirement sector, and passive assets such as property funds. This component of the Statement of Financial Position includes both direct and indirect property assets. Direct property assets include things like investments that are equity-accounted for, while indirect property assets include things like inventories.

Working capital and liquidity

The Group has to have adequate cash on hand, undrawn credit facilities, and access to external capital to meet all of its responsibilities, including keeping up with the development pipeline, pursuing new possibilities, and meeting existing commitments. In this section, a summary of the financial resources that are required to support the activities of the group is provided, together with information on existing commitments and the liquidity risk that is presented by financial obligations. This section also includes disclosures of the Group’s trading assets and liabilities, excluding inventories, which were created as a result of trading activities and were used to determine the Group’s performance. Inventories were not included in this disclosure.

Cash, undrawn credit facilities, and access to external capital are essential if the Group is ever going to keep pace with the development pipeline and stay up with its current obligations. This section provides a summary of the company’s financial resources, as well as existing obligations and the liquidity risk that financial liabilities provide. Trade assets and liabilities are also included in this section of the financial statement. They are used to calculate a company’s performance, and they are included in this section as well (POPESCU,2019).

Conclusion

For now, we have taken care of our people’s urgent financial needs, but we also want to help them succeed over time. It was in FY21 that we collaborated on a series of webinars that provided our employees with the tools and information they needed for making smart financial decisions. Partners with organizations, non-profits, and c.16,000 suppliers and a wide spectrum of institutional investors are part of our B2B relationship portfolio. Across all of our business lines, we work with and for companies. Two-thirds of third-party cash is invested in our Investments platform by our top 10 investors. Canada Pension Plan, Mitsubishi Estate, GIC, APG, NPS, and Aware Super are only a few of the world’s most well-known pension and sovereign wealth funds that make up this group.

 

 

 

Reference

 

 

 

Abstract

Two of the three elements of a financial statement are the revenue statement and the cash flow analysis, the third being the balance sheet. While they vary according to type of information; the statement of income representing the success of the business by sales, expenditures, expenses and the statement of cash flow showing how the benefit or loss spreads through the organisation, they are inextricably related (Cyril et al., 2016).

The cash flow analysis cannot be rendered without the income statement, since the outcome of the income statement starts out with the net gain or deficit which shows the way a business handles the financial status.

Introduction

The cash account report and the revenue report are part of a company balance sheet. The cash flow statement or cash flow statement calculates the production and use of funds by a business for the length of a particular period.

The declaration of income analyses the financial performance of a company for a certain period of time, e.g. sales, expenditures, gains or losses. Often this accounting paper is alluded to as a financial statement. A declaration of the income shows if a company made a profit and a statement of cash flow shows if a company generates revenue (Andreas, 2017).

The declaration on cash flow and revenue are integral parts of the corporate balance sheet.

Part A

1.

A comment on the cash flow implies the same amount of cash and outflow from a company over a period of time.

The statement of income is the most popular financial statement that indicates total income and expenses of a company, including non-cash assets such as depreciation for a period of time.

The cash flow statement is related to the net profit or net loss calculation used to measure cash flow from operations, which is the first section of the cash flow statement.

A cash flow statement implies the exact quantity of cash inflows and exits in a business every month, every four months, or every year. Which covers current results and balance sheet adjustments, including increases or decreases in accounts payable or payable and does not include non-cash accounting products such as depreciation and amortisation.

The cash flow is generally derived by revenues generated from business activities, but may be improved by credit funds available. The short term profitability and liquidity of a company is calculated through a cash flow statement, precisely how well it will pay its bills to suppliers.

Operating activities: Evaluate the cash flow of a company by reconciling the net income with the actual cash earned or used by the organisation in its operating activities. Operating activities:

Investment activities: show cash flow from all investment activities, usually involving investments or long term asset sales including property, equipment and plant (PP&E) and investment securities. Investment activities:

Cash generated from all funding operations as capital collected from selling stocks and bonds or bank borrowing is seen. Financial transactions:

The most common accounting statement is an income statement detailing the company’s revenue and net costs, including non-cash assets (such as depreciation). A statement of sales is used to measure a company’s efficiency, in particular the sum of money it receives, the amount of money it costs for it and its profits and expenditures benefit and loss (Aris et al., 2019).

The statement of cash flow is related to the declaration of profits by net benefit or net loss, the first paragraph in the statement of cash flow. In order to measure the cash generated from sales the benefit or loss in the income statement is then used. The indirect approach is defined as this. The cash balance analysis may also be updated through a more method named the direct protocol. Under this situation, the earned money would be deducted from the sum expended on total cash flow.

Cash flows relate to the company’s operational efficiency and sales generation capacity.

The statement of cash flow is a structured text clarifying the position of a cash flow business at a certain point in time.

For positive cash flows and to give customers a profit, the long-term cash inflows of a business must go beyond their long-term cash outflows.

Notice that even if bottom line earnings are poor, cash flows can be strong.

For the performance of a business to be more reliable, analysts may evaluate the income statement along with the cash flow statement.

Business involves commerce, value exchange among two or more parties and cash is the necessary asset for economic participation. Although some sectors are more capital-intensive than others, no company can survive on a long term basis unless its owners have a good cash flow. The company’s long-term cash inflows need to outweigh long-term cash outflows for positive cash flows (Paolone, 2020).

Cash outflow occurs when a company passes money (either physically or electronically) to another entity. A transition can be rendered for staff, vendors and creditors; long-standing savings and assets; or professional costs and legal proceedings can be charged. It is important to note that legal payments through debt – a credit transaction – will not be reported as a cash outflow before money actually exits the hands of the business.

An inflow of cash is the opposite; it is any money transfer that reaches the hands of the business. Typically, customers, suppliers (such as banks or bondholders) and owners who buy equity in the company constitute the majority of the cash inflows of a firm. Cash flows often arise through legal settlements or the selling of property or equipment by businesses.

The following is a list of the different areas and the importance of the cash flow statement:

  1. Production of cash from operations. The cash used or given by a typical company operation is calculated in this portion. It indicates the capacity of the company to produce a steady positive cash flow. View normal activities as the core business. Microsoft offers applications, for example, normal operational activity.
  2. Cash flows from spending. This section lists all the cash used or supplied to buy and sell income-generating properties. If Microsoft buys or sells firms for a profit or a loss, this cash flow statement would include the corresponding estimates.
  3. Funding operation comes from currency. This segment analyses the funds balance between a company and its shareholders and its creditors. The negative statistics may mean that the company holds debt, but may also mean that the company allows dividend payments and repurchases of stocks that will appease customers.
  4. Because the low demand impedes more manufacture, the next best option is to sell the machinery far below the price of the equipment paid by the company. The corporation will show a significant positive cash flow in the year that the machinery is delivered, but it will have a grim current and future profit potential. Due to positive cash flow and unfavourable performance, investors can review income statements in accordance with the cash flow statement (Cyril et al., 2016).

Part B:

1.

a.

Companies utilise domestic cash to fund their operations wherever necessary. It is not only realistic but also eliminates additional costs of stock issuance or debt collection. Operations capital usually constitutes a company’s most secure cash flow. Cash flows from products and services sold, mortgage securities investment and earned dividends. Operating activities such as procurement of inventories, salaries and taxation include cash flows.

b.

Cash flow is an important indicator for determining the financial performance of core business activities of a company. The first segment represented in a cash flow statement includes cash from the operations and investment. Cash flow from operating activities There are two ways to represent cash from operations on a cash flow statement: indirect and primary. The indirect method starts from net income from the statement of income and then restores cash items to a cash base figure. The exact protocol monitors all purchases on a cash basis in a period which utilises the real cash flow and cash outflows (Schmutte & Duncan, 2019).

c.

The sale of properties is a secondary means of internal funding. By selling land, plant and machinery, a business may produce investment cash flows. This approach is important if the organisation has a significant number of redundant equipment or if the corporation is shifting course. However, several parties are hesitant to sell properties. Capital assets are a crucial aspect in a company’s ability to survive, and it would also be dangerous to sell it and make room for an unknown financial undertaking.

d.

Companies cannot fund all of their activities from internal funds more often than not. The financial department will choose to raise funds at low interest rates if it believes that a project would be highly profitable. The downside of the reputation of a financial company is that it can not monitor or regulate how the funds are invested. Banks, though, expect businesses to repay their loans annually. Although the investment is long sustainable, interest payments will be a liability to the business (Jeppson et al., 2016).

e.

Cash provided by corporate finance may be produced by bond issuance. Most firms choose to collect their equity investment cash because they are less costly than their loans. Contrary to accounting, although they are bankrupt, companies don’t even have to refund savings. Equity investment frequently ensures that the corporation does not accept the ongoing debt cost of loans. But it is primarily a dilution of equity that issuing further securities and other participants should first be contacted. In general, current stockholders are not glad to dilute their power and share of the income of companies.

f.

A cash balance statement explains the origins of a company’s income and how the income was invested for a given amount of time. There are no things such as depreciation which are non-cash. This helps to decide a company’s short-term profitability, particularly its ability to pay bills (NGUYEN & NGUYEN, 2020). Given the significance of cash flow management, especially for companies and SMEs, most experts suggest that an entrepreneur research at least every quarter the cash flow statement.

g.

The statement of cash flow is identical to the declaration of sales except that it reports results of a business over a specific amount of time. The distinction is that the return account still incorporates some non-cash expenses, for example depreciation, into consideration. All this is omitted from the cashflow analysis, revealing just how well the business produced real revenue. Cash balance analyses illustrate how firms have handled capital inflows and cash outflows. It gives a better image of the capacity of a business to pay creditors and fund growth.

h.

If there is not enough cash on hand to cover the debt, it is entirely acceptable for a business which is proven successful according to accounting principles. The relation between the funds generated and the debt owed, called “operating cash flow ratio,” indicates the willingness of the organisation to offer loans and interest payments. If a small decline in quarterly cash flow will jeopardise the company’s capacity for debt payments, it is riskier than one which has a lower net income but a higher degree of cash flow (Aris et al., 2019).

i.

Contrary to the various forms in which reports may be seen, a corporation may do nothing to manage its currency. The cash-flow analysis reveals the whole tale in the absence of any overt theft. If the organisation has or does not have currency. In order to clarify its financial performance, investors can analyse closely the cash flow statement of each business.

j.

Companies offer dividends to shareholders and allocate wealth, which often shows revenue development in business health and profits. As share prices reflect future cash flows, future sources of dividends are included in share price and decreased models of dividends may help to analyse the value of a stock. Upon ex-dividend execution of a portfolio, the share price usually falls by the amount of the dividend payment to represent the non-permitting privileges of new shareholders. Dividends paid on equity will dilute dividends instead of assets, which can have a significant short-term effect on share prices.

k.

The WACCWACC is a weighted average cost of capital for a corporation that reflects the investments combined, like equity and debt. Companies generally use debt and equity blends to finance their operations, maximising the weighted average cost of capital for a company. This guide offers an explanation of what they are, why they are used, how they are measured and also includes a WACC calculator downloadable that is as low as possible (Paolone, 2020). That the sum of debt and/or equity utilised by a business to fund its activities and properties. A business’s financial structure, which a corporation deems correctly, would have an effect on cash flow statements.

l.

Accounting statements reflect the income of a business, but it is not the actual revenue produced by a corporation. Data from results can be skewed and deceptive. Therefore, the free cash flow a organisation produces to determine the company’s true financial situation is the subject of business decision makers and security analysts. In which of these statements free cash flow is better described? The surplus cash generated by sales, smaller than all operational costs Cash flow accessible to all investors after the firm has spent all fixed assets and working capital needed for the continued operations of the business.

2.

A detailed balance sheet report may usually provide a range of fast views. The assets must exceed liabilities and equity for balance sheets. In order to balance. Assets minus liabilities are known as the asset value or equity of the company by economists. In certain situations investors may also look at the company’s overall wealth, which also analyses liabilities and assets. Analysts generally focus for longer-term investments in the equity division of the balance sheet and how well a business handles short-term allegations (Gordon et al., 2017). The productivity of a company’s balance sheet is calculated by a number of ratio analysts. Among the most popular are asset sales, the accelerated amount, debt disposal, disposal rates, debt to cash, and debt to equity.

The financial statement for a corporation includes descriptions about the business’s income and its expenditures. In general, the overall activity of an organisation is explained in more granular depth. The financial statement usually displays a company’s primary, discretionary, and capital expenditures (Cyril et al., 2016).

Starting from start, the top line records a company’s performance for a given period of time. It displays the costs specifically connected to receiving the money. Primary expenditures are commonly divided into transaction expenses or distribution prices, which are actual consumer expenditures. Sales prices are adjusted to gross profit by deducting sales. Gross profit is also often evaluated to assess the gross profit margin of a business in addition to overall revenue.

3.

Borrowers will want to check both the company’s credit background (if the corporation is not a start-up) and your own credit history, since a small company loan also needs a personal guarantee. Dun & Bradstreet offers you a freely available business information report from your firm. If there is some tarnish on your credit report, you may be preparing to seek the inclusion of borrowers that have decent financial record but have not reported the transactions. If possible, find out what your prospective investor uses credit reporting company and ask the same organisation for a survey (Dhakal, 2019). More borrower information is added for a minimum fee in most credit offices. The main credit monitoring service is Dun and Bradstreet. If a secured loan is to be issued, security must be given. For a borrower, collateral is generally described as property that protects a loan or other obligation. Such that if you refuse to make reason, you refuse the loan or obligation such that if the loan is not secured. In start-up firms, the equity valuation of real estate is a popular source of leverage. The creditor will either take out a new mortgage or a second home mortgage. In certain nations, by maintaining land interests, the landlord may maintain a protection interest in real estate before the debt is completely charged.

In order to further minimise their harm, lenders typically lower the valuation of the collateral to not 100 percent of the maximum market value for the collateral.

Inventory: A seller will raise the demand for ready-to-use retail inventory to up to 60 % to 80%. An inventory of a producer comprising of product parts and other products may only be 30%. The main element is the inventory’s merchantability – how easily and how much money can be traded.

Loans receivable: Up to 75% of loans fewer than 30 days long are receivable. The creditor would usually “age” accounts receivable until they are given a date. The older the record, the lower the worth. Any lenders will not be informed of the age of the accounts until they run longer than 90 days and will therefore decline to fund them. Some loans extend the incremental valuation of the accounts such that, for example, accounts between the ages of 31 and 60 can only have loan-to-payment levels of 60% and accounts between the ages of 61 and 90 still have a ratio of 30%. The loan-to – value rating can also be influenced by account delinquencies and the general creditworthiness of the account debtors (Andreas, 2017).

Conclusion

There is a disparity in sustainability and positive cash flow operations. Only because a business spends cash does not mean that it generates a profit (and vice versa).

The cash flow statement varies from the rest of the financial statements, because they are used to deal with the other two statements. During the specified period, the cash flow statement documents the monetary transactions of the company (flows and outflows). It indicates if all profits reported on the statement of revenue is retrieved.

However, at the same period, the cash flow does not necessarily reflect all the expenses of the company because not all of the company’s expenses are automatically compensated (Chiladze & Kozmanashvili, 2019). Though losses may have existed by the corporation, all compensation for those obligations will only be reported as cash outflows until the transaction takes place.

References

Andreas, A., 2017. Analysis of operating cash flow to detect real activity manipulation and its effect on market performance. International Journal of Economics and Financial Issues, 7(1).

Aris, N. M., ANUAR, R., Trofimov, I., & Sokat, N., 2019. The Effect of Cash Flows on Firm’s Profitability of Construction Sector in Malaysia. UNIMAS Review of Accounting and Finance, 3(1), 31–39.

Chiladze, I., & Kozmanashvili, L., 2019. Actual issues of enterprise cash flow reporting.

Cyril, U. M., Lawretta, C. I., & Adakole, E. E., 2016. Effect of Cash Flow Statement on Performance of Selected Food Beverage Companies In Nigeria.

Dhakal, L., 2019. Cash Flow Statement Analysis between Commercial Banks (With Reference to Himalayan Bank Ltd. And Global IME Bank Ltd.). American Journal of Industrial and Business Management, 9(11), 2025–2033.

Gordon, E. A., Henry, E., Jorgensen, B. N., & Linthicum, C. L., 2017. Flexibility in cash-flow classification under IFRS: Determinants and consequences. Review of Accounting Studies, 22(2), 839–872.

Jeppson, N. H., Ruddy, J. A., & Salerno, D. F. (2016). The statement of cash flows and the direct method of presentation. Management Accounting Quarterly, 17(3), 1–9.

NGUYEN, D. D., & NGUYEN, A. H. (2020). The impact of cash flow statement on lending decision of commercial banks: Evidence from Vietnam. The Journal of Asian Finance, Economics, and Business, 7(6), 85–93.

Paolone, F., 2020. The Cash Flow Statement Under IAS/IFRS. In Accounting, Cash Flow and Value Relevance (pp. 5–21). Springer.

Schmutte, J., & Duncan, J. R., 2019. The Statement of Cash Flows Turns 30: Common Reporting Deficiencies and Recent Changes. The CPA Journal, 89(8), 6–10.

Introduction:

This assignment describes the significance and the role of an accountant related to his or her, work, job responsibilities, rights and attitudes towards his work. A proper survey and search will be done in the regards of analysing the key accounting roles and profile of an accountant related to ASX companies. This study will include the ways to describe the jobs of corporate accountants, financial accountants and including their duties, required skills and talents. A proper assignment structure will be given in this study, where it will provide knowledge of companies’ strategies to hire eligible and skilled accountants as per their requirements. The skills and requirements we need in an accountant will be considered in this study to progress the work profile. An accountant would be qualified and shortlisted as per their requirements and duties of the companies related to this corporate accountant job. An accountant job role should have contained all necessary attributes related to the development in this profile. 

 

  • Collection and details of job advertisement data and sources:

 

With effective research and survey, it can be said that there are around 5000+ accounting jobs on Indeed Australia. There are around 4578 job profiles related to financial and corporate accounting jobs to Seek Australia. Total 11265 profiles in Jora Australia related to Australian Accounting jobs. There is around 24863 accounting profile related to accountant jobs in Australia we can find in online job sites specifically in Jora, Indeed and Seek.

After the survey, the job information collected from different job sources such as Seek, Indeed and Jora. Total collected job information and details related to corporate accountants in Australia were collected from all these job portals are total 30.

Serial No.Source of Job corporate accountantsTotal job advertisement
1Indeed15
2Seek5
3Jora10

 

 

  • Name of the organisation and industrial Breakdown:

 

Name of the organisationsIndustrial BreakdownLocation
Intuitive Recruitment Recruitment IndustrySydney – NSW
Racing VictoriaMedia OrganisationDocklands VIC
Beach Energy LtdOil & GasSydney – NSW
MPAU FinanceFinance SectorBrisbane QLD
Hedley Scott RecruitmentRecruitment industrySydney-NSW
C CAR InstallationsManufacturing CompanySydney-NSW
WaterlogicManufacturing CompanyOsborne-Park WA
Pirtek Fluid SystemsFluid and HydraulicKings Park NSW
Doyle ExecutiveForeign affairsSydney NSW
DFP RecruitmentRecruitment AgencyKings Park WA
HR Matrix Pty LtdEmployment and recruitmentBrisbane QLD
KonnexusConsulting AgencySydney – NSW
Aldi StoresGroceriesKings Park
Talent Options SydneyHuman Resources Sydney – NSW
Mine SuperRecruitment AgencySydney Park
SuncorpBanking and FinanceSydney Park
Robert Half Financing and accountingFinance SectorKings Park NSW
Future youRecruitment AgencyBrisbane QLD
Paybang Pty LtdNot applicableSydney Park
Orbital Australia Fuel and gasBrisbane QLD
T+O+M executiveRecruitment firmOsborne-Park WA
TW Power Services Pvt. LtdEnergy and PowerSydney Park
Moore Stephens Pvt LtdFinance and AccountsKings Park NSW
Accent Resources NIFoodSydney Park
GFG AllianceEnergyBrisbane QLD
2X M FinanceFinanceOsborne-Park WA
Moir GroupFinanceBrisbane
Robert WalterRecruitmentSydney – NSW
DFp AccountingEnergySydney – NSW
Redpath Partners Pty LtdEnergySydney – NSW

 

 

  • Job title and the description mentioned in Job portal and advertisement:

 

Serial No.Job portalsJob ads & Titles
1IndeedCorporate Accountant, Senior Accountant-corporate, Assistant Accountant, Financial Investor, Accountant – corporate assistant.

Assistant accountant. Corporate accountant, financial accountant, Accountants, Assistant Corporate Accountant.

Treasury accountant, accounting payable clerk, Forensic Accountant

2JoraPayable Accountant, receivable Accountant, Corporate Accountant, Assistant Accountant – corporate.

Assistant accountant. Corporate accountant, financial accountant, Accountants, Assistant Corporate Accountant.

3SeekAssistant accountant. Corporate accountant, financial accountant, Accountants, Assistant Corporate Accountant.

Treasury accountant, accounting payable clerk, Forensic Accountant

Corporate Accountant, Senior Accountant-corporate, Assistant Accountant, Financial Investor, Accountant – corporate assistant.

 

 

  • Personal attributes needed in corporate accountant mentioned in job advertisement:

 

The personal attributed which are required in the corporate accountant mentioned in the job advertisement given below:

  • The person should have accounting skills and experience to pay attention and the ability to work under pressure.
  • The accountant has to carry interpersonal skills and excellent communication skills to maintain the relationship between accounting requirements and cost.
  • An individual should possess the intellectual skills, practical thinking, quick decision-making ability and ability to adapt to new challenges.
  • The person should be ambitious, creative, practical and should bring various initiatives to perform their responsibilities.
  • The person should be able to work with a team, coordinate with team members and seniors and work under pressure.
  • The person should be able to value their work, ready to give their 100% with devotion and dedication (Balakrishnan, et, al., 2018).
  • The individual should possess technical skills to make a decision quickly, should have positive and collaborative attitudes towards work.
  • The person should be strong practical and analytical skills to understand the requirements and needs of the company.
  • They should have a focus on minor changes and requirements that help them to create logical solutions.
  • An individual should possess the ability to motivate the people and their team in the organisation.
  • The person should be able to communicate clearly and have a spirit to drive a team.
  • They should possess an ability to figure out the things and play a dynamic role as a team player to encourage their team regularly.
  • An i
  • ndividual should be able to handle responsibilities and meet the deadline of the organisation and department.
  • The person should be passionate about their work and task to help the team and department to achieve targets and goals.
  • The person should be target solver, practical thinker, capable to handle pressure and able to handle the situation related to clients and stakeholders.
  • Must have the ability to become a corporate supportive and creative thinker, good leader and supporter for others in the team member (Ellis, 2018).

 

  • Key roles and task and job responsibilities of corporate accountants given in the advertisements:

 

The listed task and job required responsibilities given in the job advertisement for a corporate accountant is given below:

  • Financial and accounting reporting is required to be done monthly, quarterly and annually.
  • A person needs to complete all bookkeeping tasks, taking care of financial data and implication effectively.
  • To prepare the financial report, balance sheet and consolidated statements of accounting books of the organisation.
  • Able to handle SAP – different accounting modules.
  • To prepare and present bookkeeping and handle the complete valuation of business entities.
  • Compiling bank statements and accounting records of the company.
  • The corporate accountant needs to join the team as soon as possible and perform a different role in a team.
  • Looking for a person who can understand business accounting needs and bale to perform financial reports and transactions effectively.
  • Ability to define mistake and figure out the errors in transactions, hands-on-experience of using Different SAP modules and financial software and accounting systems.
  • Ability to figure out treasury and tax accounting management effectively to measure data and financial evidence.
  • Seeking for experienced and hardworking employee and the candidate who can timely process the requirement, accounting process, delivery and information.
  • The person who assist their senior and support junior in the team.
  • Ability to understand the attend recurrent financial and accounting journals and vales.
  • Preparing financial statements, applicating various accounting rules and regulations.
  • Able to implicate accounting standards and regulate the budgeting process, it will be helpful for the company to manage finance by the council (Adhariani, et, al., 2019).
  • Understand and govern complex demands of accounting norms and standards-based financial process.
  • Working with seniors, able to give reporting timely to provide effective accounting solutions and decision-making process in the business.
  • The person should be able to manage than the requirement of accounting department with the help of accounting standards and corporate norms (Allen, et. al., 2018).
  • He can work and perform well to support the accounting department to provide quality services to the organisation.
  • Maintenance of accounting software, SAP and create logical analysis to give accurate feedback about the financial condition of the companies.
  • Able to prepare and, making journals, posting ledgers perform ledgers and compiling data with the other relevant adjustments. 
  • Handle all mandatory regulations, preparing analytical reports, submitting the consolidated financial reports and statements to the company (Ellis, 2018).

 

  • Professional and accounting qualification needs to be posted in the job advertisements:

 

The various academic and professional qualification needs are addressed in the job portals related to corporate accountants:

  • The person should possess a degree of Bachelors in Accounts and Finance, should have completed CA and have more than 3 years of experience practising as a qualified CA.
  • The person should be well experienced and depth knowledge of financial regulation, accounting and taxation amendments occurred every year (Nasr, et, al., 2018).
  • Should be possessed depth knowledge of accounting standards and have hands-on experience working with accounting firms for more than 3 years (Owolabi, 2019).
  • An individual should have well experience in tertiary qualification in accounting and knowledge of the field of finance and accounts.
  • Ability to understand the attend recurrent financial and accounting journals and vales.
  • Preparing financial statements, applicating various accounting rules and regulations.
  • Able to implicate accounting standards and regulate the budgeting process, it will be helpful for the company to manage finance by the council (Adhariani, et, al., 2019).
  • Understand and govern complex demands of accounting norms and standards-based financial process.
  • Working with seniors, able to give reporting timely to provide effective accounting solutions and decision-making process in the business.
  • The person should be able to manage than the requirement of accounting department with the help of accounting standards and corporate norms (Allen, et. al., 2018).
  • He can work and perform well to support the accounting department to provide quality services to the organisation.
  • Looking for a person who can understand business accounting needs and bale to perform financial reports and transactions effectively.
  • Ability to define mistake and figure out the errors in transactions, hands-on experience of using Different SAP modules and financial software and accounting systems.
  • Ability to figure out treasury and tax accounting management effectively to measure data and financial evidence.
  • Seeking for experienced and hardworking employee and the candidate who can timely process the requirement, accounting process, delivery and information.
  • A person should possess knowledge of Microsoft offices and access.
  • Should be able to understand the accounting requirements and prior qualification and experience in the field of cost accounts. 
  • Knowledge and experience of an audit or chartered accounting process should be able to adapt to handle the work of 1000+ people (Owolabi, et, al., 2019).
  • The person should have the ability to qualify the accounting aspects and can prepare a financial statement and working experience with SAP.
  • Experience in the areas of Taxation handling, profit and expenses records and handle deferred tax calculations.
  • SAP, ORACLE and TM1 is the plus. An individual can handle taxation and budgeting responsibilities of the company, able to work to enhance the rapport of the company. 

 

  • The key roles learnt in MPA unit and the terms related to the advertisement collected:

 

There are various tasks, roles and job responsibilities collected in job advertisement from different job portal in Australia which is necessary for a corporate accountant to possess such as responsibilities and roles. These are:

Managing financial data: 

As per task learnt in the unit, this is the initial task of an accountant to manage its corporate roles and responsibilities. The role of an accountant includes various categories such as preparation and presentation of reports and accounting data, handle bookkeeping and organisational structure part related to tax, budget, cost and revenue. The corporate accountants need to take care of accounting systems, manage records, books and vouchers efficiently. The corporate accountant has to manage to cost and figure out actual financial conditions through the financial report prepared quarterly, annually and monthly (Nasr, et, al., 2018).

  • Preparing financial statements and reports according to various accounting standards and rules.
  • Working as a helping hand in an operational and financial matter to create accurate and exact financial capital reports for investor and stakeholders. It helps the council and other people in the department to complete the budgeting process effectively.
  • Managing financial evidence, vouchers and invoices using SAP and TM1 software for accurate and error-free ledger and journals for the department (Schroeder, et, al., 2019). 

Accounting report preparation:

The next of the Accountant incorporate field is to figure the errors and mistakes while making and preparing accounting report, an accountant takes care of vouchers, invoices and other accounting transactions and entries should be transacted based on evidence and proves, financial and accounting report are prepared essentially on monthly, quarterly and annual basis. The report needs to be prepared error and mistakes free after taking care of different accounting principles such as dual aspects principles, accrual principle and principle of consistency for the business (Okwuosa & Amaeshi, 2018).

  • Preparation and presentation of profit and loss accounts.
  • Compiling and consolidating the financial accounts and budgeting process.
  • To prepare the report and present analytical report in the group before submitting consolidated financial results to the German Group.

Regulatory and financial bodies:

The corporate accountant should be taken care of their responsibilities of handling accounting standards, performing accounting deadlines without missing internal and external deadlines. Regulatory bodies make accounting norms and standards which are needed to be resolved and performed on time with the help of accurate and qualified data (Wardhana, 2018).

  • The person should have the ability to exercise the responsibilities, manage accounting data and financial costs (Adhariani, et, al., 2019).
  • Able to compare projected and actual financial report according to accounting principles and standards.
  • Can prepare analytical reports after submitting a report to meet the deadlines.
  • Consolidation of financial and accounting data within the organisation (Ellis, 2018)

 

  • Additional topic missing in Unit MPA but those are listed in the Job description of Corporate accountants:

 

Missing points in MPA units are:

 Analytical advisor:

The corporate accountants should be able to handle the analytical task and give analytical advice to the necessary team. The information they can use to manage the logical demands of finance for the existence of the business. Corporate accountants should work as a logical and analytical advisor so that management can use their skills in making financial decisions effectively (Crowther, 2018). 

  • The person should have technical skills to take technical decision based on accounting abilities.
  • A person should be interpersonal skills to motivate team members and prepare financial accounts quarterly and annually.
  • Should be responsible to handle group accounting meetings, take decision-related to statutory matters of compliance, ASX reporting and accounts investors listing.
  • Responsible to assist corporate trainers, CA and higher accounting authorities.
  • Give assistance and support to finance managers, provide authority and quality services in accounting services (Warren & Jones, 2018). 

External business targets:

The corporate accountants should be able to work accounting professionals, they should understand the requirements of business affiliations and. Financial professionals expect from financial experts to perform their roles and responsibilities in regards to ASX reporting, handling the accounting process of the organisation. 

The accountant should have abled to handle and engage in maintaining financial transparency. The example of such job description is given below:

  • The person should be able to prepare analytical skills and financial reports.
  • Understand the needs of transparency of financial information that involves business changes, financial innovative skills and ability to understand business needs. (Balakrishnan, et, al., 2018).

 

  • Skills, responsibilities and attributes needed to become a corporate accountant:

 

Innovation

Accounting standards and principles are needed to be implemented in the business from the first day it started. Innovative and creative ideas are necessary for the business to handle the cost and revenue generation process. Corporate accountants should have skills and attributes to understand business challenges and give analytical advice to the company. Innovation is necessary for ideas, views and business which is mentioned in the job description for the accountants that states and delivers the needs of innovation skills in employees (Smith, 2018).

Understanding of accounting norms:

The corporate accountant should be able to handle accounting work based on his analytical The next of the Accountant incorporate field is to figure the errors and mistakes while making and preparing accounting report, an accountant takes care of vouchers, invoices and other accounting transactions and entries should be transacted based on evidence and proves, financial and accounting report are prepared essentially on monthly, quarterly and annual basis (Pal, 2019).

Enthusiasm:

The corporate accountant should have a responsibility to show enthusiasm in their jobs and able to encourage their team members in the organisation. Accountants should have practical thinker and problem solver that add power to their duties. The person should have brought energy and enthusiasm to their team members and enhance the engagement of accounting skills. The person should have the ability to exercise the responsibilities, manage accounting data and financial costs. Able to compare projected and actual financial report according to accounting principles and standards. Accountants can prepare analytical reports after submitting a report to meet the deadlines & consolidation of financial and accounting data within the organisation (Schroeder, et, al., 2019). 

Conclusion

The role of an accountant includes various categories such as preparation and presentation of reports and accounting data, handle bookkeeping and organisational structure part related to tax, budget, cost and revenue. The corporate accountants need to take care of accounting systems, manage records, books and vouchers effectively. This study included different ways to describe the jobs of corporate accountants, financial accountants and including their duties, required skills and talents. A proper assignment structure has been given in this study, where it will provide knowledge of companies’ strategies to hire eligible and skilled accountants as per their requirements. The skills and requirements we need in an accountant were considered in this study to progress the work profile. An accountant was to be qualified and shortlisted as per their requirements and duties of the companies related to this corporate accountant job (Allen, et. al., 2018).

References

Allen, A. M., Ramanna, K., & Roychowdhury, S. (2018). Auditor lobbying on accounting standards. Journal of Law, Finance & Accounting, Forthcoming.

Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial accounting theory and analysis: text and cases. John Wiley &Sons.

Smith, M. (2018). Luca Pacioli: The father of accounting. Available at SSRN 2320658.

Warren, C., & Jones, J. (2018). Corporate financial accounting. Cengage Learning.

Balakrishnan, K., Blouin, J. L., & Guay, W. R. (2018). Tax aggressiveness and corporate transparency. The Accounting Review94(1), 45-69.

Crowther, D. (2018). A Social Critique of Corporate Reporting: A Semiotic Analysis of Corporate Financial and Environmental Reporting: A Semiotic Analysis of Corporate Financial and Environmental Reporting. Routledge.

Nasr, M. A., & Ntim, C. G. (2018). Corporate governance mechanisms and accounting conservatism: evidence from Egypt. Corporate Governance: The International Journal of Business in Society18(3), 386-407.

Ellis, C. (2018). Why ambitious corporate accountants should extend their role beyond finance. Professional Accountant2018(32), 24-24.

Okwuosa, I., & Amaeshi, K. (2018). Sustainability reporting and the professional accountant in Nigeria.

Adhariani, D., Siregar, S. V., & Yulius, R. (2019). Borderless with Unequal Opportunity? Experts’ Perspectives on the ASEAN Economic Community and the Impact on Indonesian Accountant Profession. The Qualitative Report24(5), 1147-1167.

Pal, N. R. (2019). Corporate Governance-Mapping and Imaging the Swot on Real-Time a Bare Minimum in Assurance to Growth and Sustainability. The Management Accountant Journal54(2), 40-45.

Owolabi, S. A. (2019). Quality Accounting Service a Panacea to Effective Corporate Governance. Available at SSRN 3382381.

Wardhana, D. Y. (2018). Good Corporate Governance Practices in Family Business: A Case Study in Indonesia. Petra International Journal of Business Studies1(1), 35-44.

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