SPA #2

I wasn't go to ad my recent SPA #2 however it would be great to have some feedback on where I may improve. The SPA assignments have been quite a challenge.

I’m sitting here right now pondering on what this is all about. Just the thought of the topic of budgeting send a shiver up my spine sometimes. Looking at what needs to be paid and what needs to be cut back. But enough of the rambling let’s get into the real meat of this topic and see what brings a spark of interest to me and what may confuse me or that may need clarification.
Actions speak louder than words! I have a dream but unless I put it into action it will mean nothing. In future years to come it will be great to be my own boss but until then my actions need to show that I can do this. So where do I begin with this task?
This reading reminds me of the planning that went into place last year for my first trip to Japan. I needed to put in place a plan to what I was going to achieve. Firstly where were I going to get the money from? It wouldn’t just come out of thin air. I need to work and then make a plan to save part of my earnings and then using my budgeting techniques to allocate certain funds for the many things that need to be done from airplane flights to passports to hotels and the like.
Just like the beginning of this chapter states that to achieve the plans there needs to be a first step taken. A manager will need to make a plan of what needs to be done to take his or her company into the future. The plan being setting up a budget. For me it would be setting up a budget to maybe buy a car or home or even with Aristocrat Leisure a vision was set in place to make and provide poker machines. With each step there needs to be set in place short-term goals, long term and future goals.
Whilst planning my trip to Japan just like companies I needed a reason to save and budget my money. What short-term planning would be needed? How was I going to coordinate the trip? What communication needed to be made to have a successful holiday? Budgeting is an integral part of managing accounts. Whether it be a business or the everyday person like you or I, budgeting helps us to make short term planning that will encourage others to assist the business or in my case the trip.
Budgets need to be clear in what is to be expected in the different areas of a business.
At times for some people this can be a difficult thing to comprehend that each person needs to work with others to achieve an outcome for the business. Communication is the key word in all budgets. Just like a husband and wife commit to marriage and learn to communicate their feelings to each other so must a manager be able to communicate what part of the journey that the firm wants to go. Planning seems to pay a big role in the budgeting process no matter how big or small the firm or task maybe. How can we expect a business to be successful with communicating what is required for the business to do and where the money will be used effectively? One small step at a time. This is what is needed for the company to grow. Without that step the company will not go anywhere. Do I know what my role is in the future once I have completed my degree? A company needs to know where they will be heading.
In my planning just like a manager of any firm I cannot do it all on my own. We as individuals need to delegate areas of the task to others so as to lighten the load. Whether it be the manager or myself we do not know everything and through careful planning and some delegation the overall objective and goals will need to have a considerable scope to achieve these.
In general for all this to happen a company needs to have motivation to accomplish all this. My motivation for my trip was knowing that I was going to Japan for a long awaited holiday and wedding of a friend. So to achieve this my budgeting skills need to come into play to allow this to happen. A company’s motivation would be what type of product or service they were going to provide. Money doesn’t grow on trees so being motivated is one of the key concepts for a business to succeed. Budgeting is just one of the key areas to which the company or myself would need to work on.
As I am reading more into this chapter key players are coming to the fore. Budgeting is not just at the top level. Each department whether it be the production line manager or the top executive each role is just a cog in the larger wheel. Each component needs the other to work. I see that there is a person at the top who has the bigger picture in focus or longer-term strategic plan but negotiations will need to be made for the budget to work in the short term process.
It is interesting to note though that integrity plays a big part in producing budgets. A manager who asks his staff to set their budgets and then decides that he will instead do it himself leaves his staff in mistrust as they have been lied to in regards to what they have planned. Disunity then can set in and staff will not try to meet the targets that now have been set.
Looking at what makes up the budget process I have found that various aspects of the firm will be involved. These will includes sales, marketing, production, distribution, customer service, human resources, finance and administration. Thinking logically even within my own workplace I can see how this works. Within the private school environment you have similar areas. From the customer (being the parent or student), sales and marketing being the school, teachers, ancillary staff, administration staff, financial staff and other areas will all need to work together to have a feasible system for the budget that is put in place. If by any chance that conflict arises or school numbers increase or decrease the school will need to adjust their budget accordingly. Time lag could hurt the system if it is not acted upon quickly and efficiently.
Following on from this another key area would be ensuring the budgeting procedures are consistent with both budgeted sales and budgeted inventory. Each member of the team will be responsible for their own area. The goals they set in place will reflect how their sales will proceed during the year.
Whilst I consider on this and think what is involved I see that within the master budget the company will need to have a cash budget, a budgeted income statement and also a budgeted balance sheet. Creating a budget adds a new dimension to the business world. This reminds me of the movie the matrix where a virtual world was created just like the business world creates its budget for a future that has happened yet but show what could happen in the short term process.
Can budgets look similar or do they can they be different. Seeing that there is no set rule on how budgets are set up it is interesting to note that whether it be Ryman Health Centre or Aristocrat Leisure Pty Ltd or even my own budget for some strange theme of things they look different but can also be very similar. Could this be that in the scheme of things if it is working well why change it? Depending on the rules of the business a budget will show what the company is working toward. Concepts used will assist managers to understand and engage with the economic and business realities of their firm.
The cash budget will show the simple side of things like Cash Inflows and Outflows. Interesting to note that it is only when the company receives the cash does the budget count, sales of product or when the product is handed over do not count. Another factor to take into consideration is that purchase of direct materials, direct labour, indirect costs or overheads are part of the cash outflow. They are included in this budget when they are paid not when they are incurred.
Scenario put forward by the author is the manager of the Purple Chocolates, What does the budget tell me? With a negative cash flow each month I need to approach the bank to negotiate an overdraft. Phone calls from the bank manager would not be a wise. I also don’t want to have cranky suppliers or even workers due to there being no money to pay them. The supply chain needs to keep flowing. Having an overdraft will ensure that the budget can be met however as the manager I need to add equity investors so as to provide a return on their capital in which they invested into the firm.
Next would be the budgeted Income Statements. These will show the expected outcome over a six month period. This looks a little confusing in a way. In one area the Purple Chocolates Statement show an expected profit of $825,000 and yet the Net Cash Flow is showing a negative of $325,000. Both the Cash Budget and the Budgeted Income Statements do not match each other. Reading further into this shows that a time lag has occurred between Cash Inflows and Cash Outflows compared to revenue actually earned and costs incurred.
Changes in the budget in the firm’s Assets, Liabilities and Equity will need to be made in the next step the Balance Sheet. The Balance sheet gives more insight into the goings on off the firm. What will this show me? Do I really want to know about what is around the corner? Are there any surprises lurking in the background that need to be looked at. These are some of the questions that will show up as I look at the final picture. Just like life can throw us curve balls so can the future workings of a business. No matter how hard the business tries to keep to their budgets unexpected surprises do arise. The point that arises here now is what will the business do if it occurs?
Before an answer can be made to these questions a look at the Budgeted Balance Sheets may give an insight into the finer details of the budget. In this area Assets, Liabilities and Equity are shown. I can see that this sheet is used to check the accuracy of the other budgets that a business prepares as well as showing the financial strengths or weaknesses at the beginning of the year.
The final part to this puzzle in the chapter is the Balanced Scorecard. This is the system that attempts to measure and provide feedback to the business to help implement strategies and objectives of the budgets. By using this it helps in the improvement of various internal functions and their resulting external outcomes.
There is so much that could be written in regards to this chapter and yet when I look at it I have come to the conclusion everyone is responsible for some part of the budgeting process. The chapter goes onto to talking about responsibility accounting where the business is broken into different units of measure and the performance of the units in terms of accounting results. Certain Managers will be assigned some aspect of the firm’s performance.
The Final key in this, is that managers need to make decisions. They need to lead the way and show that they can take charge of any situation and be able to work out how to budget effectively and ensure that their decisions are met positively.

Relationship between Financial Statements

Aristocrat Leadership changed

Executive Leadership
http://www.aristocrat.com.au/company/Pages/Leadership.aspx

Board of Directors
http://www.aristocrat.com.au/company/Pages/Board-of-Directors.aspx

Flowcharts

Glossary of Formulas used in Accounting

Equity = Assets – Liabilities

Assets = Equity + Liabilities

Assets = Equity + (Revenue – Expenses) + Liabilities

Or (if we ‘add’ Expenses to each side)

Assets + Expenses = Equity + Revenue + Liabilities

Dividends (d) = Operating cash flow (C) – Capital outlays (I) + Net cash flow from debt owners (F) that is, d = C – I + F

Economic profit = (RNOA – cost of capital) × NOA Where, RNOA = OI/NOA

RNOA = PM x ATO
Where, PM = OI/Sales and ATO = Sales/NOA

Profit margin (PM) as:
PM = OI/Sales
Where OI = operating income after tax

Asset turnover (ATO)
ATO = Sales/NOA Where NOA = net operating assets

Overhead absorption rate would be calculated as:

Total overheads of a production department / Level of activity
Cost-volume-profit analysis
y = f(x)
Where y = the cost of the venue
x = the number of tickets sold

Production + Opening inventory = Sales + Closing inventory

Contribution margin (CM) is the difference between sales revenue (S) and variable costs (VC):

Contribution Margin = Sales – Variable Costs
CM = S – VC

The accounting rate of return (ARR) can be calculated as follows:

ARR (%) = (Average net profit /Initial investment) x 100

Where an investment is expected to provide constant cash flow each year, the payback period can be calculated as follows:

Payback period = Initial investment / Cash flow

Glossary - Acronyms used in Accounting

GLOSSARY OF ACRONYMS
AASB - Australian Accounting Standards Board
ABR - Australian Business Register
ABN - Australian Business Number
A/C - Account
AS - Activity Statement
ASIC - Australian Securities and Investment Commission
ATI - Adjusted Taxable Income
ATO - Australian Taxation Office
BAS - Business Activity Statement
B/S - Balance Sheet
BSt - Bank Statement
CA - Chartered Accountant
C@B - Cash at Bank
C/F - Carry Forward
CFY - Current Financial Year
CGT - Capital Gain Tax
CPA - Certified Practicing Accountant
CWDV - Closing Written Down Value
DCL - Depreciation Car Limit
DRP - Dividend Reinvestment Plan/Scheme
EFT - Electronic Funds Transfer
ELD - Electronic Lodgement Declaration
ELS - Electronic Lodgement System
ETP - Employment Termination Payment
ETR - Education Tax Refund
FAO - Family Assistance Office
FAQ - Frequently Asked Questions
FBT - Fringe Benefit Tax
FY - Financial Year
GST - Goods and Services Tax
HECS - Higher Education Contribution Scheme
HELP - Higher Education Loan Programme
IAS - Instalment Activity Statement
ICAA - The Institute of Chartered Accountants Australia
ITAA - Income Tax Assessment Act
ITC - Input Tax Credits
ITR - Income Tax Return
KPI - Key Performance Indicator
LCT - Luxury Car Tax
LITO - Low Income Tax Offset
LFY - Last Financial Year
MAWTO - Mature Age Worker Tax Offset
M/L - Medicare Levy
MV - Market Value
M/V - Motor Vehicle
NIA - National Institute of Accountants
NOA - Notice of Assessment
NTAA - The National Tax and Accountants’ Association
OWDV - Opening Written Down Value
P&E - Plant and Equipment
P&L - Profit and Loss
PAYG-I - Pay As You Go Instalment
PAYG-W - Pay As You Go Withholding
PSB - Personal Services Business
PSE - Personal Services Entity
PSI - Personal Services Income
R&M - Repairs and Maintenance
RFB - Reportable Fringe Benefits
SATO - Senior Australian Tax Offset
SBDC - Small Business Development Corporation
SBE - Small Business Entity
SBR - Standard Business Reporting
SG - Superannuation Guarantee
SISA - Superannuation Industry Supervision Act
SISR - Superannuation Industry Supervision Regulations
SMSF - Self-managed Superannuation Fund
STS - Simplified Tax System
TAP - Tax Agent Portal
TD - Taxation Determination
TFN - Tax File Number
TIA - Taxation Institute of Australia
TPB - Tax Practitioners’ Board
TR - Taxation Ruling
WET - Wine Equalisation Tax
Y/E - Year End
YTD - Year to Date

Glossary of Terms used in Accounting

Balance sheet terminology

Balance sheet:
The financial statement that presents a snapshot of the company’s financial position as of a particular date in time. It’s called a balance sheet because the things owned by the company (assets) must equal the claims against those assets (liabilities and equity).

Assets:
All the things a company owns in order to successfully run its business, such as cash, buildings, land, tools, equipment, vehicles, and furniture.

Liabilities:
All the debts the company owes, such as bonds, loans, and unpaid bills.

Equity:
All the money invested in the company by its owners. In a small business owned by one person or a group of people, the owner’s equity is shown in a Capital account. In a larger business that’s incorporated, owner’s equity is shown in shares of stock.

Another key Equity account is Retained Earnings
Tracks all company profits that have been reinvested in the company rather than paid out to the company’s owners. Small businesses track money paid out to owners in a Drawing account, whereas incorporated businesses dole out money to owners by paying dividends.

Here are a few terms related to the income statement that you’ll want to know:

Income statement:
The financial statement that presents a summary of the company’s financial activity over a certain period of time, such as a month, quarter, or year. The statement starts with Revenue earned, subtracts the Costs of Goods Sold and the Expenses, and ends with the bottom line — Net Profit or Loss.

Revenue:
All money collected in the process of selling the company’s goods and services. Some companies also collect revenue through other means, such as selling assets the business no longer needs or earning interest by offering short-term loans to employees or other businesses.

Costs of goods sold:
All money spent to purchase or make the products or services a company plans to sell to its customers.

Expenses:
All money spent to operate the company that’s not directly related to the sale of individual goods or services.

Some other common terms used in bookkeeping include the following:

Accounting period:
The time period for which financial information is being tracked. Most businesses track their financial results on a monthly basis, so each accounting period equals one month. Some businesses choose to do financial reports on a quarterly or annual basis. Businesses that track their financial activities monthly usually also create quarterly and annual reports.

Accounts payable:
The account used to track all outstanding bills from vendors, contractors, consultants, and any other companies or individuals from whom the company buys goods or services.

Accounts receivable:
The account used to track all customer sales that are made by store credit. Store credit refers not to credit card sales but rather to sales in which the customer is given credit directly by the store and the store needs to collect payment from the customer at a later date.

Depreciation:
An accounting method used to track the aging and use of assets. For example, if you own a car, you know that each year you use the car its value is reduced (unless you own one of those classic cars that goes up in value). Every major asset a business owns ages and eventually needs replacement, including buildings, factories, equipment, and other key assets.

General Ledger:
Where all the company’s accounts are summarized. The General Ledger is the granddaddy of the bookkeeping system.

Interest:
The money a company needs to pay if it borrows money from a bank or other company. For example, when you buy a car using a car loan, you must pay not only the amount you borrowed but also interest, based on a percent of the amount you borrowed.

Inventory:
The account that tracks all products that will be sold to customers.

Journals:
Where bookkeepers keep records (in chronological order) of daily company transactions. Each of the most active accounts — including cash, Accounts Payable, and Accounts Receivable — has its own journal.

Payroll:
The way a company pays its employees. Managing payroll is a key function of the bookkeeper and involves reporting many aspects of payroll to the government, including taxes to be paid on behalf of the employee, unemployment taxes, and workman’s compensation.

Trial balance:
How you test to be sure the books are in balance before pulling together information for the financial reports and closing the books for the accounting period.

Page 1 - Welcome to my Blog

Welcome to my blog site
My name is Iris Onvlee and am in First year of doing a Bachelor of Business specialising in Accounting and Information Systems. I live in Gympie and needed a new direction in my career. I was studying to be a teacher but found that my job role in the school relies on me in the behind the scenes running of the school. So taking up Bachelor of Business (Accounting and Information Systems) will give me new skills within the administration area. I'm looking forward to the challenge ahead.

Hmmm as I ponder about my adventure through the years there has been many milestones to get to where I am today? I left school in 1975 as a 15 year old teenager to start my way into my life long adventure. I didn't get the chance to finish year 10 as my parents couldn't afford to keep me at school. My first job awaited me where I worked in the local cafe. Over the next few years I worked in various restaurants, cafes and fast food outlets.

At the young age of 22 I married and by the time I was 26 had two small children. In 1988 I went back to work as a Store manager in a local Big Rooster store after about 4 years I moved to where I live now to take on the role of opening a new store. At this point of time I had tendered my resignation due to family circumstances. A year later in 1994 my youngest child was born.

In 2000 my journey in a new future started. I completed my Certificate IV Teacher Aide and also started with CQU in a WIST Course with a bridging course for university. Over the next few years I gained my skills to start my degree.

In 2008 I then ventured to my first year in a Bachelor Of Learning Design. I completed the Diploma part of that course and changed over in 2013 to a Bachelor of Learning Management. During the year I was sidelined from my work with a foot reconstruction and during the 7 weeks away from my work I came to the conclusion that my passion was not for Teaching. This is where I decided that I was more suited to doing Bachelor of Business.

So as of this year I am now on my adventure to gain my Bachelor of Business (Accounting and Information Systems)I am working full-time and doing my degree via Distance Education Part Time.

I am looking at myself right now wondering how many 52 year olds would be in my boat. I hope to have my degree before my husband retires in 5 years.

Share Prices

Page 2 - Aristocrat Leisure Limited

The company that I have been given for this assignment is Aristocrat Leisure Limited. The company has a diverse portfolio which extends from electronic gaming machines (EGMs) and interactive video terminal systems through to online content distribution in regulated markets and complete gaming solutions for their customers.

Website
http://www.aristocrat.com.au/

Aristocrat offices are located in Australia, the USA, New Zealand, the United Kingdom, South Africa, Sweden, Argentina, Japan, and Macau. Each staff member is focused on fulfilling the needs of customers at all levels, while the global management structure drives innovation in business areas. Aristocrat’s core values of integrity and respect for the individual and the communities within which the company operates, underpin relationships with all stakeholders. Aristocrat is committed to working in partnership with industry, governments, and regulators to ensure it meets all responsibilities

Purpose
"To Create the world's greatest gaming experience - everyday"

Mission
"Áristocrat will build sustainable value for all stakeholders by providing innovative and entertaining gaming solutions to customers on a world-wide basis'

Core Values
"Integrity and respect for individuals and communities within which they operate underpin their stakeholder relationships. As a global business, they are committed to working in partnership with industry, governments and regulators to ensure that the company meets all of their responsibilities, be they commercial, regulatory, social or environmental."

Milestones
1933 - Originally Ainsworth Consolidated Industries and was founded in Sydney, Australia
1953 - Leonard Ainsworth took over his father's company and converts it to producing slot machines
1956 - Slot machines became legalised in New South Wales
1956 - Leonard Ainsworth also launched the company's first model called "The Clubman"
1960 - Company opens an office in Europe.
1961 - Company opens a new production site in Sydney; also launches the Aristocrat Nevada machine.
1964 - Company enters the Nevada market through a U.S.-based sales agent.
1965 - Company releases the first poker machine featuring electronic components.
1979 - Company releases its first video-based poker machine.
1988 - Company begins exports to the New Zealand market.
1994 - Leonard Ainsworth turns over control of the company to his sons, sparking a family feud; the company begins selling machines in Victoria.
1996 - Aristocrat goes public, listing on the Australian stock exchange.
1997 - The company launches the Hyperlink gaming system; the company pays a $500,000 fine to the Colorado gaming authority.
1998 - Aristocrat buys the South African distributor, Africa Leisure.
1999 - The company forms a refurbished machine division, Jubilee.
2000 - Aristocrat forms a joint venture with Japan's Sammy Corp.; the company is awarded a license to sell gaming systems in Nevada.
2001 - Aristocrat acquires Casino Data Systems, of Las Vegas.
2002 - The company buys out Sammy Corp.'s share of the Japanese joint venture.
2003 - The company strengthens its strategic alliance agreement with the United States' Mikhon Gaming Corporation.

What type of Pokies and Slot machines do Aristocrat Have?

Aristocrat has many types of Pokies and Slot Machines. See link below.

http://www.vegasslotsonline.com/aristocrat/

Page 3 - Corporate Governance Structure

Page 5 - Aristocrat Leisure News

NEWS STORIES ABOUT ARISTOCRAT LEISURE

http://www.dailymail.co.uk/news/article-2540049/Aristocrat-sparks-fracking-fears-invoking-ancient-right-MINE-residents-homes.html

http://www.afr.com/p/business/companies/aristocrat_ready_for_more_mobile_s4sQgKbYJ13ttUXRYqUvYP

http://www.brw.com.au/p/business/the_king_of_aristocrat_jamie_odell_grgQIoEmwq8NxcoQ7IvfFK

http://ggbmagazine.com/issue/vol-9-no-10-october-2010/article/jamie-odell-ceo-and-managing-director-aristocrat-technologies

http://www.pokies-casino.com/pokie-manufacturers/

http://www.dailymail.co.uk/news/article-2520077/Aristocrat-girl-Charlotte-Colquhoun-multi-millionaire-City-boss-Robin-Geffen--row-10-000-King-Wands.html

http://www.casinoenterprisemanagement.com/articles/september-2010/aristocrat-says-%E2%80%98hola%E2%80%99-mexico-city


http://calvinayre.com/2012/03/21/business/igt-goes-live-with-cloud-in-estonia/

Latest Yahoo market Prices

https://au.finance.yahoo.com/q?s=ALL.AX

Latest news as of 30/03/2014

Aristocrat Tops 2014 Slot Manager Survey
Winning Top Performing Game, Most Anticipated Game

http://www.aristocrat.com.au/Media/Documents/Aristocrat%20Tops%20in%20Goldman%20Sachs%20Survey.pdf

2014 AGM results

http://www.aristocrat.com.au/Investors/ASX%20Annoucements/2014%20AGM%20Results%20-%20Poll.pdf

CEO & Chairmans Address (AGM) 2014

http://www.aristocrat.com.au/Investors/ASX%20Annoucements/2014%20AGM%20Chairmans%20and%20CEOs%20address.pdf

Quick Facts about Aristocrat and its shares

Aristocrat Leisure Shares - Close of Trade 04/04/2014
https://www.google.com/finance?q=ASX%3AALL&ei=DKo-U5DcJYfDkgWOxgE

http://www.mideasttime.com/aristocrat-leisure-limiteds-reduce-rating-reaffirmed-at-morningstar-all/108198/
1. Shares opened at A$5.260 Monday 31st March
2. One year low of A$3.540 and one year high of A$5.550
3. Stock has 50 day moving average of A$5.12 and 200 day moving average of A$4.76
4. Aristocrat also has a a market cap of A$2.900 billion
5. Price-Earnings Ratio - P/E Ratio (A valuation ratio of a company's current share price compared to its per-share earnings)of 26.91

See explanation of P/E Ratio via video link
http://www.investopedia.com/video/play/price-to-earnings-ratio/

Aristocrat Leaisure's Environmental & Sustainability Plan

Anna Meresi Towan asked a question today via Facebook

if you have an airline company, does your company have any environmental sustainability plan or strategy?

if not, does my company have an Enviro plan/Strategy?

Anna - My answer to you is as follows :-

My Company is definitely not an airplane company. However for Aristocrat it means sustainability is about ensuring that their business and their industry has a long-term future – economically, socially and environmentally.

Our sustainability priorities are established at Board level and cascaded throughout the global organisation and expressed in the way we do business every day – our processes, our people and our products.

On page 11 Question 6 of my blog mentions part of this initiative through working closely with industry leaders to promote responsible gaming initiative and support the adoption of evidence based responsible gaming practices and policies.

Sustainable Practices

Aristocrat not only complies with the various environmental laws to which their operations are subject, but also aims to achieve a high standard of environmental performance across all their operations. To reduce their environmental footprint, mitigate regulatory risks and decrease costs, they have implemented a range of initiatives including:
• introducing energy efficiency and recycling programs across all our offices and sites;
• establishing water recycling systems in their Integration (manufacturing) Centres;
• removing hazardous materials previously used in products and ensuring suppliers comply with similar standards;
• increasing the usage of recyclable material in their products and packaging, and labelling of all plastics with the appropriate recyclable symbol and material type; and
• introducing practices to define environmental considerations in product design.

Through their centralised procurement system, suppliers tendering for work must provide information about their sustainability practices. Information provided on topics such as occupational health and safety, risk management, governance, community investment and environmental practices forms part of their supplier selection process.

Aristocrat's comprehensive procurement policy requires their employees to:
• adopt strategies to avoid unnecessary consumption and manage demand;
• foster a viable market for sustainable goods and services; and
• support suppliers who are socially responsible and adopt ethical practices.

Page 25 - Aristocrat Games

Aristocrat-US Press Room

http://www.aristocrat-us.com/#!press/c2414

The Walking Dead Slot Machine from Aristocrat Technologies

http://www.multivu.com/mnr/63298-aristocrat-unleashes-the-walking-dead-slot-game

http://www.youtube.com/watch?v=p0qIHYL4_Pw

G2E 2012: Aristocrat Technologies

http://www.youtube.com/watch?v=GDba7ntTHHU

http://www.4-traders.com/ARISTOCRAT-LEISURE-LIMITE-6491399/news/Aristocrat-Leisure---Tops-2014-Slot-Manager-Survey-Winning-Top-Performing-Game-Most-Anticipated-G-18139241/

Page 24 - Study Guide 3

Study Guide – Chapter 3 – Introducing financial statements

Financial Statements where do they come in to the business situation? Without them I envisage a world in chaos money being used and no accountability.

Question 3-1

1. What is wrong with just doing what 'works' in relation to analysing financial statements?

By doing what ‘works’ in relation to analysing statements can in itself present many dangers. Yes I could agree with, if the system works don’t touch it keep working with it. However with the changing of time, systems are being constantly upgraded and unless we take steps to follow the procedures set in place, analysing of financial statements may become flawed. Errors may occur and systems fail.

I see financial statements as a story of what is happening within the organisation. Assets to liabilities, balance sheets to income statements have a role in the story. With an accountability of business features it would be useless to keep going.

There are plenty of experienced practitioners in our capital markets.Why do we not simply find out what most are doing and just do this ourselves? What do you think and why?

Each company has its own role within the world. You wouldn’t ask a butcher to bake a loaf of bread or nurse to be a bank clerk each role has its own purpose. So simply doing what most are doing is not the right solution. We must develop our own unique way of business.

Question 3-2

What is the benefit of having a structure, such as the du Pont Company’s framework, to help use ratios to analyse a firm's financial statements? Is it any better (or worse) than simply doing what experienced practitioners do? Why or why not?

To understand the du Pont Company Framework I felt I needed to find out the full definition of what it means.

Definition:

A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE). It is also known as "DuPont identity".

DuPont analysis tells us that ROE is affected by three things:
- Operating efficiency, which is measured by profit margin
- Asset use efficiency, which is measured by total asset turnover
- Financial leverage, which is measured by the equity multiplier

ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity)

I would have to agree that we do not just rely on a firm’s financial statements. Looking beyond the financial statements and delving into the nuts and bolts of the business we will be able to determine how the company is performing. I would see it as a way of what would help me if I was the business organisation and how I could improve on the quality of business activities to ensure that my company was performing to the best of its current standings.

Page 23 - Who wins from 'Big Gambling?

Have you ever considered who really wins form Big Gambling?

Statement within this article states - It merely transfers wealth from poor to rich and may in fact reduce economic activity due to diverting gamblers from productive labour.

http://theconversation.com/who-wins-from-big-gambling-in-australia-22930

Page 22 - Change in Fiscal year reporting from 31 December 2012 to 30 September 2012

Going through my financial statements I have found a change of end of financial year, in 2011 my year ended is 31 December in 2012 it then becomes 30 September 2012 and then continues on from that point.The reason for the change was for a closer alignment with the sales cycle.

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