step 3-5, 7-8

Information about my company

Mears is a UK company. They use British pounds are their currency. Their financial year ends 31st of December each year. There share price currently trades at 188.50 pounds at 6:48 27/07/2021. They are a housing and care provider in both the public and private sectors. They help their clients develop, fund and implement their placemaking ambitions. Placemaking is defined as the process of creating quality places that people want to live, work, play, and learn in. Their services include; housing management, housing maintenance, capital works, house building, facility management, etc. The company was first created in 1988. In 1996, Mears went public, with Bob Holt as chairman.

Talking with other students about my company

I talked with Dayanara in the Brisbane tut on 29th July. Her firm is ICandy, which a gaming company. They are an Australian firm with many locations in Asia as well. I told her about my company and some things I have learnt about them. We also discussed how we were going with our blogs (we have followed each other) and with our Excel spread sheets.

I spoke with Sarmad in a zoom breakout room about his company Centrica which is a UK company. He told me the company was started around 1800 and sold gold and gas. They helped the UK government in WW1 and WW2 by supplying gas to the soldiers. He told me their share price was high until recently the shareholder and stakeholder protested which forced the share price down last year. He is not sure whether this will be a good or bad thing for his valuation.

KCQ’s about company and its financial statements

The first issue that came up in my mind when I saw my company was that they used British Pounds as their currency. I believe it is harder to relate to a firm’s financial statements when their currency is foreign to me. The whole report is almost 200 pages, it was hard to know what to read and what to skip.

First thing I noticed when reading through their annual report for 2020 was they say they have a lot of long contracts with the government for housing services. A note of thought, completely unrelated to the subject of financial statement analysis, why is a firm such as Mears, with so much focus on public housing including the housing of asylum seekers, not a non-profit organisation?

I can see in the revenue for 2020 compared to the previous year (along with the chairman statement about it) that the COVID 19 pandemic had an effect on the firm’s profits.

What is right of use asset?

No dividend was paid in 2020. I wonder how this will affect my valuation in my assignment.

What does H1 and H2 mean? Half year?

Information about my company

Mears is a UK company. They use British pounds are their currency. Their financial year ends 31st of December each year. There share price currently trades at 188.50 pounds at 6:48 27/07/2021. They are a housing and care provider in both the public and private sectors. They help their clients develop, fund and implement their placemaking ambitions. Placemaking is defined as the process of creating quality places that people want to live, work, play, and learn in. Their services include; housing management, housing maintenance, capital works, house building, facility management, etc. The company was first created in 1988. In 1996, Mears went public, with Bob Holt as chairman.

Talking with other students about my company

I talked with Dayanara in the Brisbane tut on 29th July. Her firm is ICandy, which a gaming company. They are an Australian firm with many locations in Asia as well. I told her about my company and some things I have learnt about them. We also discussed how we were going with our blogs (we have followed each other) and with our Excel spread sheets.

I spoke with Sarmad in a zoom breakout room about his company Centrica which is a UK company. He told me the company was started around 1800 and sold gold and gas. They helped the UK government in WW1 and WW2 by supplying gas to the soldiers. He told me their share price was high until recently the shareholder and stakeholder protested which forced the share price down last year. He is not sure whether this will be a good or bad thing for his valuation.

KCQ’s about company and its financial statements

The first issue that came up in my mind when I saw my company was that they used British Pounds as their currency. I believe it is harder to relate to a firm’s financial statements when their currency is foreign to me. The whole report is almost 200 pages, it was hard to know what to read and what to skip.

First thing I noticed when reading through their annual report for 2020 was they say they have a lot of long contracts with the government for housing services. A note of thought, completely unrelated to the subject of financial statement analysis, why is a firm such as Mears, with so much focus on public housing including the housing of asylum seekers, not a non-profit organisation?

I can see in the revenue for 2020 compared to the previous year (along with the chairman statement about it) that the COVID 19 pandemic had an effect on the firm’s profits.

What is right of use asset?

No dividend was paid in 2020. I wonder how this will affect my valuation in my assignment.

What does H1 and H2 mean? Half year?

Step 2

KCQ Chapter 2 and Chapter 3

It’s hard to write KCQ’s because every time I start writing I end up just summarising points of the study guide because like that’s what I agree with and understand. Key concepts that stand out to me within the text included investments are successful dependant on the firm’s future earnings which, I believe, I truly impossible to determine accurately using past data which is all that is available. This is obvious very different to the finance theories that I have been taught which were presented to me as being essentially ‘fact’. This makes me believe an open mind if absolutely necessary to invest successfully. Also, as the study explains, a focus on the firm’s strategy because this paint a picture of the future, more so that share price. One of my biggest takeaway’s, is to always remember that a firm’s annual report is just another form of marketing and to always absorb the information with a grain a salt.

Honestly, I had no questions at this stage because I believe the content is pretty basic this early and its stuff that I have learnt before. As I being to read further into the study guide I am expecting to have more questions.

It is very humbling for mankind to think about how much we still don’t know, even about constructs we have created like the investing in businesses. Over my studies, I have slowly begun to understand ratios more and more by using them in many different units and I believe once you being to understand how they work and how clever they are at communicating information about the relationship of two different numbers, it is almost a light bulb moment. At the very base of my understanding of ratio’s is based of baking. 2:1 is two parts milk, to one-part eggs and such. Whenever a ratio seems too complex and I am struggling to understand the information behind it, I take it back to that basic concepts of ratio I learnt in cooking.

‘is there any reason to think that a firm’s financial statements can help us predict the future performance of a firm?’ ‘there can be as many views of value as there are people doing the analysis.’ ‘any prediction will be wrong.’ – these three comments stuck out to me in the reading. These are concepts that I want to continually remember throughout my assignment (and beyond) when I begin to get lost in my number and ratios. It is a good reminder to take a step back, and keep an open mind.

The last half of chapter 3 was quite dense mathematical content. I was a little lost with the complicated formulas but I think I understand the theory behind them. I believe they will make more sense upon a second reading of the chapter and then also when I use them in my assignment.

Step 1

KCQ Preface and Chapter 1

The regulatory transparency of firm’s financial statements, I believe is super helpful for investors to understand more about a firm. I was surprised to know that this was not always publicly available. I wonder how financials statement would have been written before this, and how this affected investors decisions.

The comments on ‘business reality’ and utilising the information within financials statements ALONG SIDE other gathered information to value a firm is such an important and overlooked concept.

I really value your comment regarding having the opportunity to disagree with the information within the study guide and unit because in previous units, this broad subject has been presented to me as sort of a black and white case and doesn’t encourage alternatives.

I really interested in this unit because as you as it will tie my knowledge together. I also am very looking forward to having a working excel spreadsheet that values firms that I will definitely use in the future. I believe a very base level of information from this unit should be taught in high school.

I was taught in economics that the share price of a company represents its true value and the market will adjust shares to reflect such. I now understand that there is the opportunity to see where the market has not represented a stocks true value using analysis of many factors of a firm, not only the financials statements. It is very reassuring to be taught fundamental analysis in this unit and to know that the market doesn’t always value stocks perfectly. I have worked with DCF models before in previous units and I very much enjoy them. To me they make a lot of sense and are so much fun to construct and play around with in excel.

Step 3 Restated Financial Statements

Hey guys!

I’ve attached a draft copy of my restated financial statements. Also some comments of problems I encountered while restating them. 🙂  Company Spreadsheet

The major problem I had with restating my financial statements is trying to understand what to include and what to leave out. My financial statements were a lot longer and more complex than a lot of my classmates. My financial statements also had a lot of perhaps unnecessary headings and separations within headings. When looking at the financial statements it probably made it a lot clearer but when having to restate them it made them just that little harder. When restating the income statement, my revenue only had ‘sales revenue’ so I assumed that I had to check the notes for it to find financial revenue but my financial statements had no notes for revenue. I discussed with my tutor and we concluded that financial revenue would be zero. Maria’s videos on restating the three financial statements helped immensely with determining what was operating and what was financial just from looking at what she put into either section. I also noticed that there is a lot more operating factors than financing factors.

Top 3 Blogs

Hello!

I spent the afternoon reading lots of great blogs from people in my accounting class. I gave lots of students feedback on the content in there blog. However I had to make a list of just my top three blogs. So I wanted to quickly post on her my three favourite with links and also a little description as to why I like them.

Firstly…

https://ashleighlouisecqu.wordpress.com/

Ashleigh did a great job on her blog. She was very clear about what her company does. She also added lots of easy to rea, useful information about her company. I enjoyed her post ‘The Journey Begins’ as it highlights her lifestyle, what she does and also her goals. It’s so interesting to see all the different people studying this unit.

https://accounting843665782.wordpress.com/

Shaun was also one of my top three favourite blogs because of how enthusiastic and excited he seems abot his blog and his company. He’s got a number of really good posts about his company and about himself. It’s excellent that he included not only great facts about his company but also his honest and personal opinions.

https://gregsaccounting.wordpress.com

Greg also made my top three because he honestly discussed his concerns with using technology and having to create a blog which I related to. He alsohad a look into other people company and commented on them to compare and contrast them to his own company.

These blogs are definitely worth a look at 🙂