Topic 8 Financial Statements

hello I am planning to submit my RAP for this may submission. i have chosen topic 8 . both companies have different year endings Main company A - December 31 Competitor company B - March 31 Should i be doing pro rata in order to analyse the financial data . or any other suggestion ? Also for Company B - from April 2016 to December 2016 - un- audited financial statements have been produced on its website. but i cant take un - audited as this cant be accurate. Regards Nabs

i also have one more query . Company A has consolidated financial statements where as company B has Single company financial statements. What am i supposed to do in such a situation ?

Find the unconsolidated financial statements for your company A

@trephena please reply to my query as soon as possible. i have tried searching for unconsolidated FS . but i may not have access to it. what should i do for the financial year issue ? @Ehsan

there is any solution like changing the consolidated data to single entity ? as consolidted FS are very complex. and i have less time . i need to calculate ratios , produce graphs , make appendices , my excel is not yet ready . please help .

Comparing un-consolidated with consolidated is difficult and not recommended. Even in operating segment there is little information provided to make an effective analysis (if there is, you can use that). Problem is that it is like group with single entity. Try to find a competitor as a group. Year end difference is not major here - only 3 months. State that in the limitation.

And also dont use un audited information.

but un audited information is only provided. at this moment how will i search for a competitor as a group ?

for the period april - december 2016 , un audited info is provided for company B . rest of the reports are audited.

after i mention that in limitation about the year end difference , then in appendices what i should do ? like in the excel how i should adjust the financial statements?

should i do pro rata calculation for company B in order to align with company A's year end ? for eg for the year 2014 - i will take company B's 3 months from 31st march 2014 ending and rest 9 months from 31st march 2015 ending . total 12 months adjusted according to company A . is that the right way ? @trephena @OBU Mentors

@trephena @ehsan Hi Ehsan, hi Trephena, would be very grateful if you could advise me... When doing vertical analysis total revenue was taken as a base (not net sales). Now i am starting to have doubts whether this is the correct approach. Company under investigation indicated that royalty income and revenue from manufacturing activities and other services is included in other revenue. If it would be only royalty, i would take net sales as a base, but taking into account that there are some manufacturing activities and they probably end up in COGS (no details about COGS composition are provided by the company), I thought that that would be more correct to use the Total revenue figure as a base. Is that a correct way of thinking...? Should i indicate this within limitations? Thank you!

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