Brewing Behaviour is a large Australian beer brewing company. It sells to wholesalers and commercial outlets, which then deal directly with Brewing Behaviour’s target customers. Brewing Behaviour’s iconic beers are also exported to New Zealand, the United Kingdom and the United States. Brewing Behaviour manufactures in various offshore locations and, as a result, a significant proportion of Brewing Behaviour’s costs of production are incurred in US dollars.

BREWING BEHAVIOUR LIMITED INCOME STATEMENT FOR YEAR ENDED 30 JUNE 2022 Consolidated 2022 2021

$000 $000 Revenue from sales of goods 36 480 47 259 Other revenue 6 534 12 601 Total revenue 43 014 59 860 COGS (23 656) (38 577)

Other expenses from ordinary activities (5 483) (8 718)

Earnings before borrowing costs, tax, depreciation and amortisation 13 875 12 565 Depreciation and amortisation expenses (2 890) (3 415)

Earnings before borrowing costs and tax 10 985 9 150 Borrowing costs (3 255) (3 165)

Profit from ordinary activities before income tax 7 730 5 985 Income tax benefit/(expense) relating to ordinary activities (1 305) (2 233)

Profit from ordinary activities after related income tax 6 425 3 752 Net profit attributable to members of the parent entity 6 425 3 752 Basic earnings per share (cents) 8.4 6.8 Diluted earnings per share (cents) 8.0 6.7 BREWING BEHAVIOUR LIMITED BALANCE SHEET AS AT 30 JUNE 2022 Consolidated 2022 2021 Note $000 $000 Current assets Cash 3 804 73 Receivables 1 13 758 22 107 Inventories 2 61 467 41 659 Other assets 535 691 Total current assets 79 564 64 530 Noncurrent assets Other financial assets 2 800 6 143 Property, plant and equipment 3 79 176 66 620 Intangible assets 54 627 61 229 Other assets 494 —
Total noncurrent assets 137 097 133 992 Total assets 216 661 198 522 Current liabilities Payables 28 042 26 513 Interest-bearing liabilities 23 846 31 608 Current tax liabilities 73 1 899 Provisions 1 828 2 015 Total current liabilities 53 789 62 035 Noncurrent liabilities Interest-bearing liabilities 80 898 84 300 Deferred tax liabilities 3 720 623 Provisions 474 1 245 Total noncurrent liabilities 85 092 86 168 Total liabilities 138 881 148 203 Net assets 77 780 50 319 Equity Contributed equity 4 60 950 38 886 Reserves 3 932 2 200 Retained profits 12 898 9 233 Total equity 77 780 50 319 The balance sheets are to be read in conjunction with the notes to the financial statements.
BREWING BEHAVIOUR LIMITED CASH FLOW STATEMENT Consolidated 2022 2021 $000 $000 Cash flows from operating activities Cash receipts in the course of operations 89 336 53 265 Cash payments in the course of operations (89 731) (49 372)
Interest received 24 23 Borrowing costs paid (6 418) (2 712)
Income taxes paid (58) (1 239)
Net cash used by operating activities (6 847) (35)

Cash flows from investing activities Proceeds on disposal of noncurrent assets 11 116 5 714 Payments for controlled entities (net of cash acquired) (949) (25 528)
Payments for deferred acquisition cost (494) —
Payments for property, plant and equipment (4 676) (4 014)
Payments for acquisition of intangibles (78) (104)
Net cash from/(used in) investing activities 4 919 (23 932)
Cash flows from financing activities Proceeds from issue of shares 20 011 3 Payments for share issue costs (1 500) —
Proceeds from/(repayments of) borrowings (4 700) 29 710 Finance lease and hire purchase payments (4 454) (1 898)
Dividends paid (2 838) (2 392)
Net cash from financing activities 6 519 25 423 Net increase/(decrease) in cash held 4 591 1 456 Cash at the beginning of the financial year 73 (1 346)
Effects of exchange rate fluctuations on the balances of cash held in foreign currencies (860) (37)
Cash at the end of the financial year 3 804 73 BREWING BEHAVIOUR LIMITED SELECTED NOTES TO THE ACCOUNTS 2022 2021 2020 $000 $000 $000 1. RECEIVABLES Current Trade debtors 27 432 23 119 5 345 Less: Allowance for doubtful trade debtors (13 829) (1 135) (222)
13 603 21 984 5 123 Other debtors 155 123 102 13 758 22 107 5 225 2. INVENTORIES Current Bulk beer, at cost 50 258 28 027 13 114 Packaged beer, at cost 9 324 12 627 4 815 Packaging materials, at cost 1 815 931 454 Sundry merchandise, at cost 70 74 53 61 467 41 659 18 436 2022 2021 3. PROPERTY, PLANT AND EQUIPMENT Freehold land – At fair value 8 115 4 470 Buildings – At fair value 36 511 21 383 Less: Accumulated depreciation (3 434) (443)
33 077 20 940 Plant and equipment, at cost 36 153 35 362 Less: Accumulated depreciation (8 232) (5 909)
27 921 29 453 Leased plant and equipment 8 967 10 193 Less: Accumulated amortisation (900) (472)
8 067 9 721 Capital work-in-progress 1 996 2 036 Total property, plant and equipment Net book value 79 176 66 620 2022 2021 2020 4. CONTRIBUTED EQUITY Number of shares 92 000 000 55 000 000 55 000 000 37 000 000 shares were issued on 1 December 2021.
The market price of shares was $0.95 on 30 June 2022 ($0.98 on 30 June 2021).
5. DIVIDENDS DECLARED During the year, dividends of 3 cents per share were declared (2021: 4 cents per share)
1 Calculate ratios for Brewing Behaviour Limited for 2021 and 2022, using Exhibit 6.1 as a guide. Be sure to include appropriate units.
2 Comment on the financial performance of Brewing Behaviour in 2022 (relative to 2021) with reference to the previous ratio calculations. You may wish to further research the performance of the brewing industry to enhance your answer.