TechGenius is a small to medium-sized IT company based in Adelaide, Australia. Renowned for its exceptional...

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TechGenius is a small to medium-sized IT company based in Adelaide, Australia. Renowned for its exceptional technological expertise and innovative solutions, TechGenius offers a diverse range of IT services, including hardware sales, software development, network infrastructure, cloud computing, and more. Known for their commitment to innovation and customer satisfaction, the company has established a strong reputation within the Australian IT industry. Cheryl, your good friend, shares a similar passion for technology and has always been intrigued by the dynamic IT industry. When Cheryl received an exciting opportunity to invest in TechGenius and become a part of its growth, she couldn't resist the chance to be involved in a company she believed had immense potential. To make an informed decision about investing her hard-earned money, Cheryl diligently researched TechGenius and gathered the comparative financial statements for the years 2022 and 2023. Recognizing your expertise in financial analysis, she turns to you for guidance and insight. Cheryl is eager to understand the implications of these numbers and decipher the story they tell about TechGenius's performance and prospects. She seeks your expertise to analyse the financial statements, identify trends, and interpret key financial ratios to help her make an informed decision about investing in TechGenius. Revenue Cost of Sales Gross Profit TechGenius Comparative Statements of Financial Performance For the years ended 30 June 2023-2021 2023 $ 2022 $ 2021 $ 1,400,000 1,200,000 1,000,000 640,000 556,000 $380,000 760,000 644,000 620,000 Expenses Selling & Administrative 315,000 320,000 250,000 Research and Development 80,000 86,000 42,000 Finance Costs 15,000 12,000 8,000 410,000 418,000 300,000 Profit Before Tax 350,000 226,000 320,000 Income Tax Expense 105,000 67,800 96,000 Profit/(Loss) 245,000 158,200 224,000 TechGenius Comparative Statements of Financial Position As at 30 June 2023 - 2021 2023 2022 2021 Current assets Inventory 145,500 112,000 88,000 Accounts receivable 160,000 145,000 130,000 Cash 90,500 66,000 52,000 Total current assets 396,000 323,000 270,000 Non-current assets PPE 420,000 350,000 280,000 Other non-current assets 100,000 90,000 80,000 Total non-current assets 520,000 440,000 360,000 Total assets 916,000 763,000 630,000 Current liabilities Accounts payable 205,000 185,000 160,000 Other current liabilities 115,000 95,000 70,000 Total current liabilities 320,000 280,000 230,000 Total non-current liabilities 300,000 220,000 160,000 Total liabilities Net Assets Equity 620,000 500,000 390,000 296,000 263,000 240,000 Total shareholders' funds 296,000 263,000 240,000 Task A - Calculation (using Excel Spreadsheet) Using the excel spreadsheet template provided, complete the following analysis. 1 Prepare a horizontal analysis on the statements provided. 2 Prepare a vertical analysis on the statements provided. (4 marks) (6 marks) 3 Prepare a trend analysis on the statements provided, the base year being 2021. 4 (6 marks) Calculate the following ratios for 2023 and 2022 using the financial statements provided. a. Profitability ratios Return on Assets Return on Equity Profit Margin Gross Profit Margin b. Liquidity ratios Current ratio Quick ratio Average collection period Inventory turnover c. Financial stability ratios Debt ratio Times Interest Earned (16 marks) (16 marks) (8 marks) These calculations provide information which you will analyse in the body of the report and should be attached to your final report as an appendix. TechGenius is a small to medium-sized IT company based in Adelaide, Australia. Renowned for its exceptional technological expertise and innovative solutions, TechGenius offers a diverse range of IT services, including hardware sales, software development, network infrastructure, cloud computing, and more. Known for their commitment to innovation and customer satisfaction, the company has established a strong reputation within the Australian IT industry. Cheryl, your good friend, shares a similar passion for technology and has always been intrigued by the dynamic IT industry. When Cheryl received an exciting opportunity to invest in TechGenius and become a part of its growth, she couldn't resist the chance to be involved in a company she believed had immense potential. To make an informed decision about investing her hard-earned money, Cheryl diligently researched TechGenius and gathered the comparative financial statements for the years 2022 and 2023. Recognizing your expertise in financial analysis, she turns to you for guidance and insight. Cheryl is eager to understand the implications of these numbers and decipher the story they tell about TechGenius's performance and prospects. She seeks your expertise to analyse the financial statements, identify trends, and interpret key financial ratios to help her make an informed decision about investing in TechGenius. Revenue Cost of Sales Gross Profit TechGenius Comparative Statements of Financial Performance For the years ended 30 June 2023-2021 2023 $ 2022 $ 2021 $ 1,400,000 1,200,000 1,000,000 640,000 556,000 $380,000 760,000 644,000 620,000 Expenses Selling & Administrative 315,000 320,000 250,000 Research and Development 80,000 86,000 42,000 Finance Costs 15,000 12,000 8,000 410,000 418,000 300,000 Profit Before Tax 350,000 226,000 320,000 Income Tax Expense 105,000 67,800 96,000 Profit/(Loss) 245,000 158,200 224,000 TechGenius Comparative Statements of Financial Position As at 30 June 2023 - 2021 2023 2022 2021 Current assets Inventory 145,500 112,000 88,000 Accounts receivable 160,000 145,000 130,000 Cash 90,500 66,000 52,000 Total current assets 396,000 323,000 270,000 Non-current assets PPE 420,000 350,000 280,000 Other non-current assets 100,000 90,000 80,000 Total non-current assets 520,000 440,000 360,000 Total assets 916,000 763,000 630,000 Current liabilities Accounts payable 205,000 185,000 160,000 Other current liabilities 115,000 95,000 70,000 Total current liabilities 320,000 280,000 230,000 Total non-current liabilities 300,000 220,000 160,000 Total liabilities Net Assets Equity 620,000 500,000 390,000 296,000 263,000 240,000 Total shareholders' funds 296,000 263,000 240,000 Task A - Calculation (using Excel Spreadsheet) Using the excel spreadsheet template provided, complete the following analysis. 1 Prepare a horizontal analysis on the statements provided. 2 Prepare a vertical analysis on the statements provided. (4 marks) (6 marks) 3 Prepare a trend analysis on the statements provided, the base year being 2021. 4 (6 marks) Calculate the following ratios for 2023 and 2022 using the financial statements provided. a. Profitability ratios Return on Assets Return on Equity Profit Margin Gross Profit Margin b. Liquidity ratios Current ratio Quick ratio Average collection period Inventory turnover c. Financial stability ratios Debt ratio Times Interest Earned (16 marks) (16 marks) (8 marks) These calculations provide information which you will analyse in the body of the report and should be attached to your final report as an appendix.