Assignment 1



Assignment 1ACCT11059: Accounting, Learning & Online CommunicationTaylor BurgessS0292208Step 2: MOODLE PROFILE AND PERSONAL BLOGMoodle profile: Link: on Martin Tuners Blog: comments on other blogs: Chris Peters 7/11/17 Trott 7/11/17 Reck 12/11/17 Emily McKay 14/11/17 3: MY COMPANY – GROUP RENAULTMy Company: IMPRESSIONSAfter reading that I had been assigned Renault as my company, all I wanted was to be given the opportunity to swap with someone. I am not a massive ‘car’ person and this was a huge international company whose financial statements I dreaded to look at. After reading their annual report, I was shocked to see how much money goes both in and out of the company and I must admit finding the correct resources was a struggle. The financial statements were not in the annual report rather in a document of their own titled Consolidated Financial Statements. There were pages and pages of reports and I was required to ask for assistance from another student who I had made contact with via Facebook. With previous work history in finance, she was able to provide advice and pointed me in the right direction as to which statements I was looking at in order to complete assignment one. I was pleasantly surprised when I was told there were only four statements that made up the financial statements however all these numbers and terms I had never heard of still hung over my head. The financial statements are extremely confusing (to me anyway) and I think this may come down to the fact of my lack of experience in the share market and how major companies utilise this. Different terms such as parent-company and subsidiaries were all new to me and this took quite some time to figure out.RENAULT OVERVIEW:Existing in 127 countries, Group Renault is an international vehicle manufacturer who designs and manufacturer’s vehicles adapted to specific needs of different regions. Founded in 1898, the company now has 36?production sites and 12,700?dealerships worldwide. The company is growing steadily with shares available to purchase on the stock exchange.With 10 cars being released in 2016 alone, Renault is ahead of schedule with its “Drive the Change” strategic plan to increase revenue (currently €51.2 Million) and achieving a higher profit through a greater diversity of vehicles targeted at geographical locations. Growth is now more global and with the injection of new resources such as plants in Morocco, Algeria and China, one of the company’s goals is to promote and sustain strong performance in the future.Mr Carlos Ghosn is the current Chairman and Chief Executive Officer of Renault and employs a workforce of almost 125,000 people worldwide. The company continue to reduce costs in production and with the significant impact that of a lot of the new models of vehicles made, the raise in the price tag meant the company’s finances show them heading in a positive direction. The share price for Group Renault has dramatically increased over the last four years with basic earnings per share rising from €2.15 in 2013, to €12.46 in 2016. Both Renault’s assets and equity numbers have been climbing and whilst liabilities have also risen, most of this is accounted for in sales financing debts. Net Income is more than five times its amount in 2013 and Renault plans on continuing this growth amongst its sectors.From analysing the financial statements, it is evident that Europe is well and truly in front in terms of generating revenue for the company with an 11.8% increase in sales. America remains Renault’s lowest revenue generator and has remained relatively constant for the four years. A surprising figure that I read in the Annual Statement was that 19% of Renault’s Employee forces are females which is really encouraging to read as a statistic. Renault offer numerous post-graduate training and internships and in the last 15 years, 950 students have been assisted. From the annual report, it appears that they are very passionate in empowering its employees from a very early stage. One of the interns quoted in the report that although she was an intern, she was directly involved in the projects and asked to participate in meetings. This scheme falls under its training model of ‘Drive your learning’, focusing on changing state of minds, and extending their training from developing content to marketing the product and involving areas from all of the company’s populations.KEY CONCEPTS AND QUESTIONSThrough reading Renaults 2016 annual report, and financial statements I am still left with numerous questions. After watching the lectures, I remain uncertain about the revenue and total revenue. In my income statements, I am provided a revenue figure however not a total revenue and my financial income is a negative. Does my revenue figure from the statement actually mean total revenue? I am also unsure about restated balances within my statements of movements in equity. We have been informed that the closing amount from the previous year should be the opening amount for the next however what happens when I am provided a restated balance? I have had to add figures to account for this in my spreadsheet as I didn’t know any other way to represent the figures accurately. Another concern I have is that my consolidated comprehensive income statement is not very similar to that of Wesfarmers Ltd. Underneath my total comprehensive income is a breakdown of the parent-company shareholders’ share and non-controlling interests’ share. I am struggling to still distinguish amongst all the notes which subsidiaries are 100% owned by Group Renault and which ones are non-controlling interests.With such a big market amongst so many different companies, the idea of constantly converting cash with exchange rates rattles me. This must impact the company when there are lows in the economy? The cost of raw materials that is utilised in manufacturing vehicles must differ significantly when the exchange rate is at different levels. I am unaware of where this is displayed in financial statements.Group Renault displays a high level of enthusiasm and passion towards creating and building automotive services so I thought that over the previous four years, research and development costs would have dramatically increase. I was wrong. Whilst they have slightly increased, the numbers only display an increase of $512,000. This seemed extremely low to me and makes me wonder just how much research is actually being conducted versus what they wish to portray to their audience via means such as the annual report.With regards to the automotive industry I have a series of concerns that I believe companies would need to address. What would happen if there was a recall in a specific part due to a design flaw?Should the price of fuel increase substantially, would less people want to purchase new vehicles and opt for public transport?At what stage will the automotive industry reach a climax in reported annual sales and we begin to see a fall is purchases due to populated locations?If vehicles are becoming safer, more reliable and lasting longer, will the requirement to purchase vehicles so frequently drop?CHALLENGES, STATEGIES AND OUTCOMESWith technology changing so quickly, Renault must remain up to date and address the technological challenges of the future and maintain a strategy of profitable growth. Renault plans on continuing to grow its international presence with its five complementary brands (Renault, Dacia, Renault Samsung Motors, Alpine and LADA). Keeping ahead of the times, Renault plans on paving the way for the future using electric, connected and autonomous resources. The ability to produce a range of vehicles that stand out is a difficult task. Standing apart in concept and design is a factor Renault aim to maintain. An example they provided in their 2016 annual report was, “It would be risky for us to merely follow trends. For example, the Chinese market today is dominated by SUVs. Does that mean we should replace this vehicle generation with the same thing? I’m not so sure. SUVs are the latest thing but what will the next thing be? One of the keys to success is becoming more international, learning how to read the needs of our markets, observing so as to improve our concepts”. Another challenge international automotive companies may experience is the potential for currency devaluation. To offset this, Renault were required to increase the price of newer models in emerging countries to ensure they were not at a loss or decreasing in value from the previous years. This proved effective.I posted the following two videos of my Company to my Blog: two videos were sourced from: and DISCUSSIONS AND FEEDBACKUtilising Moodle forums, personal blogs and social media variations, having the ability to compare and discuss financial statements and information regarding our companies has been of great benefit. I appear to still have the only company that did not have its financial statements in the annual report and from the reading the chapters of the study guides, I take it that this is quite unusual. It has raised a few discussions with others and they have informed me they even went to Renault’s annual report in search of them; to be faced with the same outcome as myself. I have posted on Moodle and had discussions with other students regarding blog posts and the assignments: 3 BLOGS I have chosen three of my favourite blogs based on their blog layout and ease of navigation and also the content in which these students post. Some have humour, some have creative diagrams and photographs about their companies that draws me in and makes me want to read all their posts. Below are the people I chose and the comment I have wrote on their blog and in the forum indicating they were one of my favouritesAlexandra Boase reason I chose Alexandra was that she managed to capture my attention as soon as I visited her blog. Not only was the blog well presented, but the information was labelled well and contained really interesting information about her company, Premier Foods. I particularly liked her Premier Foods history post with a large picture of every major accomplishment her company had made. Alexandra also uploaded links to numerous policies and included some great information regarding future strategic plans of her business. The articles were written in first person which I thought was a great way to present the information and made it more personal. It was clear she had done her research about Premier Foods!Comment on Alexandra’s Blog indicating it was a favourite: on Alexandra Boase post in Blog Links Forum: O’Day: O’Day has a very personalised online blog and from reading it you can instantly tell she is very family orientated with a fantastic sense of humour. Amanda has William Hill as her company and has presented some fantastic posts about it. She also included a little comic style picture (see below) which lightened the reading up. Amanda’s blog is easy to read and understand and as a third-year student it is encouraging to read she is still so passionate about learning. Amanda reached out to me via email and indicated she too was based in Cairns and said she would happily do a study session or catch up for a coffee! As a first-year student, this was a great offer and she is the first person to offer anything like that. I hope to catch up with her in the near future. The only negative thing about Amanda’s Blog is she is yet to add an “About Me” page, however has provided links to contact her via social media means. She has also created a post about effective ways to ensure assignments are handed in on time and a means to keep on track of an overwhelming workload. This was a great post and I have created a similar style calendar to keep on track with my study load.Above: Comic from Amanda O’Day’s Blog. Comment on Amanda’s blog indicating it was a favourite: on Amanda’s post in Blog Links Forum: Plautz: Plautz had the same initial reactions when she was given her company. We both wished it had of been an Australian company however it is great to see that she has embraced China Mobile with such enthusiasm. Isabella uploaded a draft of her assignment one step one into a forum on Moodle however when I attempted to read her file, I was experiencing some complications opening the link. I then replied to her post in Moodle and through discussion with Isabella, she has provided advice on how to achieve access. Isabella is only 19 years old however her writing style portrays confidence and it was great to read her responses to Chapter One of the study guide. Her blog is easy to follow and the language she uses is easy to understand. Her willingness to help me access her draft by providing IT support along with her flowing blog is the reason I chose ment on Isabella’s blog indicating it was a favourite: on Isabella’s post in Blog Link Forum: 4: COMPANY SPREADHEETCompany Spreadsheet has been uploaded to Blog independently Step 5: CHAPTER 2 & 3 .1-3.2 REFLECTIONAfter reading and highlighting every second line in Chapter 2 and 3, the study guide has left me feeling overall more confident, but only slightly.Chapter 2 was filled with a lot of acronyms, dates and data an I felt as though it was an overload of information. Unless I can read the name of the standards, (Securities Act 1933), apply (more American firms forced to supply financial data) and then understand how it would affect us now and in the future, I struggle to retain it. A table or spreadsheet of organisations (with dates) and brief description and perhaps even web link, I believe would have been more beneficial and that table can be called upon in the future instead of trying to remember which chapter the information was in. With firms and financial statements having no specific rules about how their statements should be presented, I have found it hard to compare some of the other students’ numbers with my company. From the heading of the statement itself, to the sub-headings and the order in which they are present, why is there no regulation on this for the ease of comparison? I feel sorry for accountants who have to go over lots of these statements and who have to ensure they have it set out in order to meet the requirements of the company and to keep consistency with the previous year’s statements. How about developing a set template? One that if a company does not require specific lines, they can be hidden from the spreadsheet. Working in IT, there are so many different computer systems that I am required to learn. This often leads to confusion and can lead to mistakes being made. Recently I have been informed that our company made up of 18 different local area networks will be replaced with just one system. This comes as a breath of fresh air to those who have to administer it allowing focused attention. I think that if accounting standards were to have a set template, this would also allow greater understanding and ease of completing and comparing. The section ‘Not just one company’ in Chapter 3 I recall reading approximately 10 times over. I got lost in these sections within my financial statements however after completing some Peer Wise questions one afternoon, a question was asked about this and explained it in such a manner than I ‘just got it’.Noting that a firm is changing each and every day, I wonder if these daily/weekly/monthly updates get kept somewhere. IE: If the rate of exchange is above average today and it displays a $20,000k Australian Dollar equivalent, and tomorrow the exchange rate drops and displays a $17,000, is this recorded? What happens when the exchange rate is high or low on the day that the financial statements are based on? Is this really an accurate representation of what the company is worth?Comparing financial statements has opened my eyes to just how successful some companies are. I couldn’t believe the figures I was looking at when I saw over a hundred million in some areas (maybe I need to change my career)!I was extremely surprised about the paragraph about cash in Chapter 3, and what happens when we run out. It mentions that if we do not run out of cash, no matter how big the losses we may make in our business we will not go broke and can keep on trading. I do not understand how this can be correct. If I do not have any cash but I have remaining assets, I can sell the product to make money. If I do not have any cash and have no assets however, I can’t do much! Are people considered assets? For job positions in areas such as manual labour? Or is the job position itself the asset not the person in it?I am unsure as to how an Automotive company would use (if any) accrual accounting noting that when a car is purchased, cash is usually exchanged hands on that particular day. Car financing may fall into this basket; however that is a subject I am uncertain about. I did particularly enjoy reading about the Key qualities in Chapter 2 whereby it gave specific examples that aided in understanding the content. Using the example of Chris and Sarah meeting at a party, Martin made the finance information relatable and consequently comprehendible. The key qualities were described in a manner whereby it was easy to read and easy to apply. The key quality consistency (having the ability to compare) is relatable to a lot of what I do on a day to day basis. Statements that I write up are compared on a month to month basis and if I change templates, headings, subheadings or decide to include different pieces of data merged in with others, it can make it near impossible to utilise for the end reader. In conclusion, the text definitely provided me a greater understanding of financial statements and processes involved in accounting. The generally easy to read content with relatable examples significantly aided in learning this content at a deeper level, I look forward to next weeks!Step 6: FEEDBACK FOR DRAFT ASS1Yet to be completed. ................
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