Select two public limited companies listed on the Australian Securities Exchange (ASX) that are in the same industry. Go to the website of your selected companies. Then go to the Investor Relations section of the website. This section may be called, -Investors-, -Shareholder Information- or similar name.
In this section, go to your companies' annual reports and save to your computer your firms' latest annual reports consecutively for last three years. Do not use your companies' interim financial statements or their concise financial statements. Please read the financial statements (balance sheet, income statement, statement of changes in owner's equity, cash flow statement) very carefully. Also please read the relevant footnotes of your companies' financial statements carefully and include information from these footnotes in your answer.
You need to do the following tasks:
OWNERS EOUITY (5 Marks)
(i) From your companies' financial statements, list each item of equity and write your understanding of each item. Discuss any changes in each item of equity for your firms over the past year articulating the reasons for the change.
(ii) Provide a comparative analysis of the debt and equity position of the two firms that you have selected.
CASH FLOWS STATEMENT (5 Marks)
(iii) From the financial statement of your chosen companies, list each item reported in the cash flows statement and write your understanding of each item. Discuss any changes in each item of cash flows statement for your companies over the past years articulating the reasons for the change.
(iv) Provide a comparative analysis of your companies' three broad categories of cash flows (operating activities, investing activities, financing activities) and make a comparative evaluation for three years.
(v) Also provide a comparative analysis of the two companies that you have selected explaining the insights that you can get from the comparative analysis.
(xiii) Was there any increase or decrease in the deferred tax assets or in the deferred tax liability reported by each of your selected companies?
(xiv) Please calculate the cash tax amount for both companies using the book tax amount, changes in the deferred tax assets and deferred tax liability (please do your own research for your better understanding of these concepts and the method of calculating the cash tax amount the book tax amount.)
(xv) Calculate the cash tax rate for both companies. Which company has higher cash tax rate? (Please do your own research to familiarise yourself with how to calculate cash tax rate).
(xvi) Why is the cash tax rate different from the book tax rate?