Assessment 1 : Steps 3-6

Step 3:

When reading through MaxiPARTS 2022 annual report I first noticed that it was slightly longer than other company’s annual reports I had briefly looked at, with it being 86 pages long in total. Along with the standard information normally found in an annual report, such as reports from the chairman and directors, a business overview and the company’s financial reports, MaxiPARTS 2022 annual report also contains information on their Truckzone Group Acquisition. On page 8 of the report it describes their Asset Sale Agreement with Truckzone Group (made February 1st 2022) to acquire the businesses known as Truckzone, Coburg Truck Parts and Parts Peek. According to MaxiPARTS this significantly expanded their operations and was the first major strategic growth project since the MaxiPARTS business separated from the Trailer solutions business in August 2021. Page 12 of the report also 

explains their online acceleration in the adoption of e-Commerce through launching a new e-commerce platform. After reading about this acquisition and new platform, it will be interesting to see if any differences can be seen in this year's financial reports. 

 

When reviewing MaxiPARTS financial statements it seems like the company is slowly going through economic growth. Although their total equity has declined over the past 3 years, going from $112,505 (after restatement) at the 30th of June 2019 to $79,559 on the 30th of June 2022, their net assets and total comprehensive income have increased. MaxiPARTS net assets have significantly increased from $13,650 in 2019 to $79,559 in 2022 and their total comprehensive income has increased by $12,739 since 2019. Although their comprehensive income has increased, for 2022 they still had a total comprehensive income loss of $4,843, which may indicate that further financial strategies to increase income could be put in place. Overall, I would say the financial statements provided by MaxiPARTS are of high quality as the information given seems relevant for not only those inside of the company, but also the general public and shows a faithful representation of their financial position. 

 

When looking at some of the firms that other students receive and the way in which those firms present their financial statements, it was evident that there were many similarities between them. For example, when looking at the financial reports for the companies; ‘MMA Offshore’, which provides transport services, I noticed that their layouts and headings for their ‘Consolidated Statement of Changes in Equity’ and ‘Consolidated Statement of Financial Position’ were almost identical to those for MaxiPARTS. The main difference was that since they are in a different industry, many of their sections in their ‘Consolidated Statement of Profit or Loss and Other Comprehensive Income’ were different, such as they had columns dedicated to expenses for things such as vessels and subsea. 

 

In contrast, the company Coles (a retail firm), had quite a few differences in their financial reports. For example, their reports for the year ended as of the 25th of June, rather than the 30th of June, which most other companies used. While the actual layouts and headings for the reports were all similar to that of MaxiPARTS, the names also slightly differed, with their ‘Consolidated Statement of Financial Position’ being ‘Balance Sheet’ and their ‘Consolidated Statement of Profit or Loss and Other Comprehensive Income’ simply being called ‘Income Statement’.

 

Overall I am happy with my given firm: MaxiPARTS. Their annual reports were easy to navigate and find on their website, and the way in which their financial reports were laid out made it simple/ easy to read and understand. Therefore at this stage I have no concerns about my ability to complete the assignment.

 

Check out my blog post: ‘My Company - MaxiPARTS’ (available here:  https://jordanpedwards.wixsite.com/my-site-1/about-5) for some background information on my given company, as well as some information on MaxiPARTS’ competitors in the industry.

 

• *Waiting on feedback from Studiosity* Comment on how you found the support you gained from Studiosity. Did you find the support useful, or not? Would you use the Writing feedback support of Studiosity again? Why or why not? 

 

My 3 favourite blogs from classmates in ACCT11059 would be:

 

Gabe Cipreanu’s Blog: https://gabrielcipreanu6.wixsite.com/my-site-1 

I like the simplistic, monochrome layout of this page as not only does it make it easy to read, but it also makes it aesthetically pleasing. The headings at the top of the page also make it super simple to navigate.

 

Sandra Voll’s Blog: https://sandravoll4.wixsite.com/my-site/home 

I like the way Sandra has laid out her blog, especially how she has a separate page for each one of her topics such as her assignments, about info and her company. I also enjoy her gallery section and think it adds a nice personal touch. 

 

Emma Rach’s Blog: https://emmarach0.wixsite.com/the-stressed-student/blank-1 

Emma’s Blog would have to be my favourite. I really enjoy the comedic aspect of her page and her ‘About’ section was informative and fun to read. The layout of her pages also made it really easy to read and navigate around.

 

Step 4:

Click Below to see the excel spreadsheet for my company’s financial statements

 

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Step 5:

Thoughts while reading - Chapter 2: ‘Understanding the Game’

When reading the beginning of chapter 2, I was surprised to learn that prior to the late 19th century, a firm’s financial statements were usually private to a firm and not something appropriate for public discussion. With ‘the business activities of firms affecting many more people outside the firm, such as its employees, customers, suppliers, competitors and the general community’, it makes me wonder why it took so long for this financial information to become publicly available. It also makes me question how people made financial decisions (such as investing) if this information wasn’t available to them. I also found it interesting that the ‘Generally accepted accounting principles’ (GAAP), comprises thousands of pages of material from the AASB, ASIC and ASX and that these rules are constantly changing. As stated in chapter 2 “There is no way any one person can know all these rules and these written rules are not even all the rules”. With this statement, a key question comes to mind; how do people in accounting abide by all these rules and regulations when it isn’t possible to remember them all, especially with the rules also gradually changing?

 

Prior to reading chapter 2, I had not heard of ‘the going concern assumption’ (the assumption that a firm will continue to operate into the foreseeable future). Although it makes sense to assume that a company will continue its operation, after learning about the example of Ansett Airlines after the incident of 9/11, it makes me wonder if a ‘worse case scenario’ could possibly be included somewhere in a firm's annual reports. I know that many companies would not want to show the public this kind of information, as it’s not a completely positive view of the company, but it would be a relevant and faithful representation and could enhance/support the usefulness and the quality of information in their financial reports. I found the quote that was used by Peter Druker in this chapter quite useful in understanding the meaning of quality: “Quality in a product or service is not what the supplier puts in. It is what the customer gets out ... what is of use to them and gives them value. Nothing else constitutes quality”. 

 

Thoughts while reading - Chapter 3: ‘Introducing Financial Statements

I found the first quote by Richard Loth as an interesting but insightful way of explaining a firm's financial statements: “The financial highlights offered at the beginning of the report tend to focus on what they (the company) want you to see—but that’s just an appetiser. The second course—the big plate of meat and potatoes— is the financial statements”. When first looking at a few different company’s annual reports (such as MaxiPARTS, Coles, etc.), I found it quite odd that there were so many ‘promotional looking’ photos and overly optimistic (and a lot of the times non-relevant) comments from the higher ups of the company. However, after reading in this chapter that a firm’s annual report is often used as a marketing document, it makes a lot more sense. Considering that a lot of the people viewing these documents are current or potential investors, consumers, employees, etc. it makes sense that the business would use this to influence the behaviour for these people. I also found it confusing when I saw that some companies didn’t end their financial sheets on the 30th of June, as I had assumed that all companies in Australia would balance at the end of the financial year. Therefore it was beneficial to read in this chapter that a firm’s balance date can be any date, so there can be a range of balance dates used by different companies.

 

It was also interesting and beneficial to learn about why changes in cash balances for each year have their own specific financial statement, while other assets don't. I had assumed that a large loss in money/assets (cash or otherwise) could put an end to a business, so it was interesting to read that the only way a business/individual can go broke or go into liquidation is to run out of just one of its assets: cash. Reading the example of trying to pay employees with assets (such as chairs, or cabinets), however, made this statement of 'no other asset on our Balance sheet has the same negotiability as cash’ make a lot more sense. I had also heard of the term present value (PV) before, but I had realised when reading the chapter that I wasn’t completely sure of what it meant. So when I read ‘Would you like this $20 note now, or in five years’ time?’ I instinctively agreed with the majority of preferring the money now, but wasn’t really sure why this was so. Learning that dollars today are generally worth more to us than the same amount of money in the future, made the fact that ‘the value of money we expect to get in the future is reduced when compared to its present value to us today’ understandable. This also made it easier to understand the discounted dividend (DD) model (equity value = PV of expected future dividends).

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Step 6:

• Leave feedback for 3 drafts

• Comment on whether the feedback you received from others was useful, why or why not