Financial Analysis Jiajiafu Modern Agriculture Ltd †Free Samples

Question: Discuss about the Financial Analysis Jiajiafu Modern Agriculture Ltd. Answer: Understanding Financial Statement 1.Jiajiafu Modern Agriculture Ltd is a holding company involved in production and supply of organic vegetables in the China market along with its subsidiary Qingzhou Jiajiafu Modern Agriculture Group Co Ltd. The company is involved in undertaking new innovation in agricultural field through the use of latest technology products in fruit and vegetable farming, harvesting, packing, marketing, supply and distribution. The major products of the company such as tomatoes, chilies, radish etch are sold to wholesale retailers and supermarkets. The company was established in the year 2011 and is headquartered in New South Wales, Australia (pp.09-11). The total share capital of the company is $ 20,823 and its share price is 0.18 AUD $ (Jiajiafu Modern Agriculture Limited, 2016, pp. 56) 2.The name of the auditing firm is BDO Corporate Finance (Jiajiafu Modern Agriculture Limited, 2016, pp.68). 3.As stated in the notes to the financial section of the annual report of the company, its financial statements are prepared on the basis of Australian Accounting Standards Board (AASB) accounting policies and conventions. It has also been declared that the financial information disclosed in the annual report also complies with International Financial Reporting Standards developed by International Accounting Standards Board (IASB). The company has adopted historical cost convention in developing the financial statements as per AASB rules and is measured at fair value at each balance date (Jiajiafu Modern Agriculture Limited, 2016, pp.61). 4.The financial information of the company for the latest two years is stated as follows: FY 2015 FY2016 Total revenue 28,100 17,539 Gross Income 4,051 2,453 Profit before tax 1,094 718 Net Profit after tax 1,094 718 (All financial figures in Australian Dollar) (Jiajiafu Modern Agriculture Limited, 2016, pp.54) 5.The amount of assets for the latest two years is stated as follows: FY 2015 FY2016 Total assets 28,000 42,392 Current assets 11,000 18,914 Non-current assets 17,000 23,478 (All financial figures in Australian Dollar) (Jiajiafu Modern Agriculture Limited, 2016, pp.56) 6.The amount of liabilities for the latest two years is stated as follows: FY 2015 FY2016 Total liabilities 4,770 5,308 Current liabilities 4,070 5,041 Non-current liabilities 0.70 267 (All financial figures in Australian Dollar) (Jiajiafu Modern Agriculture Limited, 2016, pp.56) 7.The inventory is measured at lower cost or at net releasable value as per AASB standards (Jiajiafu Modern Agriculture Limited, 2016, pp.53). 8.The property, plant, equipment is stated at historical cost less accumulated depreciation and impairment. The depreciation is calculated through the use of straight-line basis that involved writing off the net cost of properly, plant and equipment as per their expected useful lives. The reported estimated lives of each of the non-current assets are as follows: (Jiajiafu Modern Agriculture Limited, 2016, pp.63). Buildings and plant facilities 5-50 years Green house 5-20 years Office and other equipment 3-10 years Leasehold improvement over the lease term Motor vehicles 8-10 years 9.The intangible assets reported in the balance sheet include goodwill and intellectual property. The estimated useful life of intangible assets is calculated at cost less amortization and impairment and is reviewed annually (Jiajiafu Modern Agriculture Limited, 2016, pp.63). 10.Ratios Current Ratio: Current Assets /Current Liabilities Year 2015: 2.70 times Year 2016: 3.76 times (Page 54 to 56 of annual report) Debt Ratio: Debt/Total Assets Year 2015: 0.17 times Year 2016: 0.006 times (Page 54 to 56 of annual report) Inventory Turnover Ratios: Cost of Goods Sold/ Average Inventory Year 2015: 40.67 times Year 2016: 150.06 times (Page 54 to 56 of annual report) Days in Inventory: 365 /Inventory Turnover ratio Year 2015: 8.97 times Year 2016: 2.43 times (Page 54 to 56 of annual report) Acid test Ratio: Quick Assets/Current Liabilites Year 2015: 2.557 times Year 2016: 3.75 times (Page 54 to 56 of annual report) Reference Jiajiafu Modern Agriculture Limited. 2016. [Online]. Available at: https://www.jjfma.com/image/zg/JJF%20-%20Replacement%20Prospectus%20(Typeset%20version)-3120109-v1-SYDDMS.PDF [Accessed on: 12 May 2017].