ASS#1 Draft

Following is my draft ASS#1, sorry I couldn't work out how to make it an attachment. I look forward to working with you all...

Step 1

My blog:  http://theadventuresoftanyahoward.blogspot.com.au/

I have found the experience of creating my blog interesting, challenging and enjoyable. It is not something I have ever done before although had heard plenty of information and stories about “blogs”.

 

I think it is great that this course has stepped outside the realm of “normal” university courses and has involved processes such as blogging and Peerwise. As a Flex student it makes me feel that I am not alone and there are many other students going through the same experiences as me. The greatest feature of this assignment is the requirement to add a photo to our student profiles, there are many faces in this course that were once just names with no meaning.

My top 3

Hi everyone, I have spent lot of time looking at everyone’s blogs – there are some great blogs out there, keep up the good work. It has been interesting to read the broad profile of students enrolled in this course as well as the diverse list of companies that we have been assigned.

I think I have found my top 3 blogs, they are:

Monica Ferguson – Cyanhomes. I liked this blog as it had a catchy theme (dream home), the links between blog posts were easy to follow and I got the impression that Monica is a great person with a great personality. Monica’s blog can be found here: https://cyanhomes.wordpress.com/2015/03/02/hello-world/

Natasha Mills – firstly, who doesn’t love Ron Burgundy. I enjoyed viewing Natasha’s blog with a catchy theme, informative posts and I sensed a gentle nature. Natasha’s blog can be found here: http://millsycqu.blogspot.com.au

Kailee Jephcott – a blog with a great layout that is very informative.  I look forward to reading more. Kailee’s blog can be found here: https://kaileejephcott.wordpress.com 

After announcing my top 3 blogs, I have left comments on each blog, letting them know that I have rated them in my top 3 as well as inviting each blogger to view my blog. Natasha kindly accepted my invitation and has left a comment on my blog.

Step 2

My company: Cardno Limited

 

My company is a professional infrastructure and environmental services company, with expertise in the development and improvement of physical and social infrastructure for communities around the world. In 2015 Cardno celebrates 70 years of operations.

Cardno originated in Brisbane in 1945 as a small engineering consultancy known as Cardno & Davies – contributing significantly to the development of Queensland – Cardno now has more than 8,000 staff worldwide delivering physical, environmental and social infrastructure projects in more than 100 countries.

Having an office in my hometown of Bundaberg makes this company interesting and 'real' to me.  There are various projects that Cardno have been involved in from town planning to dam construction, theme park design and the development of Brisbane's Southbank complex, there does not seem to be much in between that Cardno has not dealt with.

I look forward to learning more about my company, and digging a little deeper into the facts and figures. 

On further research of Cardno I have found that the company is currently involved in some unwanted media attention. There have been claims of questionable payments in the Ecuadorian part of the company, click here to read more: http://www.afr.com/business/infrastructure/cardno-knew-of-questionable-ecuador-payments-as-early-as-january-acting-ceo-graham-yerbury-20150303-13tda2  or    http://www.couriermail.com.au/business/cardno-calls-in-investigators-after-raising-alarm-about-payments-tied-to-contracts-in-ecuador/story-fnihsps3-1227245227865.

Also, this revelation comes at a difficult time as in the last few months they have not only lost one-third of their share-price they have also lost their Chief Executive Michael Renshaw.

 

 

Summary KCQs for Cardno Limited’s Annual Reports

Firstly, on inputting Cardno’s figures into my Company Spreadsheet I noticed that Cardno’s profit growth has slowed to a steady rate in recent years since nearly doubling between 2011 and 2013. I continued to read on and within the Chairman’s Statement, it is stated that economic conditions around the world have not encouraged growth, particularly in the construction and engineering sectors. This is noted as the primary factor for affecting profit performance. I think the comment would appear in many Annual Reports for engineering and construction firms such as Cardno, not only is the world economy still recovering from the GFC, there has been a significant slowdown in the mining and resource sector.

 

I found it interesting that Sir Peter Cosgrove was once a Non-Executive Director of Cardno.  The 2014 Annual Report sites his reason for standing down was his appointment as Australia’s Governor-General. Cardno is a company I had not heard of prior to this assignment, to have such a high profile representative on the Board highlights to me the size and reputation of this company.

 

In 2012, Cardno was added to the ASX200. This intrigued me to find out what this means … Cardno Limited is one of Australia’s top 200 companies, I feel like I should have heard of them prior to this assignment.

Cardno is most definitely a global company – operating in over 100 countries encompassing over 104 languages – wow.

 

Financials

As I mentioned, Cardno has seen significant growth since 2011 although I can’t help but notice that Basic Earnings per share and Diluted Earnings per share has reduced. I found the following statement within the 2014 Annual Report providing a reason for this:

 

Basic earnings per share (EPS) was 52 cents, a reduction of 5.5 per cent from the FY2013 results of 55 cents per share. EPS was impacted by the increased number of shares on issue following equity raised and issued for major acquisitions and the broadly flat financial performance of the Group.

Cardno has undergone significant growth, expanding and acquiring new sectors globally, therefore reduced EPS is not necessarily alarm bells for the company, rather it reflects the growth of parent company.

This left me to ponder the difference between basic earnings per share and diluted earnings per share. I consulted the internet and learnt that diluted earnings per share is a performance equation used to gauge the quality of a company's earnings per share if all shares and potential shares were exercised. Earnings per share is calculated by dividing the company's profit by the number of shares outstanding and a big difference in a company's EPS and diluted EPS can indicate high potential dilution for the company's shares.

After continuing, there was a note (well, there are many notes) alongside Income Tax Expense, interested, I found that the effective tax rate for FY2014 was 26.8 per cent as compared to 27.3 per cent in FY2013 although the income tax expense did increase slightly as a reflection of the slight increase in profit.

 

Cardno has declared a 17 cent fully franked final dividend for 2014, therefore the full year dividend equals 36 cents per share. After conducting further research into Cardno I found, as mentioned within my blog, that Cardno is currently experiencing a dramatic drop in their share price after allegations of corruption within their Ecuadorian counterpart. I believe that Cardno’s 2015 Financial Reports could prove an interesting read.

 

Cardno Annual Reports

Cardno’s Annual and Financial Reports can be found by clicking this link: http://www.cardno.com/en-au/InvestorCentre/Pages/Financial-Reports.aspx?DocumentCategory=finance report

 
Facebook

I am not a user of Facebook therefore I have not had any group discussions using this medium.

Step 3

Please refer to my Excel spreadsheet.

Step 4

Chapter 1

My questions:

I can’t help but wonder, in the wake of Cyclone Marcia, how many of the businesses mentioned are still operational and how many were affected, I know this is completely unrelated to the course but this disaster will affect the businesses and their accounts, if they have suffered terribly they will need time and money to get re-established, in the mean time they suffer the loss of income whilst their business is not operational.

 If Luca Pacioli was the first to write about double-entry accounting, who developed it in the first place? Should we be thankful or regretful?  I am yet to decide.

 

My reflections:

I enjoyed the introduction, it captured me straight away, I felt that I just wanted to read more with the question now lingering in my mind – what is accounting?

 

An interesting fact = about half of the directors of listed companies in Australia and New Zealand have accounting backgrounds of some sort. I love this fact, currently I work in an organisation where I hope to step up through the ranks, soak up and receive as much information and experience as possible and ultimately, move to bigger and better firms with a goal to becoming a Director or Managing Director of a business or firm that interests me not only on a work perspective, but personally as well.  I long for the day where I can say “I love my job”.

 

I currently work for an organisation that primarily services farmers, there are a lot of farmers whose businesses are some form of a family trust. I look forward to the possibility that I will learn the advantages of such a business format.

 

Debits and credits are like 2 sides to every story or for every action there is an equal and opposite reaction. As long as I keep with this concept and ensure both sides always balance, I am on the right path to successful accounting practices.

Throughout the explanation of the 5 elements of accounting, I find it useful that generalisations and examples are given, such as “you cannot create value by simply moving things around from one pocket to the next”. This is such a good statement when explaining what revenues and expenses are, what they relate to and why we do not include transactions between a firm and its equity owners. I think this statement will force this concept to remain ingrained in my memory bank, ensuring the idea is not overlooked or forgotten in future.

 

My reactions:

The starting point for my choice of studying a Bachelor of Accounting was the thought that accounting is essential – it is not something that will go out of fashion or that technology can replace. I like that Martin touches on this and agrees that all business (even accounting firms) need to keep accounts. I now feel that I have made a good decision, thankfully because I am half way through my degree.

The “game” of accounting, I completely agree, the more I study the more I find that there are rules about how you can move pieces on the board all within the limits of the game. But like any game, people can find a way to cheat and have done so in many high profile cases.

Chapter 3

My ideas:

I need to spend time gathering various Annual Reports and financial information, research this information and become familiar with the top 4 Financial Reports and how the information in each report relates to each other. I believe this will improve my knowledge of this area of study.

 

My reflections:

I am surprised that Annual Reports often contain 2 years of figures to make comparisons easier. I can imagine that sometimes this is detrimental to the current reputation of the company.

 

Financial reports form such an important part of business, they display figures and information that should allow any financial question to be answered. Once you become familiar with the various financial reports, I think it would prove quite interesting to gather up some related companies’ reports and sit down and compare the various business structures alongside their financials and try and find the best business structure – is bigger really better?

 

My reactions:

I had not previously thought of an Annual Report as a marketing document although now you mention it, how blind was I not to see that. I for one within my job help to create the Annual Report for our company. I am provided the information to display within the report and need to make it look great.  The information provided is always positive and upbeat.

 

It’s interesting that analysts use ratios to analyse financial statements. I would have thought the best analysis was comprehensively reading all materials provided rather than breaking it down into statistical information. Now that I read and grasp the idea of using ratios, it makes complete sense. When comparing companies it then enables you to compare “apples with apples”.

Step 5

Group feedback

I am part of Group 71.  This group involves myself as well as Suzanne Millar, Sven Grima, Tahni-lee Blewett and Tait Chapple.  I look forward to working with this group.