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BUSN1110 Accounting for Business
Group Assignment, Semester 2 2022
(100 marks)
As per the course outline:
• The assignment will be completed in groups of three students.
• The assignment is due in Week 12, as communicated in the course outline
(unless otherwise communicated on Blackboard and discussed in class).
• Assessment weighting: 20%
• Details of the assignment requirements will be published on Blackboard.
• Further discussion concerning the assignment will happen in class.
INSTRUCTIONS
• The assignment is described below.
• This assignment is to be prepared in MS Word and/or MS Excel. All
supporting calculations should be provided as part of the deliverable.
• In addition, a plagiarism (academic integrity) declaration must be
submitted, signed by each group member – refer to Appendix.
• Concerning font formatting, use 12-point Times New Roman font, line
spacing 1.5.
• Submission of files will be done via the Blackboard site for this course.
• All files must use the following naming convention:
BUSN1110_StudentID1_StudentID2_StudentID3
[e.g., BUSN1110_20210001_20210002_20210003].
This is the ONLY acceptable naming convention to use. As this assignment
is to be completed in a group of 3 students, only 1 submission is required
per group.
• You are required to keep a copy of your assignment.
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Assignment: Analysis of Harvey Norman Group (100 marks)
Harvey Normal Group (ASX: HVN) is an integrated retail, franchise, property
and digital enterprise. The Harvey Norman® brand name is a retail icon
throughout Australia with 57 franchised complexes in New South Wales, 1 in the
Australian Capital Territory, 36 in Queensland, 38 in Victoria, 18 in Western
Australia, 10 in South Australia, 6 in Tasmania and 2 in the Northern Territory.
Brands sold across the 168 Harvey Norman® franchised complexes throughout
Australia are market leaders in the core audio visual and technology segment.
According to Annual Report 2021:
As with FY2020, the world continues to be impacted severely this year by the
ongoing effects of COVID-19. The 192 franchised complexes in Australia and the
107 company-operated stores in 7 countries continue to be subjected to various
Government mandated closures.
The number one priority has been to keep our customers safe, protect our staff
and enable them to do their job in a safe manner. We thank each and every one
of you that has supported us during this prolonged unprecedented uncertainty. It
is with your support and trust that we continue to build our brands and provide
our customers with an unparalleled retail experience – whichever way you
choose to shop with Harvey Norman.
A common theme in the countries in which we operate has been low interest rates,
strong housing prices and strong home renovations, booming stock markets and
record household deposits. This has translated to unprecedented sales for the
Harvey Norman brands.
You are required to download the 2021 annual report for the Harvey Norman
Group and perform an analysis of the group by providing a response to each of
the following requests and questions:
1. Briefly describe the Harvey Norman Group in a maximum of 750 words.
I’m interested: Which is the most profitable segment in the Group?
Describe their franchise business model.
(5 marks)
2. Read (1) the Chairman and CEO’s Report and (2) the ‘Operating and
Financial Review’. Perform a SWOT analysis of the Harvey Norman
Group. Maximum 1,000 words.
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Note: You are not restricted to those sources to perform the SWOT
analysis.
(20 marks)
3. Briefly describe 5 key financial highlights from the 2021 financial year for
the Harvey Norman Group, based on the above 2 reports (that which you
deem most significant). Briefly discuss. Maximum 1,000 words.
(10 marks)
4. What financial impact did Covid-19 have on the Group? Maximum 1,000
words. Refer to the information contained in (1) the Chairman’s and Group
Chief Executive Officer’s Report and (2) the Operating and Financial
Review, and (3) notes to the annual financial statements.
(5 marks)
5. Refer to pg. 78 where the auditor (EY) describes their concern with
‘Recoverability of Receivables from Franchisees’. Provide a brief
description of this matter using the EY auditor’s report and any other
information contained in the Annual Report.
(5 marks)
6. Perform a financial ratio analysis on the annual financial statements of the
Harvey Norman Group, using the ratios covered in class. The ratios must
cover 2020 (prior year ‘PY’) and 2021 (current year ‘CY’). From these
ratios (which you need to put in a table), answer the following questions,
related to the 2010 financial year:
a. How well has the Group performed? (Comment on profitability and
working capital management)
b. Are you concerned about the cash flows of the Group? (Interpret the
Statement of Cash Flow)
c. Is the Group highly leveraged and struggling to repay its debt?
Maximum 3,000 words (i.e., total for all 3 answers must be less than 3,000)
(30 marks)
7. Assume the following transactions occurred for the Harvey Norman Group
in 2021. Draft an accounting worksheet to record them, using column
names which correspond to the line items in the financial statements e.g.,
‘cash and cash equivalents’ and ‘Interest-bearing loans and borrowings’
etc.
Note: These transactions are hypothetical and should not impact any of
your responses to the questions above.
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‘HNG’ refers to the Harvey Norman Group.
There is no need to put these transactions in date order – simply
label them ‘transaction 1’ etc.
Transaction 1: HNG repaid $45m to Bank A.
Transaction 2: HNG declared and paid $25m dividend to shareholders of the parent
company.
Transaction 3: Inventory of $23.75m was bought on credit in March from an electronics
goods supplier.
Transaction 4: The stock (inventory) from transaction 3 was sold in April 2021. 75%
was for cash, 25% on credit. This stock was sold for $36m.
Transaction 5: Inventory (appliances) was bought for cash, $12m.
Transaction 6: The stock (inventory) from transaction 5 was sold for $15m cash.
Transaction 7: HNG paid lease costs of $15m in July 2020 for its stores located in
shopping malls (treat the lease as a normal expense).
Transaction 8: In September $12m was paid to the ATO as income tax.
Transaction 9: Salaries to administration staff, paid in October 2020, was $37.55m.
Transaction 10: $4.5m was received from customers in January 2021 in payment for
goods sold to them in November 2020.
Transaction 11: HNG is fitting a new store. $12m was spent in June 2021 paying for the
construction of the premises, including building, electrical, furniture and
fittings etc. (HNG owns the property).
Transaction 12: HNG paid appliance suppliers $1.5m in February 2021 for purchases
made in December 2020.
Transaction 13: Franchisee retailers in New Zealand made AUD$3,960,185 in sales. The
revenue receivable from them is AUD$79,204 (2%). Assume this
amount has not yet been paid to HNG (still outstanding).
(25 marks)
Appendix:
Academic Integrity Declaration
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Include this as a one-page additional document submitted – signed by each group
member.
As the group members signing this declaration, we each confirm the following:
The work presented was contributed equally (in terms of effort) by each
group member.
The report was written, and the calculations performed, by the group
members alone, without direct Helpance from an outside third party.
The Notre Dame policy on Academic Integrity was read and understood.
The report and presentation deliverables were produced in compliance
with the rules and guidelines of this policy.
The Notre Dame policy on Academic Integrity can be accessed here:
https://www.notredame.edu.au/__data/assets/pdf_file/0012/2037/POLICY Student-Academic-Integrity.pdf
Provide each group members name and have each group member sign the
declaration.
Name: Signature: (real signature i.e., with a pen)
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