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Recommendation Of Allocation Of Investment Money

2717 words - 11 pages

Recommendation of allocation of investment moneyExecutive SummaryThe report recommends that AMPL invest $100,000 in Super Cheap Auto. The company is likely to grow and pay dividends and is a continuing investment. Pacific Brands would be a poor investment due to its current restructuring and large debt, and Harvey Norman has had a recent decrease in profits and has little working capital. Although a charitable donation would result in a large tax reduction, the outlay of the gift would be too large an amount to recoup from the marketing benefits of making a charitable donation.Table of ContentsExecutive Summary page 1Introduction page 3Analysis pagePacific Brands pageHarvey Norman pageSuper Cheap Auto pageCharitable Donations pageConclusion pageReference List pageAppendix pageIntroductionThis business report is written by the asset investment team for Accounting Managers Pty Ltd 'AMPL' in response to a recent review of the 2010 cash budget which suggested a sustained surplus of $100,000. The report addresses where best to allocate this money.The report assesses three public companies; Pacific Brands, Harvey Norman and Super Cheap Auto as possible investments. The report also considers whether some or all of the money should be allocated to charity. In doing so it weighs up whether the benefits of donating to charity are worthwhile.This information is provided as a basis for recommending the best possible way for AMPL to allocate the funds.AnalysisPublic CompaniesPacific BrandsFinancial AnalysisBasic Financial InformationBalance Sheet

$ Value of Assets

$ Value of Liabilities

$ Value of Equity

Raw numbers from the 2009 Balance Sheet
(consolidated entity)

2 225 495

958 442

1 267 053

Raw numbers from the 2008 reports
(consolidated entity)

2 846 392

1 156 304

1 336 088

What is the increase/decrease from 2008 to 2009

Decrease of
260 897

Decrease of
197 862

Decrease of
69 035

Income Statement

$ Total Revenue Before Gross Profit

$ Gross Profit

$ Total Expenses (After Gross Profit)

$ Net Profit after Interest and Tax

Raw numbers from the 2009 Income Statement
(consolidated entity)

2 000 035

855 814

1 046 445

241 490

Raw numbers from the 2008 Income Statement
(consolidated entity)

2 116 640

940 426

727 543

160 927

What is the increase/decrease from 2008 to 2009

Decrease of
116 605

Decrease of
84 612

Increase of 318 902

Increase of
8 563

Balance Sheet Internal Comparison

$ Value of Assets

$ Value of Liabilities

$ Value of Equity

Raw numbers from the 2009 Balance Sheet
(consolidated entity)

Current:
699 115
Non Current:
1 526 380

Current:
361 427
Non Current:
597 015

Issued Capital
1 218 577
Retained Earnings
141 047

Raw numbers from the 2008 reports
(consolidated entity)

Current:
748 364
Non Current:
1 738 028

Current:
290 649
Non Current:
865 655

Issued Capital
1 218 577
Retained Earnings
136 140

What is the increase/decrease from 2008 to 2009

Current:
Decrease of...

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