Dear Mr. Colin, As per the requirement of the unit and with you approval, I hereby enclosed the detailed analysis of the financial statements of ‘Billabong International’, considering the period starting from 2004 to 2008.Company’s mission, vision, product and service and business strategies will give an overall picture about Billabong Limited. The profitability, liquidity and financial stability ratio calculations can be used to understand the financial position of Billabong. Some of those calculations are useful to compare the company with its competitors. The final part of the report is concentrated on identifying significant accounting policies, earnings management, and corporate social responsibility of Billabong International.
My effort was to produce the report according to your provided outline and hopefully, it will satisfy the requirements. With best regards, Yours sincerelyKhadiza Amin(ID: 10035467)Executive SummaryThe report provides an analysis of the financial statement of Billabong International. This report is divided into three basic parts. The first part of the analysis consists of a background summary of the company’s products and services, its mission, and the strategic position of the company in relation to its competitors etc. It was found that Billabong International is a retail company made up of a number of businesses, which conduct its operation with a number of different brands.
The company always focuses on continuous cost reduction with the help of its supply chain. An analysis of the company’s profitability, liquidity, and capital structure has been done in part two, on the basis of the annual reports from 2004 to 2008. The analysis shows the financial position of the company and in some instances, comparison with its competitors reveals that the company is ahead of its competitors in different ways.
This part also includes the economic factors that have impact on the company’s financial performance together with any other factors that could affect the company’s overall performance. Comments on the auditors’ report have been made, and their independency and followed procedures have been discussed as well. It was found that the auditors’ independency was ensured and the audit was done according to the regulations. The final part of the report covers a number of areas. The annual report of 2006 is the consolidated entity’s first full year financial report prepared in accordance with Australian Accounting Standards, being AIFRS and AASB.
Some of the accounting policies have been discussed, which can affect the financial position substantially. Earning management was detected, while the earning quality was considered. An effort was given to identify the corporate social responsibilities of the company. Billabong International recognises the impact of its operation on the environment and society, and try to take steps in cost-effective manner. Table of ContentsContentPage No. Part OneIntroduction 6History7Mission Statement7Product and Brand Summary8Competitors11Strategic Position12Corporate Management12Part TwoCompetitive Strategy13Factors that could affect the financial performance14Financial Analysis17Profitability Ratios18Liquidity Ratios23Gearing Ratios for Capital Structure25Activity Ratios27Book Value and Market Value30About Auditors’ Report32Part ThreeFactors Influencing Management Decisions33Key Accounting Policies35Intangible Assets39Inventories40Revenue Recognition41Borrowings42Quality of Financial Information42Corporate Governance46Earning Quality52Corporate Social Responsibility54Conclusion55Appendix56References61PART ONEIntroductionBillabong International is a public limited company engaged in the marketing, distribution, wholesaling and retail of swim sports apparel and accessories under different brand names.
The major clientele for the company are the individuals who engage in surfing and swimming. The company’s 2007-08 Annual report shows that the company generated revenue of ASD$1.354 Billion with a staff strength of 3,500.
The company has its headquarters at Burleigh Hills and current operations are being done in five countries: Australia, Japan, North America, New Zealand, Europe, and Brazil.