ACCT11081 Introductory to Financial Accounting

Term 2 2020 CQUniversity

Hayley Sheehan

Assignment Step 3Comment by Hayley Sheehan:

Step 3: Identifying my company, posting on my blog some background information about my company and its industry, and commenting on other people’s bogs within the unit.

I was waiting for the clock to hit 5pm on Friday week 1 to see what company I was given. As I was looking through the list of names and looking at the variety of different companies and the industry that they are a part of I was worried that I would get a really hard complicated company, making it overwhelming and stressful. However, after finally finding my name within the numerous other students I was pleased to have received the company ‘Farm Pride Foods.’ Although I did not know what this company is, nor have I heard of it before, I was relieved to have one of a relatable presence as it is relevant to food, an essential product; however, if I received a company which was an industry which I do not know a lot about, if anything, like mechanics or electrical I would be severely stressed and overwhelmed with it all.

Additionally, on the home page of the website I could clearly gather that the company has something to do with eggs. Which I thought was quite interesting to myself as I live on a property and we have chooks which lay eggs; therefore, I might be able to make some connections within the business to my home life. As I was looking at the list of students and their companies and the notes in some students company rows, I thought I wonder if I get a note for my company, to assist me in finding Farm Pride Foods annual reports or will it be simple to locate their annual reports? I checked my company and I did have a note as to where I can locate the annual reports which was so helpful as I was looking through their website to gain some further knowledge about the company, however did not yet come across the annual reports. But thankfully for the note which Martin Turner put in on the spreadsheet I was able to locate the annual reports so much easier! Farm Pride Foods is a within the food product industry within Australia, meaning that the currency is Australian Dollar, YAY! As I was remembering back to what company I had apart of ACCT11059, I realised that it was a company, known as Silver Chef, which is in the hospitality retail industry. I found this interesting as I look back on it now that they interconnect with each other, like cooking equipment and potential ingredients.

After analysing and getting to know my firm I have learnt that Farm Pride Foods is listed on the ASX (Australian Stock Exchange) and they have been within business from the farm to the table for over 80 years. Along with this, the hens they own to produce the farm fresh eggs to supply Australia and overseas countries lay over seven million eggs per week. Farm Pride eggs “are in supermarkets across the eastern seaboard [along with a] manufacturing egg products at the Keysborough Processing Plant.” (Farm Pride Foods, 2019). Furthermore, Farm Pride Foods “provide their products to all commercial markets including the airline, hotel and restaurant industries amongst others.” (Farm Pride Foods, 2019). Farm Pride Foods started their journey “as the Victorian Egg Marketing Board in 1937, today [their] eggs and egg products are available nation-wide and exported to Asia.” (Farm Pride Foods, 2019). I did not realise that companies can export eggs overseas due to salmonella and other potential risks associated with foods being exported.

Key Concepts and Questions about Farm Pride Foods annual reports:

When I was looking through my firms annual reports I was looking at some things in closer detail compared to others ensuring I was noting down all my key concepts and questions to discuss with others and within this step to ensure I gain a better understanding of my firm. Some of my KCQ’s are as follows: Why would a firm change some of there account names within the annual reports? Why would the company increase their total liabilities but not increase the assets within the firm? And, what happened between 2018 and 2019 which resulted in a decrease in total assets?

Furthermore, a key idea and note that I wrote down was that Farm Pride Foods annual report is fairly similar to my previous company, Silver Chef, in ACCT11059 making it easier for me to understand and gain further knowledge. However, I am still a little confused as to why my firm, all of a sudden decided to change the name of the account in 2019 compared to the previous years.

Farm Pride Foods Annual Report Analysis:

After looking through my firms’ financial annual reports, I believe that the two main accounts in the Consolidated Statement of Financial Position (Farm Pride Foods, 2017, 2018, 2019), are the total assets and the total liabilities. In 2017 the total assets for Farm Pride Foods was $62,283; in 2018 total assets of $73,959; and a total assets amount in 2019 of $70,302. Therefore, it can be interpreted that between 2018 and 2019 something happened within the company itself or an issue globally. This may be that something diminished the reputation for the company due to an error. From 30 June 2017 to 30 June 2018, there was an increase in total assets amount by $11,676, however, the firm suffered from a decrease between 30 June 2018 to 30 June 2019 by $3657. This may not seem like an awful amount however, due to current circumstances with the global pandemic it would have significant impact upon the business, their processes and procedures to function to full capacity to ensure the company is making a profit.

Another account which I believe has a significant impact on the firm itself, is the firm’s total liabilities. In 2017 the total liabilities were situated at $15,643; in 2018 a total liabilities amount of $26,816; and in 2019 the total liabilities were $27,017. Therefore, this shows that during this three-year period that the firm’s total liabilities are increasing. From 30 June 2017 to 30 June 2018 the total liabilities increased by a total of $11,173. This is a significant amount to have as a total liability as the company is not increasing their total assets as much as what they are increasing their liabilities over this duration of time. From 30 June 2018 to 30 June 2019 it can be identified that the firm has increased their total liabilities again by $201. Overall, the firm has increased the total liabilities from 30 June 2017 to 30 June 2019 by $11,374. Moreover, I believe it would be quite interesting to be able to investigate into this firm further for the following year, of 2020 since the global pandemic of COVID-19 hit and as to how much this has affected the business financially.

Furthermore, Farm Pride Foods annual reports show a variety of financial statements, allowing for differing individual interpretation depending on the various circumstances within the firm. The significant account within the Consolidated Statement of Profit or Loss and other Comprehensive Income statement I believe is the sales revenue. After thoroughly analysing this financial statement it is evident that from 30 June 2017 until 30 June 2018 there was a significant decrease of a total of $11,999 in sales revenue. Following this, sales revenue from 30 June 2018 until 30 June 2019 increased by $780. Overall, from 30 June 2017 until 30 June 2019 it is evident that a total decrease in sales revenue is $11,219. Furthermore, between 2018 and 2019 Farm Pride Foods changed the name of some accounts on the Consolidated Statement of Profit or Loss and Other Comprehensive Income statement.

Figure 1: 2017 Consolidated Statement of Profit or Loss and Other Comprehensive Income - Revenue and other income category. (Farm Pride Foods, 2017, p. 16).

Figure 2: 2018 Consolidated Statement of Profit or Loss and Other Comprehensive Income - Revenue and other income category. (Farm Pride Foods, 2018, p. 15).

Figure 3: 2019 Consolidated Statement of Profit or Loss and Other Comprehensive Income - Revenue and other income category. (Farm Pride Foods, 2019, p. 16)

Therefore, from these screenshots of the Revenue and other income category within the Consolidated Statement of Profit or Loss and other Comprehensive Income statement that these annual reports have changed from 2017 and 2018 to 2019. The 2019 evidently has different labelling for the account instead of simply calling it sales revenue or other income it has; revenue from contracts with customers and interest revenue and other income. I found this quite confusing as the company has originally just had the simpler accounts however decided to change it in 2019.

Furthermore, I am happy with the company I was provided with as it is an Australian company which used the currency of Australian dollar making it easier to understand as I do not know much about different currencys.

Knowing my Firm:

After looking for some useful sources in regard to Farm Pride Foods I have been able to find a couple news articles and other uses of various resources including a YouTube channel, and website just to name a few. Furthermore, Farm Pride Foods have had to overcome some challenges which significantly impacted upon the business and the income into the business. The main challenge for the firm was there was an oversupply of eggs resulting in waste from the hens as the firm could not send them anywhere which resulted in the company receiving less income consistently. Over time Farm Pride Foods would have faced plenty of opportunities, however, the main opportunity which I could identify is that the supply and demand for eggs has increased over time, therefore, the company is selling more eggs, to bring in an income within the firm. However, a significant challenge for the firm during the period of the oversupply of eggs resulting in financial difficulty. Furthermore, Victoria regularly have salmonella outbreaks therefore, this could also have impacted the production and process of Farm Pride Foods since the company is solely based around eggs.

To find discussion and further background information about my company, Farm Pride Foods, it can be found on my blog. The link to blog is as follows: https://hayleycqu.home.blog/

A news article I located relevant to Farm Pride Foods as they are “warned and their shareholders are warned of a massive drop in half-year earnings due to drought and continuing national over-supply of eggs.” (Rachel Williamson - Stockhead, 2019). The news article link is listed here: https://stockhead.com.au/food-agriculture/has-the-egg-industry-killed-the-golden-goose/

Another news article I found on Farm Pride Foods in relation to “Drought frying Farm Pride Egg Revenue” (SBS News, 2019). The link as follows: https://www.sbs.com.au/news/drought-frying-farm-pride-egg-revenue

Farm Pride Foods also have a YouTube channel which allows people to subscribe to their channel allowing for more publicity and awareness about the firm. On the firms YouTube channel, the videos within the channel are cooking videos showing the use of Farm Pride Food products in recipes which everyone can join in with, making them inclusive and engaging for the audience watching the videos. The link to their YouTube channel is as follows: https://www.youtube.com/user/FarmPrideFoods

Discussion with peers:

Throughout this unit so far, I have found discussing with my peers to be very helpful as I get to receive more information from an outside person who does not actually fully know my company. I tried to discuss with another student to compare our companies who are in a similar or same industry however, no one took this opportunity up, as I wanted to see the difference and whether there was a similar company overseas and how it compares to the Farm Pride Foods in Australia. However, I was able to have discussion with others particularly on the unit Facebook page. From peer discussion I was mentioned that my company could potentially be financing assets using loan instruments. I found this quite interesting and thought, can you actually do that? I have provided screenshots below of discussion with peers on the unit Facebook page.

This screenshot below shows I did try and discuss with others about my firm, but no one contacted me unfortunately with similar or same company to compare our results and findings within our annual reports of our firm.

Overall, I have found this step quite easy and understandable. I have enjoyed this step, however, could be improved by being able to discuss with others with same or similar company to identify similarities and differences within the company. I am very happy with the company I was given, even though I had never heard of it before it was a simpler company therefore, easier to collate information from to enhance my knowledge and understanding of the firm. At this point in time I do not have any concerns regarding my company or the task set. So far I have found this units annual reports for my firm easier than the firm I was given in the ACCT11059 as it seemed to be very overwhelming as it was my first SUN (Start Uni Now) course and there were so many different foot notes which you were required to look at however so far my company for this assignment has not got as many. Additionally, after learning how to actually read a firm’s annual report statement in ACCT11059 I have found this unit so much easier as I was not constantly having to review the content and what everything means for each different section in the annual report of the firm.