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ACCT7106 Individual Project
Note: This document may be updated from time-to-time as I am asked more questions. New content
since the previous version will be highlighted in yellow.
Question 1: Adoption of AASB 16 has led to ‘right-of-use assets’ appearing on the Balance Sheet
along with increased lease liabilities. What should I do when reformulating?
Answer: This makes no difference to our reformulation approach. The principles in Class 2 apply:
lease-related assets (‘right-of-use assets’) are operating assets and lease-related liabilities are financial
obligations.
Taking our approach, you may find some large changes in the balance sheet in 2020 after the
adoption of AASB 16 which may have an impact on companies’ ratios. You may consider discussing
the impact of AASB 16 in Part D of the project.
For the purpose of this project, you do not necessarily have to adjust NOA, NFO, and CSE due to
AASB 16. I did those adjustments for JB Hi-Fi. However, you can skip them for the project.
Question 2: Some figures are different in the company’s annual report compared to the provided
Excel financials. Which numbers should I use?
Answer: The numbers that I provided in Excel should be used. In some cases, I have fixed differences
in presentation between annual reports for you. Some companies will slightly alter their figures from
one annual report to the next. I have chosen which figures to use for you.
Question 3: Should I disaggregate accounts that you haven’t disaggregated in the provided Excel
file?
Answer: Yes, if you think it is necessary. I have disaggregated some accounts for you in excel, but that
doesn’t mean I have included every account that may require disaggregation.
Question 4: My company has different line items than that for JB Hi-Fi. What should I do?
Answer: You should adapt the JB Hi-Fi workbook for your company. Every company will have
different line items in its financial statements. You must set up your spreadsheet to suit your company.
Question 5: I am not able to break down ROCE. What should I do?
Answer: Anomalies with the Break-Down ROCE = RNOA + FLEV x SPREAD.
You may encounter problems with interpreting the break-down ROCE = RNOA + FLEV x
SPREAD. Two common problems are:
ACCT7106 Individual Project - FAQs Semester 1, 2023
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• The company has changed from having NFA to NFO or from NFO to NFA.
• The company has NFE and NFA or it has NFI and NFO.
If this happens, then for part D3 of the project, you should discuss why the situation has occurred
and why it might make this break-down not meaningful/difficult to interpret.
Question 6: I need revenue figure for FY2018 to calculate the balance of operating cash for FY
2018. I do not have the annual report for FY 2018. Where can I find this information?
Answer: You will get figures for FY2018 in the 2019 annual report as well. You can access the 2019
annual report on Learn.UQ.
Question 7: There are some significant non-cash transactions. How can I use this information to
reformulate the statement of cash flows?
Answer: You should use information about non-cash transactions to reconstruct the implicit cash flows.
For example, a firm acquires an operating asset by writing a note (financial obligation). This is a non-
cash transaction. However, for the purpose of reformulation you should assume that there was cash
inflow from financing activities (note – financial obligations). The company immediately used this cash
to purchase an operating asset (investment in operations).
You should look at the at the reconciliation of net profit after taxes to net cash flow from operating
activities (indirect format of the cash flow statement) to adjust for non-cash item “share-based payment
expense”. You can refer to JB Hi-Fi example that I discussed in the class.
Question 8: There is “Government grant income - wage subsidies” included in the calculation of
profit on the income statement. It is not clear on which account these expenses have been included.
How should I classify this item on the reformulated income statement?
Answer: If it is not clearly mentioned in the notes to the financial statements then you can assume that
these expenses are included in selling expenses. It will be appropriate to classify “Government grant
income - wage subsidies” as part of unusual operating income.
Question 9: My company has reported interest received in CFI (Cash flow from investing
activities) and interest paid as CFF (Cash flow from financing activities). How do I reformulate
this?
Answer: Please follow the instructions in the Appendix to class 4. You can also refer to an excel file
“Cash Flow Statement Reformulation - Additional Examples” shared on Blackboard in Seminar 4 folder.
There are different examples showing adjustments in the statement of cash flows when interest received
and interest paid are reported in different sections.
ACCT7106 Individual Project - FAQs Semester 1, 2023
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Question 10: I would like to go through the investor presentation and earnings conference call
transcript to answer part D2 and D3 of the project. Where can I get download these documents?
Answer: You can access investor presentation from the company’s website/ASX website/Morningstar
DatAnalysis. You can access earnings conference call transcripts through Factiva (from the UQ Library).
I have provided Factiva links to the earnings conference call transcripts below:
Full Year 2022 Myer Holdings Ltd Earnings Call
Full Year 2021 Myer Holdings Ltd Earnings Call
Full Year 2020 Myer Holdings Ltd Earnings Call
Question 11: I want to compare the ratios of my company with industry ratios. Where I can find
the industry ratios?
Answer: I have calculated some ratios for all publicly listed firms in Australia in the Specialty Retail
industry [GICS Industry (255040)] during the period 2019-2022 using the accounting data from
CompuStat. Please refer to the following tables. You can also refer to the graphs included in Appendix
of Class 5 slides.
RNOA
p10 p25 p50 p75 p90
2019 0.42% 6.61% 19.23% 31.94% 99.92%
2020 -19.36% 7.81% 14.33% 22.03% 30.27%
2021 8.94% 11.03% 23.71% 37.45% 91.06%
2022 -18.75% 9.75% 17.19% 29.83% 45.25%
PM
p10 p25 p50 p75 p90
2019 0.72% 2.91% 5.37% 10.09% 12.77%
2020 -7.53% 2.78% 7.84% 13.00% 17.47%
2021 2.48% 5.60% 10.11% 18.91% 24.95%
2022 -52.41% 5.29% 9.39% 15.75% 20.89%
ATO
p10 p25 p50 p75 p90
2019 1.549 1.945 2.886 5.817 8.733
2020 1.026 1.271 1.999 2.989 4.962
2021 1.128 1.553 2.087 2.946 5.318
ACCT7106 Individual Project - FAQs Semester 1, 2023
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2022 1.062 1.180 1.857 2.601 5.248
Question 12: Myer’s topline figure in the income statement includes concession sales made by
concession operator. How should I deal with concession sales and concession revenue in the
reformulated income statement?
Answer: As mentioned in Note A2, concession sales represents the sales proceeds of concession
operators within Myer stores. You should exclude concession sales and use “Revenue from sale of goods”
as the topline figure in the reformulated income statement. Please consider “Concessions revenue” as
part of core other operating income.
Question 13: Myer has not disclosed how much of “Other operating revenue” is due to financial
services income in note A2. How do I reformulate this?
Answer: Since this information is not available, you can consider total “Other operating revenue”
which consists of “Concessions revenue” and “Other” as part of core other operating income in the
reformulated income statement.
