Finance and Accounting Calculation: A-Cap Resources Limited - Book Report/Review Example

? Finance and Accounting Calculation report Executive Summary A-Cap Resources Limited The company A-Cap Resources has suffered from huge amount of losses in the 2012, though less as compared to 2011. Though the revenue from sales earned by the company in 2012 was less than 2011 because of the decrease in spot prices of uranium in 2011, yet the company was able to reduce the losses incurred in 2012 as compared to 2011 because of the Letlhakane Uranium Project which grew by 90 million pounds in 2011. The profitability and the liquidity position of the company has deteriorated due to the losses, but the company was able to implement a proper strategy which led to the decrease in total liabilities and the total debt with respect to the total assets and the shareholders fund. This has added to be a positive ground to the company, as inspite of such a strategy the company would become insolvent as the company’s condition in 2012 restricts it to the payment of any due obligation. Considering the financial condition in 2012 and the past year, and the developments gained from the Letlhakane Uranium Project and the discovery of two new coal projects, it is expected that the company with its planned operations and future strategic measures will be able to overcome the shortcomings and bring about positive developments and prospects in the future. A1 Consolidated Gold Limited The company A1 Consolidated Gold was unable to generate sufficient amount of revenue from its operations in the year 2012 inspite of being involved in the underground evaluation of the A1 Gold Mine because there was no change in the operations of the business during this period. Though the company earned a high amount of interest income, yet the decision of the board to pay off the employee stock option schemes to the employees would increase their inspiration and effort with an attempt to decrease the loss incurred by the company in 2012. But inspite of such a situation, the position of assets, liabilities and equity gave a strong stand to the company. The company’s strategy to lower the liabilities in a way to lower the debt puts the company in a better position and secures its position from being insolvent. Inspite of negative returns earned in the year 2012, the increase in the proprietary ratio would give confidence to the shareholders and assure improvement in the financial condition of the business in the long-run which would inspire them to invest. The company has undertaken several strategies to develop and improve but hesitates to declare such measures so to avoid occurrence of unanticipated events. Table of Contents Executive Summary 2 A-Cap Resources Limited 2 A1 Consolidated Gold Limited 2 Table of Contents 4 Introduction 5 A-Cap Resources Limited 5 A1 Consolidated Gold Limited 5 Analysis of Financial Statements 6 A-Cap Resources Limited 6 A1 Consolidated Gold Limited 9 Conclusion 12 A-Cap Resources Limited 12 A1 Consolidated Gold Limited 12 References 14 Appendix 1- Financial Statements of A-Cap Resources Limited 15 Appendix 2- Ratio Analysis of A-Cap Resources Limited 20 Appendix 3 – Financial Statements of A1 Consolidated Gold Limited 22 Appendix 4 – Ratio Analysis of A1 Consolidated Gold Limited 26 Introduction A-Cap Resources Limited A-Cap Resources Limited is one of the companies in the world having the largest uranium deposits. The company faces distinct comparative advantages in terms of infrastructure and process design. The company also enjoys the advantage of being in a location which is one of the best mining invest environments in the world. One of the main reasons for Botswana being one of the ideal international investment destination and the most favourable mining destination in Africa is because of the establishment and continuation of operations of A-Cap Resources Limited in Botswana since 2004. The company has excellent resource assets which have added to its growth and success in both coal and uranium. Such growth and success have further added new dimensions in the activities of the company and has paved the way for significant new opportunities to achieve rapid development. The key objective of the company is to progress rapidly towards production and development, an attempt to secure a position of being a long-term supplier of uranium for the growing nuclear industry, and through the attainment of these objectives the aim of the company will be to gain the substantial latent value of the shareholders. Australian Bureau of Resources and Energy Economics declared based on their research that the demand for uranium in the world is expected to grow by 42% between 2017. So the company expects to grow with this pace with planned estimates, so as to meet the rising demand and avail the growth opportunities underlying the development (A-Cap Resources LTD, 2012, pp.1-6). A1 Consolidated Gold Limited A1 Consolidated Gold Limited (ASX: AYC) is a junior gold exploration company focused on A1 Gold Project’s development in the Woods Point at Walhalla Goldfield located in the north-eastern part of Victoria. The company with the assistance of A1 Gold Mine has also acquired to the north two mineral tenements for further exploration. Presently the company is in an attempt to the development of an underground decline at the A1 Gold Mine to the 1400 Stockwork. The Company completed it’s A$8.1 million initial public offering in June 2012. The securities of the company were listed on the Australian Stock Exchange (ASX) on 21 June 2012. At the end of 2012, the company announced a maiden JORC Mineral Resource of 133,000oz gold at the 1400 Stockwork Zone at the A1 Gold Project. The mineral resource is considered to be an Inferred Mineral Resource and totals to 750,000 tonnes at 5.5 g/t gold for 133,000oz contained gold. This is considered to be a significant achievement by the company since its ASX listing in June 2012. In addition to the Inferred Mineral Resource, the company has also commenced an underground program of diamond drilling since its listing. For the purpose to meet the expectations of the investors the company raised $5,462,500 from the issue of 23,083,334 shares during the financial year 2012. The directors of the company are environment conscious, so all the activities of the companies were carried out in accordance to the Mineral Resources (Sustained Development) Act 1990 (MRSDA) (A1 Consolidated Gold Limited, 2012, pp.6-8). Analysis of Financial Statements A-Cap Resources Limited The financial statements of the company have been prepared in accordance to the Australian Accounting Standards, including Australian Accounting Interpretations, and the Corporations Act 2001. The Income Statement for the year 2012 shows that the revenue earned by the company from its activities has decreased in 2012 by 33.66% as compared to 2011. This is because of the fall of the spot prices of uranium in 2011 from $70-$75 to $50-$55. Though the Letlhakane Uranium Project grew by 90 million pounds in 2011, yet the fall in the spot prices of Uranium resulted in sharp fall of the revenue earned. The expenses incurred for the activities of production in 2012 increased as compared to 2011, which resulted in increase in loss earned by the company inspite of its better performance in 2012 as compared to 2011. The company earned a gain from translation of foreign controlled operation in 2012, which helped in the reduction of net loss earned, but was unable to affect the loss on earning per share availed by the shareholders, since the loss on EPS increased in 2012 as compared to 2011. This depicts that the fall in the spot prices of Uranium had a tremendous adverse affect in the operations of the company. The adverse situation faced by the company is also reflected in the profit margin, but an improvement in the margin of profit as compared to the last year 2011 shows the sign of growth and success, which the company is trying to achieve inspite of several hazards through efficiency in performance. A marked and greater decrease in the position of current assets than current liabilities in 2012 as compared to 2011, have also resulted in decrease of the liquidity ratios, i.e. the liquidity position of the company (A-Cap Resources LTD, 2011, p.34). The decrease in current assets is mainly due to the fall in the balance of cash and cash equivalents in 2012, which have resulted mainly due to the absence of term deposits in 2012. Term deposits have contributed a large portion to the liquidity position of the company in 2011, absence of which has led to a fall in the liquid fund in the year 2012. The decrease in current ratio and quick ratio by 67%, i.e. from 8.29 in 2011 to 2.76 in 2012, resembles that since the company is facing losses and has very low available liquid cash, so it can be said that the company has lost its efficiency to cover the total portion of current liabilities, and also will be unable to meet losses and contingency requirements with the available liquid fund, which depicts inefficiency of resources. The analysis of the profitability ratios depicts the underlying interest of the owners and the shareholders of the company in their investment in the business of a company. The negative results of the profitability analysis of A-Cap Resources Ltd and the decrease of the profitability ratios in 2012 as compared to 2011, depicts that the performance would result in fall in the expectation of the owners and investors, which would adversely affect the availability of funds. Realizing this situation, the company in its future objective will try to implement steps so as to meet the latent demand in the market, and meet the expectation of the investors and owners through efficiency of performance. The analysis of activity ratios depicts the cash elasticity of current assets, i.e. how current assets can be easily converted to cash and sales. In 2012, the company’s position with respect to current assets, cash and sales has undergone a marked fall, and the loss incurred by the company indicates an unfavourable position. A company’s ability to meet its current liability depends upon the rate at which cash flows into the business from its current operation. But in a critical situation through which the company is passing by, where on one hand the ability of the company to pay its current liabilities with the help of its current assets is doubted, the company will definitely face problems in an attempt to convert its current assets into sales and cash, which have thus resulted in the fall in the asset turnover ratio. But the company may undertake strategies so as to bring about development in the future. The activity of the company which have placed it in a positive and strong ground is that the company’s total assets is much higher than its total liabilities, which indicates that realizing the circumstances the company has not undertaken a number of debts which has placed the company in a better position. If the company would liable of several debts, then with the present loss situation and low liquid funds, it would be in an insolvent position. This implemented strategy has resulted in the improvement of the working capital turnover ratio in 2012, as compared to 2011. Debt equity ratio measures the contribution of lenders relative to the contribution of owners, i.e. the proportion of debt the company is exposed to (Mukherjee and Hanif, 2006, pp.19.1-19.8). The debt equity ratio shows a favourable result in 2012 as compared to 2011, i.e. the ratio has decreased from 0.0463 in 2011 to 0.0413 in 2012. This decrease is due to the decrease in total liabilities in 2012 as compared to 2011, which shows that the company’s degree of debt in the total capital structure has decreased, thus the risk to be borne has also decreased. The increase in proprietary ratio in 2012 as compared to 2011 is a positive sign which indicates a large degree of security to the lenders of the company. The statement of changes in equity of A-cap Resources Ltd. for 2012 indicates that the total equity of the company has experienced a marked decrease in 2012 as compared to 2011. This decrease has resulted due to the losses incurred by the company in the period of 2012. The total effect of the losses has been minimized by the incomes generated from other sources and the share-based payments, but the total effect could not be reduced. The statement of cash flows shows that in the year 2012 cash outflows in operating and financing activities was greater than the cash inflows generated from the activities. Apart from this in the year 2012, the company has not generated any cash flow from financing activities, may be because of losses incurred in 2011, which have lead to the fall in the total balance of liquid cash available at the end of the year 2012. A1 Consolidated Gold Limited The Income Statement depicts that the company has not earned revenue from operations in the years 2011 and 2012, because there was no change in the activities of the company in this two years. So the company earns income only from the interest during the last two years, and in 2012, the income was higher than 2011, i.e. $119,712 in 2012 as compared to $8,812 in 2011. Though during the year 2012 the principal activity of the company was underground evaluation of the A1 Gold Mine, yet the company was not able to earn sufficient revenue from the activity, which compelled the management and the board of the company to take the decision of not disclosure of the revenue earned in the financial statements, which in their view would affect the company’s position in the market. The operations undertaken by the company led to a rise in the incurred expenses, but the company would have undergone a profit in 2012 if it had not to incur the expense of share based payment of $1,858,691. The company issued 20,000,000 unlisted options over ordinary shares on 23 November 2011. These options were exercisable at 40cents on or before 31 December 2014, and based on certain assumptions the options were valued at $1,858,691 using the Black & Scholes option pricing model. The Board decided to exercise this option by adopting it as an employee share option plan with a belief that this payment would provide the employees with an opportunity to participate in the success of the company and encourage the employees to give their effort for growing the wealth of the company which in turn will benefit the shareholders. As the revenue earned from operations was very meagre, so the company had to bear no income tax expenses. As a result of the losses incurred by the company the earning per share available to the shareholders was negative. Thus the company declared no dividend for the year 2012. The increase in losses of the company in 2012 as compared to 2011, i.e. from $(58,697) in 2011 to $(1,936,816) in 2012, is also showed in the profit margin, which has showed a significant decrease in the year 2012, i.e. from (6.66) in 2011 to (16.18) in 2012. The balance sheet shows that the value of current assets and total assets have increased by a much higher rate than current liabilities and total liabilities in 2012 as compared to 2011. Though the liquid cash available in hand has decreased in 2012, yet the significant rise in current assets can be mainly apportioned to the rise of short-term deposits during this period. The analysis of the liquidity ratios would help to ascertain the ability of the company to meet its short-term obligations. The position of current ratio and quick ratio shows marked improvement which depicts the ability of the company to pay off its current obligations inspite of its losses. The significant increase in current ratio and quick ratio would minimize the effect of decrease of net working capital (Drake, P.P., n.d, p.6). Inspite of a significant increase in the value of total assets and equity the profitability ratios give negative picture due to the loss incurred by the company during 2012. Negative results demonstrate that since the company was unable to earn any profit in the year 2012, so the investors, owners and shareholders of the company did not receive any return from their investment during this period. It also resembles that the company was unable to earn sufficient success from its operations in the year 2012. Though the balance sheet shows rise in the total assets of the company and the presence of sufficient amount of liquid funds in hand, yet on the analysis of activity ratios it is found that that the assets of the company have not been efficiently employed, because the total assets turnover ratio has decreased (Narotama, n.d., p.3). Whereas an increase in the working capital turnover ratio indicates an efficient use of working capital in the operations by the company’s management so as to generate revenue. The favourable results obtained on the analysis of the capital structure ratios, i.e. the solvency ratios, indicate that the business is exposed to lower risks of insolvency inspite of its losses and insufficient revenue generation. The strategy adopted by the company to reduce its liabilities, i.e. the debt, have proved to be beneficial, as it resulted in decrease of debt-equity ratio, which would otherwise affect the solvency state of the company. The increase in the interest coverage ratio indicates long-term solvency and the ability of the company to meet its debt that may arise in future. The rise in the proprietary ratio indicates the security and financial stability guaranteed by the company, which would instil confidence among the shareholders and inspire them to invest in the company inspite of its negative returns. The statement of equity shows a significant increase in the position of equity during the year. This is because the company decided to issue shares of costs of $28,993,536 during the year. Thus as a result of such issue, inspite of losses incurred the company was able to generate funds required for the purpose of operations and other activities. The statement of cash flows also shows that though cash outflow involved in the activities of operations an investment were higher than cash inflow, yet the inflow generated from issue of shares in the financial activities was able to reduce the effect of negative cash balance and ascertain a sufficient amount of positive cash in the hands of the company that would be required in its operations. This has also resulted in higher cash balance in the year 2012 as compared to 2011. Conclusion A-Cap Resources Limited Though the company, A-Cap Resources limited has undergone a loss in the year 2012 and has faced several financial shortcomings, yet the Chief Executive officer of the company Mr. Paul Thomson says that the overall year of 2012 has proved to be very positive to the company because of the expansion of the Letlhakane uranium resource along with the discovery of two new coal projects which has added a new dimension to the company’s activities. The Chief Executive Officer expects that based on these developments, and with the help of company’s experienced management and operational and feasible teams, the company will be able to recover from the losses, drawbacks and the shortcomings in the future with efficient performance and success which would draw large number of shareholders and investors. Thus, on the basis of the view presented by the Chief Executive Officer it can be recommended that the company must move forward by abiding the policies formulated for improvement to achieve success. A1 Consolidated Gold Limited From the financial statements of the company it can be concluded that, though the company holds insufficient revenue from operations in the year 2012 and has also incurred high amount of loss, yet from the analysis of different ratios and statements it can be said that the company is still in a favourable position, from where if it attempts to improvement, it can achieve prospects. The directors of the company specify that the company attempts to obtain growth prospects in the future with certain forward looking statements which would be to bring about efficiency in exploration & development operations, economic conditions and financial performance. Though the results of the company give an adverse view, yet it is expected that the company by implementing changes, with the help of forward looking statements, strategic measures, and business and operating initiatives will be able to attain prospects in the future, and will also be able to meet the expectation of the investors, owners and shareholders. The objectives of the company in the company in the future would be success in strategic initiatives, involvement in new exploration with proper care to the environment, reduction of risks and hazards inherent in the mining business, a positive approach to the changes in government policies and regulatory actions, analysis and removal of discrepancies between actual and estimated production, and undertaking necessary control measures so that the company is able adjust and bear the effect of fluctuations of gold prices and exchange rates on business. References Mukherjee, A. and Hanif, M., 2006. Corporate Accounting. India: Tata McGraw-Hill. A-Cap Resources LTD, 2012. 2012 Annual Report. [Online]. Available at: < http://acap.com.au/wp-content/uploads/2012/09/A-Cap_2012_Annual_Report_Final1.pdf>. [Accessed on: 24 September, 2013]. A-Cap Resources LTD, 2011. 2011 Annual Report. [Online]. Available at: . [Accessed on: 24 September, 2013]. A1 Consolidated Gold Limited, 2012. Annual Report 30 June 2012. [Online]. Available at: < http://www.a1consolidated.com.au/images/uploads/Annual_Operations_and_Financial_Report.pdf>. [Accessed on: 25 September, 2013]. Drake, P.P., n.d. Financial ratio analysis. [Pdf]. Available at: . [Accessed on: 25 September, 2013]. Narotama, n.d. Ratio Analysis. [Pdf]. Available at: < http://ebooks.narotama.ac.id/files/Accounting%20for%20Managers/Chapter%209%20%20%20Ratio%20Analysis.pdf>. [Accessed on: 24 September, 2013]. Appendix 1- Financial Statements of A-Cap Resources Limited Consolidated Statement of Comprehensive Income For the year ended 30 June 2012   Amounts in $   2012 2011 Revenue from ordinary activities 407,455 614,227 Other income 11,853 20,537 Communication costs (122,338) (97,564) Corporate expenses (66,032) (94,149) Depreciation (63,844) (34,091) Employment costs (1,380,943) (1,354,545) Impairment Expense (116,971) (40,651) Insurance expense (71,611) (55,705) IT costs (42,978) (62,558) Office costs (245,914) (188,803) Professional Fees (465,116) (272,254) Promotional costs (174,595) (169,869) Share based payments (840,756) (1,386,098) Travel expenses (483,919) (485,272) Other expenses (340,433) (131,554) Loss from ordinary activities before income tax expense (3,996,142) (3,738,349) Withholding tax expense 0 (460,830) Loss from ordinary activities after income tax expense attributable to the parent (3,996,142) (4,199,179) Other comprehensive loss-     Gains/(Losses) arising from translation of foreign controlled operation 609,412 (2,075,468) Total comprehensive loss attributable to owners of the parent entity (3,386,730) (6,274,647) Basic loss per share (cents per share) (2.00) (2.30) Diluted loss per Share (cents per share) 2.00 2.30       Consolidated Statement of Financial Position For the year ended 30 June 2012   Amounts in $   2012 2011 ASSETS     Current Assets-     Cash and cash Equivalents 3,157,814 12,154,296 Trade and other receivables 302,593 564,640 Total current assets 3,460,407 12,718,936       Non-current assets-     Plant and Equipment 759,192 678,769 Capitalized exploration and evaluation 27,754,703 21,244,047 Total non-current assets 28,513,895 21,922,816 TOTAL ASSETS 31,974,302 34,641,752       LIABILITIES     Current Liabilities-     Trade and other payables 1,269,558 1,534,445 Total current liabilities 1,269,558 1,534,445 TOTAL LIABILITIES 1,269,558 1,534,445 NET ASSETS 30,704,744 33,107,307       EQUITY     Equity attributable to equity holders of the parent-     Contributed Equity 47,292,877 46,308,710 Reserves (2,510,649) (3,120,061) Accumulated losses (14,077,484) (10,081,342) Parent interests 30,704,744 33,107,307 TOTAL EQUITY 30,704,744 33,107,307       Consolidated Statement of Changes In Equity For the Year Ended 30 June 2012   Amounts in $   Ordinary Shares Options Reserve Accumulated Losses Foreign currency translation Reserve Total At 1 July 2011 44,531,868 1,776,842 (10,081,342) (3,120,061) 33,107,307 Loss for the period 0 0 (3,996,142) 0 (3,996,142) Other comprehensive income 0 0 0 609,412 609,412 Total comprehensive income/(loss) for the year 0 0 (3,996,142) 609,412 (3,386,730)             Transactions with owners in their capacity as owners:           Options granted-share based payments 0 984,167 0 0 984,167 At 30 June 2012 44,531,868 2,761,009 (14,077,484) (2,510,649) 30,704,744               Amounts in $   Ordinary Shares Options Reserve Accumulated Losses Foreign currency translation Reserve Total At 1 July 2010 28,910,898 3,908,793 (9,657,562) (1,044,593) 22,117,536 Reversal of previously recognized option expense 0 (3,775,399) 3,775,399 0 0 Loss for the period 0 0 (4,199,179) 0 (4,199,179) Other Comprehensive loss 0 0 0 (2,075,468) (2,075,468) Total comprehensive loss for the year 0 (3,775,399) (423,780) (2,075,468) (6,274,647)             Transactions with owners in their capacity as owners:           Issued capital 16,228,304 0 0 0 16,228,304 Options granted-share based payments 0 1,643,448 0 0 1,643,448 Share issue costs, net of tax (607,334) 0 0 0 (607,334) At 30 June 2011 44,531,868 1,776,842 (10,081,342) (3,120,061) 33,107,307             Consolidated Statements Of Cash Flows For the Year Ended 30 June 2012   Amounts in $   2012 2011 Cash Flows from Operating Activities-     Payments to suppliers and Employees (inclusive of goods and services tax) (3,739,222) (2,771,135) Interest received 554,514 467,168 Net Cash (Outflow) from Operating Activities (3,184,708) (2,303,967)       Cash Flows from Investing Activities-     Exploration Expenditure (5,510,296) (6,757,792) Purchase of Property, plant and equipment (309,994) (456,882) Proceeds from sale of property, plant and equipment 8,516 0 Net cash (Outflow) from Investing Activities (5,811,774) (7,214,674)       Cash Flows from Financing Activities-     Proceeds from issues of ordinary shares & options 0 15,721,161 Payments of Share issue costs 0 (607,334) Net Cash (Inflow) from Financing Activities 0 15,113,827       Net Increase/(Decrease) in Cash and Cash Equivalents Held (8,996,482) 5,595,186 Cash and cash equivalents at the Beginning of the Financial Year 12,154,296 6,559,110 Cash and cash equivalents at the End of the Financial Year 3,157,814 12,154,296       Appendix 2- Ratio Analysis of A-Cap Resources Limited Ratio Analysis of A-Cap Resources Limited   2012 2011 Liquidity Analysis Ratios-     1. Current Ratio= Current Assets /Current Liabilities 2.73 8.29 2. Quick Ratio= Current Assets-Inventory/Current Liabilities - Bank overdraft 2.73 8.29 3. Net Working Capital Ratio= Net Working Capital/Total Assets 0.07 0.32       Profitability Analysis Ratios-     1. Return on Assets (ROA) = Net Income/Average Total Assets (0.10) (0.22) where, average total assets= (Beginning total assets + Ending Total Assets)/2     2. Return on Equity (ROE) = Net Income/Average Common Stockholders' (0.11) (0.23) Where, average stockholder's equity= (Beginning Stockholders' Equity + Ending Stockholders' Equity)/2     3. Profit margin= Net Income/ Sales (8.31) (10.22) 4. Earnings per share (EPS) = Net Income/ Number of common shares outstanding (2.00) (2.30)       Activity Analysis Ratios-     1. Assets Turnover Ratio = Sales/Average Total Assets 0.01 0.02 Where, Average Total Assets = (Beginning Total Assets + Ending Total Assets)/2     2. Working Capital Turnover Ratio= Net Sales or Turnover/Working Capital 0.19 0.05       Capital Structure Analysis Ratios or Solvency Ratios-     1. Debt to Equity ratio= Total Liabilities/Total Stockholders' Equity 0.04 0.05 2. Proprietary Ratio= Shareholders Fund/Total Assets 0.96 0.96       Appendix 3 – Financial Statements of A1 Consolidated Gold Limited Statement of Comprehensive Income For the Year Ended 30 June 2012   Amount in $   Year to 30 June 2012 14Feb 2011 to 30 June 2011 Interest Income 119,712 8,812 Accounting and taxation services (32,900) (2,550) Auditor's remuneration (23,600) (15,000) Company secretary fees (37,490) (22,395) Consulting fees (20,788) 0 Depreciation Expense (13,215) (1,197) Finance costs (4,270) (1,001) Insurance (38,262) (10,116) Legal Fees (4,887) (12,954) Computer and Internet expenses (11,793) (1,604) Mining tenement expenses (9,065) 0 Other expenses (1,567) (692) Share based payment expense (1,858,691) 0 Loss before Income tax expense (1,936,816) (58,697) Income tax expense 0 0 Loss for the year (1,936,816) (58,697) Other comprehensive income 0 0 Total comprehensive loss for the year (1,936,816) (58,697)       Basic and diluted loss per share (cents per share) (0.0371) (0.0027)       Statement of Financial Position As at 30 June 2012   Amount in $   2012 2011 Assets     Current Assets-     Cash and cash equivalents 8,201,107 913,540 Trade and other receivables 406,199 134,821 Other 53,571 91,269 Total Current Assets 8,660,877 1,139,630       Non-Current Assets-     Plant and Equipment 2,324,579 56,322 Exploration and evaluation Assets 21,734,864 1,112,390 Other 159,000 0 Total Non-current Assets 24,218,443 1,168,712 Total Assets 32,879,320 2,308,342       Liabilities     Current Liabilities     Trade and other payables 2,042,583 397,880 Borrowings 40,875 30,011 Total Current Liabilities 2,083,458 427,891 Total Liabilities 2,083,458 427,891 Net Assets 30,795,862 1,880,451       Equity     Issued Capital 30,932,684 1,939,148 Reserves 1,858,691 0 Accumulated Losses (1,995,513) (58,697) Total Equity 30,795,862 1,880,451       Statement of Changes in Equity For the year ended 30 June 2012   Amount in $   Issued Capital Accumulated Losses Share Based Payments Reserve Total Equity Balance as at 1 July 2011 1,939,148 (58,697) 0 1,880,451 Total comprehensive loss for the year 0 (1,936,816) 0 (1,936,816) Shares issued during the year net of costs 28,993,536 0 0 28,993,536 Share-based payment expense 0 0 1,858,691 1,858,691 Balance at 30 June 2012 30,932,684 (1,995,513) 1,858,691 30,795,862           Balance as at 14 February 2011 0 0 0 0 Total comprehensive loss for the period 0 (58,697) 0 (58,697) Shares issued during the period 1,939,148 0 0 1,939,148 Balance at 30 June 2011 1,939,148 (58,697) 0 1,880,451           Statement of Cash Flows For the Year ended 30 June 2012   Amount in $   Year to 30 June 2012 14 Feb 2011 to 30 June 2011   Inflows (Outflows) Cash flows from operating activities-     Payments to suppliers and employees (364,047) (156,224) Interest Received 116,042 4,716 Finance costs (3,681) (875) Net cash (used in) operating activities (251,686) (152,383)       Cash Flows from investing activities-     Purchase from non-current assets (354,549) (57,519) Exploration and evaluation expenditure (4,214,736) (788,368) Loan to related party for environmental bond (109,000) 0 Payment of bond (50,000) 0 Net cash (used in) investing activities (4,728,285) (845,887)       Cash flows from financing activities-     Proceeds from issue of shares 13,555,228 1,939,148 Payments for share issue and listing costs (1,303,096) (57,349) Proceeds from borrowings 54,560 40,075 Repayments of borrowings (39,154) (10,064) Net cash provided by financing activities 12,267,538 1,911,810       Net increase in cash and cash equivalents 7,287,567 913,540 Cash and cash equivalents at the beginning of year 913,540 0 Cash and cash equivalents at the end of year 8,201,107 913,540       Appendix 4 – Ratio Analysis of A1 Consolidated Gold Limited Ratio Analysis of A1 Consolidated Gold Limited   2012 2011 Liquidity Analysis Ratios-   1. Current Ratio= Current Assets /Current Liabilities 4.16 2.66 2. Quick Ratio= Current Assets-Inventory/Current Liabilities - Bank overdraft 4.16 2.66 3. Net Working Capital Ratio= Net Working Capital/Total Assets 0.20 0.31       Profitability Analysis Ratios-   1. Return on Assets (ROA) = Net Income/Average Total Assets (0.11)   where, average total assets= (Beginning total assets + Ending Total Assets)/2     2. Return on Equity (ROE) = Net Income/Average Common Stockholders' (0.12)   Where, average stockholder's equity= (Beginning Stockholders' Equity + Ending Stockholders' Equity)/2     3. Profit margin= Net Income/ Sales (16.18) (6.66) 4. Earnings per share (EPS) = Net Income/ Number of common shares outstanding (0.04) (0.00)       Activity Analysis Ratios-   1. Total Assets Turnover ratio= Sales or Turnover/Total Assets 0.0036 0.0038 2. Working Capital Turnover Ratio= Turnover or net sales/ Working Capital 0.02 0.01       Capital Structure Analysis Ratios or Solvency Ratios-   1. Debt to Equity ratio= Total Liabilities/Total Stockholders' Equity 0.07 0.23 2. Interest Coverage ratio= Income before Interest and Income Tax/ Interest Expense 526.17 67.08 3. Proprietary Ratio= Shareholders Fund/Total Assets 0.94 0.81       Read More