Jumping on to Week 12 - Ass 2 Step 3

I think this image must just perfectly sum up my mind for now. Loving the study grind.

Hi Everyone,

It's certainly been a hot minute!

As per usual, I have reached the stage in the term where I am definitely behind, but I just keep assuring myself the finish line is near. :) Caffeine is my best friend at midnight and no surprise this country gal is listening to the new Morgan Wallen album on repeat. But hey ain't no rest for the wicked.

I do apologies for the late blog posts, but as the old saying goes better late than never.

Diving straight into Step 3, this is a summary from my ratio findings, accounting drivers and both in comparison to the companies Downer EDI, assigned to Breeanne Cox, and Cogstate Ltd, assigned to Suet Ying Ng.

I have attached links to their blogs here:

Breeanne's blog:

Assignment 2 - Step 3 Commentary

Suet's blog:

Step 3-6 – Financial Statement Analysis

Strengths

• Consistently profitable – Net Profit Margin peaked in 2023.

• Positive free cash flow and economic profit each year.

• Effective use of current assets (especially inventory and receivables).

• Stable earnings and operational performance.

  
  

Risks

• Weak liquidity – Current/Quick ratios consistently below 1.

• High and rising debt – Debt/Equity reached 132.3% in 2024.

• Negative interest coverage, signaling solvency risk.

• Declining asset efficiency – Lower asset turnover in 2024.

• High dividend payout despite financial stress – potentially unsustainable.

  
  

Trends

• Growth slowed in 2024 – Sales and operating income growth fell.

• Value creation slowing – RNOA and asset efficiency declined.

  
  

Peer Comparison

• Cogstate: High margins, low debt, strong liquidity.

• Downer EDI: High efficiency, but volatile and highly leveraged.

• CTI: Balanced profitability, but weak liquidity and higher debt

For further info please refer to my draft copy attached.

Bri - The Rookie Accountant

Assignment 2 - Step 3 - 6 Brianna Whitaker.docx

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