Boral Limited is the multinational company that supplies and manufactures the construction and building materials. The company has great capability on which it can build the future. It is resource – based company that is large and built their position as leader and developed good relationships with wide range of customers (Boral.com.au 2018).
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Particulars
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2016 (Million)
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2017 (Million)
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Revenue
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$ 3,945.20
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$ 4,257.80
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Net profit
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$ 256.00
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$ 296.00
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Looking into the income statement of Boral Limited, it is identified that the revenue of the company for the year ended 30th June 2016 was $ 3945.2 million whereas for the year ended 30th June 2017 it increased to $ 4257.8 million (Palepu, Healy and Peek 2013). The revenue of the company increased owing to the strong level of residential construction in the east coast and price gains with respect to the infrastructural growth and all major businesses. Further the operating profit increased from $ 344.3 million to $ 351.7 over the year from 2016 to 2017. Finally, the net profit of the company increased from $ 256 million in 2016 to $ 296.9 million in 2017. Therefore, it can be stated that with regard to the profitability factor the company has improved in 2017 as compared to the year 2016. Increase in financial income from $ 7.6 million to $ 24.4 million was one of the main attributes towards the increase in profit.
Cash flow statement
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Particulars
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2016 (Million)
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2017 (Million)
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Cash flow from operation
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$ 477.50
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$ 413.30
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Cash flow from investing activities
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$ (259.50)
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$ (3,731.30)
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Cash flow from financing activities
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$ (273.40)
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$ 3,107.00
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If the cash flow statement of the company is considered, it is recognized that the cash flow from operation is reduced from $ 477.5 million in 2016 to $ 413.3 million in 2017. The reason behind this was the reduction of receipts from the customers from $ 4635.7 million to $ 4583.3 million and increase in restructure cost from $ 34.5 million to $ 116.9 million over the years from 2016 to 2017. Cash used for investing activities has significantly increased from $ 259.5 million to $ 3731.3 million over the years from 2016 to 2017. The reason was the purchase of controlled business and entities during the year 2017 amounting to $ 3635.5 million (Lundholm and Sloan 2013). Further, the cash used in 2016 from financing activities was amounted to $ 273.4 million whereas the cash inflow from the same during the year 2017 was $ 3107 million. The significant receipts in 2017 were the capital from transaction cost amounted to $ 2018.9 million and proceed from the borrowing amounted to $ 1803.6 million.
Balance sheet
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Particulars
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2016 (Million)
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2017 (Million)
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Current assets
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$ 1,684.20
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$ 1,763.70
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Non-current assets
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$ 4,116.30
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$ 7,549.90
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Total assets
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$ 5,800.50
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$ 9,313.60
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Looking into the asset side of the balance sheet it is identified that the current assets of the company has been increased from $ 1684.2 million to $ 1,763.7 million over 2016 to 2017. Further, the non-current asset of the company has been significantly increased from $ 4,116.3 to $ 7,549.9 over the years from 2016 to 2017. Therefore, the total asset of the company is in increasing trend that provides better liquidity (Brigham and Ehrhardt 2013). The reason behind the increase in the current assets was the purchase of intangible assets amounting to $ 2973.9 million. Further, the plant, property and equipments were purchased amounting to $ 238 million that were required for carrying out the construction activities of the company.
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Particular
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2016 (Million)
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2017 (Million)
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Current liabilities
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$ 1,181.70
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$ 1,468.30
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Non-current liabilities
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$ 1,112.50
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$ 2,404.80
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Total Equity
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$ 3,506.30
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$ 5,440.50
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Total liabilities and equity
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$ 5,800.50
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$ 9,313.60
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Looking into the liabilities of the company it is recognized that the current liabilities of the company has been increased from $ 1,181.7 to $ 1,468.3 and the non-current liabilities of the company has been increased from $1,112.5 to $ 2,404.8 over the years from 2016 to 2017. The increasing liabilities in turn will reduce the liquidity of the company (Brochet, Jagolinzer and Riedl 2013). The current liabilities were increased due to increase in the trade creditors and increase in the current tax liabilities of the company.
Basis of preparation
Boral Limited prepares its financial statement based on the historical costs except the revaluation of some specific financial instruments (Bodie, Kane and Marcus 2014). As the company is a for profit company that is limited by shares and incorporated in Australia, its financial statements are complied with the AASBs (Australian Accounting Standards) that is adopted by AASB (Australian Accounting Standards Board) and Corporation Act 2001. The financial statements are further complied with the IFRS (international Financial Reporting Standards) that is adopted by IASB (International Accounting Standards Board). Therefore, the method followed by the company for preparation of financial statement is suitable to them.
Reference
Bodie, Z., Kane, A. and Marcus, A.J., 2014. Investments, 10e. McGraw-Hill Education.
Boral.com.au., 2018. Homepage | Boral. [online] Available at: https://www.boral.com.au/ [Accessed 18 Jan. 2018].
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage Learning.
Brochet, F., Jagolinzer, A.D. and Riedl, E.J., 2013. Mandatory IFRS adoption and financial statement comparability. Contemporary Accounting Research, 30(4), pp.1373-1400.
Lundholm, R.J. and Sloan, R.G., 2013. Equity valuation and analysis with eVal. McGraw-Hill Irwin.
Palepu, K.G., Healy, P.M. and Peek, E., 2013. Business analysis and valuation: IFRS edition. Cengage Learning.
