Financial Statements

Waleed Zafar & AlexAFW1000Tutor: Lau Fook Seng Monash University

IntroductionWhat are the financial statements?

They are formal records of the financial activities of a business, person or other entity

IntroductionThey consist of four key statements:

Balance SheetIncome StatementsCash Flow StatementsStatements of Shareholder’s equity

Users can Make Economic Decisions

IntroductionWho are the users of financial statements?

Investors

Managers

Creditors/

Lenders

Tax Authoriti

es

IntroductionOur chosen company is Qantas AirwaysIt is Australia’s largest airline We have chosen to do the analysis of the

2008 financial reports

Responsibility of Senior ManagementsWhile issuing the financial statements the

senior management of Qantas need to make sure that:

The reports are in accordance with Australian Accounting Standards (AASB) and the Corporations Act 2001

Maintaining internal control while preparation and fair presentation of the reports

Responsibility of Senior ManagementThey also need to make sure that the

financial statements are free from material misstatement whether due to fraud or error

They also need to make sure that the financial statements and the notes complies with the International Financial Reporting Standards.

AuditorsWho are auditors?

A person who evaluate controls and attest to the fairness of the financial statements

AuditorsThe responsibilities of the auditors of Qantas

are assisting the Board in fulfilling its corporate governance responsibilities

The reliability and integrity of financial information

Compliance with legal and regulatory obligations

Auditorscompliance by all employees with all policies

including the Qantas Code of Conduct & Ethics

the integrity of the Qantas Group’s internal control framework

Asset ManagementNet Assets can be funded by either debt or

equity

In the case of Qantas, this can identified by using the following equation:

Asset ManagementThis equation shows the finance and profitability of the company

It shows what proportion of total assets is financed by equity, and hence what proportion is financed by loans and non-equity shares.

A low equity to assets ratio means much of the business is financed by loans, or non-equity shares, whereas a high equity to assets ratio means that most or all of the long-term capital is equity

By using the formula, we can see that Qantas has around 29% of its total assets funded by equity.

This shows that the company has an average profitability and

finance. Since the figures show an average loans and non equity shares

ConclusionIn order to become a successful airline in the

future, Qantas needs to ensure that:quality of the airline service are well maintain,

and continuously improving.continue sustainability reporting/corporate

social responsibility to benefit the societydeliver “the best” to its shareholdersmanage risk efficientlyconduct operation in ethical way

Thank You!