Accounting Concepts and Practices



Table Of Content

Introduction1

Discussion1

Overview of the Company1

Core Business & Operating Activities2

Significant issues emerging from chairman's and Managing Director's Report4

Corporate Social Responsibility and Corporate Governance5

Key Financial Ratios for 20117

Liquidity Ratios7

Solvency Ratios8

Working Capital Management Ratios9

Profitability Ratios10

Company Analysis and Recommendations11

Reference13

Table Of Figures

Liquidity Ratios Graph8

Solvency Ratios Graphs9

Working Capital Management Ratios Graph10

Profitability Ratios Graph10

Accounting Concepts And Practices

Introduction

Earning money is the ultimately objective of the investment or in order words, the initial requirement of development of the investment portfolio. Good facilitators ensure that the investors experience various opportunities to increase the value of their portfolio. The success of the entire portfolio of depends on the advice and recommendation that Accountants & Investment Advisors give to their client.

In this paper, we as MJR Group Accountants & Investment Advisors will advice Uno Super Funds Management whether it is beneficial to invest in Arrium Ltd or not which will analysed upon the difficult factors and elements.

Discussion

Overview of the Company

Arrium is Australian joint-stock company engaged in the extraction and processing of ore iron, especially the production of steel and related products. It is listed on the Australian Securities Exchange, which is part of the largest companies in the index, the S & P / ASX 50. The company was founded in 2000, as a result of the restructuring of the mining giant BHP (in preparation for the merger with the British company Billiton, thus creating company BHP Billiton) were excluded from the departments of mining iron and steel industry (OneSteel Limited Annual Report 2011, 2011).

Core Business & Operating Activities

The substantial presence of OneSteel in Australia is as an incorporated steel manufacturer and finished steel products. It is a premier steel manufacturer of long steel products and has a distribution network of a wide series of steel products which also comprises of rolled structural sections, rail, rod, bar, wire and structural pipe and RHS products, and distributes sheet and coil, plate and aluminium products (OneSteel Limited, 2011).

The core businesses of OneSteel are:

Distribution of steel and related products

Manufacturing of steel profits such as long and structural pipe

Recycling material

As far as Arrium Ltd is concern, it has three main core businesses which are Mining, Mining Consumables, and Steel & Recycling. They are the main producer of iron ore and recently they are experiencing export sales expansion as of roughly 6mtpa to 11mtpa. They hold top position in Australian steel through the integration of OneSteel business. Furthermore, they are the major exporter of the hematite iron ore which is operated in South of Australia. They are of two of type which is the Middleback Ranges and Southern Iron and Ardrossan in South Australia which is of high quality dolomite iron (OneSteel Limited Annual Report 2011, 2011).

After two years of extraordinary growth in 2010 and 2011, the revenue generated by the Arrium Ltd is expected to contract 5.9% in 2012 (Tse, 2010). The Arrium Ltd is expected to generate $248.2 billion in revenue in 2012, compared to $86.5 billion in 2007. Strong growth in large emerging nations, such ...