Alpha Analysts Group, have been asked to conduct the following evaluations for Crown Resort on the Australian Securities Exchange (ASX) for 2017 and 2018. 1) Profitability Breakdown 2) Growth Valuation 3) Forecast Financial Statements for a period of 3 years. (2019 to 2021) 4) Capital Structure Given the following reformulated Income Statement and Balance Sheet answer Questions 1 to 8. (The Annual report for 2017 and 2018 is provided.) Reformulated Income Statements 2017 2018 $3,334,487 $3,462,900.00 $1,835,408 $172,500.00 $5,169,895 $3,635,400.00 Operating Revenue Sales Other Revenue and Income Total Less Operating Expenses Expenses Total operating expenses Total operating income before tax Income tax Expense Operating Income after tax Finance Costs Interest Revenue Net Finance Expenses Share of profits of associates and Joint venture entities Profit for the year (Net income) $3,143,274.00 $2,851,800.00 $3,143,274.00 $2,851,800.00 $2,026,621.00 $783,600.00 $106,815.00 $171,000.00 $1,919,806.00 $612,600.00 $143,617.00 -$76,100.00 $9,648.00 $30,100.00 $133,969.00 -$46,000.00 $39,132.00 $1,824,969.00 $6,600.00 $573,200.00 Reformulated Balance Sheets Operating Asset Cash and Cash equivalents Trade and Other receivables Inventories Prepayments Property, plant and equipment Other financial assets Deferred tax assets Receivables Other financial assets (Non-Current) Investments (Non-current) Investments in associates (Non- Current) Licences Other intangible assets Other assets (Non-current) 2017 $8,552,620.00 $1,771,227.00 $225,290.00 $17,457.00 $35,465.00 $3,959,191.00 $9,375.00 $354,701.00 $145,735.00 $21,892.00 $64,764.00 2018 $8,171,700.00 $1,844,600.000 $172,300.00 $17,300.00 $32,800.00 $3,880,700.000 $9,200.00 $266,900.00 $143,000.00 $23,300.00 $235,511.00 $1,097,296.00 $562,720.00 $51,996.00 $187,800.00 $1,080,600.00 $462,800.00 $50,400.00 (Less) Operating Liabilities Trade and other payables Income tax payable Provisions (Current) Other payables Deferred tax liabilities Provisions (Non-current) Net Operating Assets $1,429,467.00 $446,503.00 $118,168.00 $210,788.00 $224,802.00 $377,423.00 $51,783.00 $7,123,153.00 $1,519,000.00 $427,500.00 $165,300.00 $225,100.00 $287,600.00 $380,900.000 $32,600.00 $6,652,700.00 $350,109.00 $25,700.00 Financial Liabilities Interest-bearing loans and borrowings (Current) Interest-bearing loans and borrowings (Non-current) Other financial liabilities (Non-current) Other financial liabilities (Current) $1,594,889.00 $2,790.00 $1,467,000.00 $2,100.00 (continue) 2017 2018 $1,947,788.00 $1,494,800.00 Net Financial Obligations Shareholder's Equity Contributed equity Treasury shares Reserves Retained earnings Non-controlling interest Common shareholders' equity $53,233.00 $71,900.00 $19,377.00 -$15,700.00 $60,792.00 -$60,500.00 $5,153,080.00 $5,306,000.00 $34,103.00 $5,175,365.00 $5,157,900.00 Net financing $5,175,365.00 $5,157,900.00 Question 4 Provide a systematic analysis of growth for 2017 and 2018 a. Calculate the following: i. Revenue Growth 2 Marks ii. Growth in Common Shareholder's Equity (CSE) 2 Marks iii. Growth in Comprehensive Income 2 Marks iv. Residual Earnings (cost of equity of 11%) 5 Marks b. Calculate the components of the change in Return on Net Operating Assets (RNOA.) i. Change in core sales PM at previous asset turnover level 1 Mark ii. Change due to change in asset turnover 1 Mark iii. Change due to change in other core income 1 Mark iv. Change due to change in unusual items 1 Marks v. Discuss the drivers of change in RNOA 2 Marks 2 Marks c. Calculate the components of the change in Return on Common Equity (ROCE). i. Change in RNOA 1 Mark ii. Change due to change in spread at previous level of financial leverage 2 Mark iii. Change due to change in financial leverage 2 Marks iv. Discuss change in ROCE that is due to a change in spread and a change in financial leverage 2 Marks d. Calculate the components of the change in Common Shareholder's Equity (CSE) as follow: a. Change due to change in sales at previous level of asset turnover 1 Mark b. Change due to change in asset turnover 2 Marks c. Change in financial assets 2 Marks Alpha Analysts Group, have been asked to conduct the following evaluations for Crown Resort on the Australian Securities Exchange (ASX) for 2017 and 2018. 1) Profitability Breakdown 2) Growth Valuation 3) Forecast Financial Statements for a period of 3 years. (2019 to 2021) 4) Capital Structure Given the following reformulated Income Statement and Balance Sheet answer Questions 1 to 8. (The Annual report for 2017 and 2018 is provided.) Reformulated Income Statements 2017 2018 $3,334,487 $3,462,900.00 $1,835,408 $172,500.00 $5,169,895 $3,635,400.00 Operating Revenue Sales Other Revenue and Income Total Less Operating Expenses Expenses Total operating expenses Total operating income before tax Income tax Expense Operating Income after tax Finance Costs Interest Revenue Net Finance Expenses Share of profits of associates and Joint venture entities Profit for the year (Net income) $3,143,274.00 $2,851,800.00 $3,143,274.00 $2,851,800.00 $2,026,621.00 $783,600.00 $106,815.00 $171,000.00 $1,919,806.00 $612,600.00 $143,617.00 -$76,100.00 $9,648.00 $30,100.00 $133,969.00 -$46,000.00 $39,132.00 $1,824,969.00 $6,600.00 $573,200.00 Reformulated Balance Sheets Operating Asset Cash and Cash equivalents Trade and Other receivables Inventories Prepayments Property, plant and equipment Other financial assets Deferred tax assets Receivables Other financial assets (Non-Current) Investments (Non-current) Investments in associates (Non- Current) Licences Other intangible assets Other assets (Non-current) 2017 $8,552,620.00 $1,771,227.00 $225,290.00 $17,457.00 $35,465.00 $3,959,191.00 $9,375.00 $354,701.00 $145,735.00 $21,892.00 $64,764.00 2018 $8,171,700.00 $1,844,600.000 $172,300.00 $17,300.00 $32,800.00 $3,880,700.000 $9,200.00 $266,900.00 $143,000.00 $23,300.00 $235,511.00 $1,097,296.00 $562,720.00 $51,996.00 $187,800.00 $1,080,600.00 $462,800.00 $50,400.00 (Less) Operating Liabilities Trade and other payables Income tax payable Provisions (Current) Other payables Deferred tax liabilities Provisions (Non-current) Net Operating Assets $1,429,467.00 $446,503.00 $118,168.00 $210,788.00 $224,802.00 $377,423.00 $51,783.00 $7,123,153.00 $1,519,000.00 $427,500.00 $165,300.00 $225,100.00 $287,600.00 $380,900.000 $32,600.00 $6,652,700.00 $350,109.00 $25,700.00 Financial Liabilities Interest-bearing loans and borrowings (Current) Interest-bearing loans and borrowings (Non-current) Other financial liabilities (Non-current) Other financial liabilities (Current) $1,594,889.00 $2,790.00 $1,467,000.00 $2,100.00 (continue) 2017 2018 $1,947,788.00 $1,494,800.00 Net Financial Obligations Shareholder's Equity Contributed equity Treasury shares Reserves Retained earnings Non-controlling interest Common shareholders' equity $53,233.00 $71,900.00 $19,377.00 -$15,700.00 $60,792.00 -$60,500.00 $5,153,080.00 $5,306,000.00 $34,103.00 $5,175,365.00 $5,157,900.00 Net financing $5,175,365.00 $5,157,900.00 Question 4 Provide a systematic analysis of growth for 2017 and 2018 a. Calculate the following: i. Revenue Growth 2 Marks ii. Growth in Common Shareholder's Equity (CSE) 2 Marks iii. Growth in Comprehensive Income 2 Marks iv. Residual Earnings (cost of equity of 11%) 5 Marks b. Calculate the components of the change in Return on Net Operating Assets (RNOA.) i. Change in core sales PM at previous asset turnover level 1 Mark ii. Change due to change in asset turnover 1 Mark iii. Change due to change in other core income 1 Mark iv. Change due to change in unusual items 1 Marks v. Discuss the drivers of change in RNOA 2 Marks 2 Marks c. Calculate the components of the change in Return on Common Equity (ROCE). i. Change in RNOA 1 Mark ii. Change due to change in spread at previous level of financial leverage 2 Mark iii. Change due to change in financial leverage 2 Marks iv. Discuss change in ROCE that is due to a change in spread and a change in financial leverage 2 Marks d. Calculate the components of the change in Common Shareholder's Equity (CSE) as follow: a. Change due to change in sales at previous level of asset turnover 1 Mark b. Change due to change in asset turnover 2 Marks c. Change in financial assets 2 Marks