Question: Common-size Balance Sheet
Common-size Balance Sheet of Michael Hill International Ltd for the years 2014 and 2015:
|
Particulars
|
2015 $000
|
% of total
|
2014 $000
|
% of total
|
|
ASSETS
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
6797
|
1.94
|
8109
|
2.39
|
|
Trade and other receivables
|
24859
|
7.08
|
25143
|
7.40
|
|
Inventories
|
182232
|
51.92
|
179280
|
52.76
|
|
Current tax receivables
|
11376
|
3.24
|
61
|
0.02
|
|
Other current assets
|
3143
|
0.90
|
-
|
-
|
|
Total current assets
|
228407
|
65.07
|
212593
|
62.56
|
|
Non-Current assets
|
|
|
|
|
|
Trade and other receivables
|
636
|
0.18
|
480
|
0.14
|
|
Property plant and equipment
|
64845
|
18.47
|
55400
|
16.30
|
|
Deferred tax assets
|
48381
|
13.78
|
62324
|
18.34
|
|
Intangible assets
|
6491
|
1.85
|
6413
|
1.89
|
|
Other non-current assets
|
2253
|
0.64
|
2608
|
0.77
|
|
Total non-current assets
|
122606
|
34.93
|
127225
|
37.44
|
|
|
|
|
|
|
Total assets
|
351013
|
100
|
339818
|
100
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
43739
|
12.46
|
42034
|
12.37
|
|
Provisions
|
4624
|
1.32
|
4235
|
1.25
|
|
Deferred revenue
|
21516
|
6.13
|
24736
|
7.28
|
|
Total current liabilities
|
69879
|
19.91
|
71005
|
20.90
|
|
Non-Current liabilities
|
|
|
|
|
|
Borrowings
|
45116
|
12.85
|
56000
|
16.48
|
|
Provisions
|
4254
|
1.21
|
1740
|
0.51
|
|
Deferred revenue
|
44143
|
12.58
|
29788
|
8.77
|
|
Total non-current liabilities
|
93513
|
26.64
|
87528
|
25.76
|
|
Shareholder's Equity
|
|
|
|
|
|
Contributed equity
|
3760
|
1.07
|
3651
|
1.07
|
|
Reserves
|
7445
|
2.12
|
5796
|
1.71
|
|
Retained earnings
|
176416
|
50.26
|
171838
|
50.57
|
|
Total Shareholder's Equity
|
187621
|
53.45
|
181285
|
53.35
|
|
|
|
|
|
|
Total liabilities
|
351013
|
100
|
339818
|
100
|
Common-size Income Statement of Michael Hill International Ltd for the years 2014 and 2015:
|
Particulars
|
2015 $000
|
% of total
|
2014 $000
|
% of total
|
|
Revenue from operations
|
503370
|
99.55
|
483935
|
99.84
|
|
Other income
|
2295
|
0.45
|
764
|
0.16
|
|
Total revenue
|
505665
|
100
|
484699
|
100
|
|
Cost of goods sold
|
-181135
|
-35.82
|
-173504
|
-35.80
|
|
Employee benefit expenses
|
-130937
|
-25.89
|
127010
|
26.20
|
|
Occupancy cost
|
-50640
|
-10.01
|
-47287
|
-9.76
|
|
Marketing expenses
|
-31906
|
-6.31
|
-26818
|
-5.53
|
|
Selling expenses
|
-22748
|
-4.50
|
-23203
|
-4.79
|
|
Depreciation and amortization expense
|
-15738
|
-3.11
|
-13070
|
-2.70
|
|
Loss on disposal of Property plant and equipment
|
-204
|
-0.04
|
-1133
|
-0.23
|
|
Other expense
|
-30211
|
-5.97
|
-30463
|
-6.28
|
|
Finance cost
|
-4708
|
-0.93
|
-5436
|
-1.12
|
|
Profit before income tax
|
37402
|
7.40
|
36775
|
7.59
|
|
income tax expense
|
-9648
|
-1.91
|
-11734
|
-2.42
|
|
Profit for the year
|
27754
|
5.49
|
25041
|
5.17
|
|
Other comprehensive income
|
|
|
|
|
|
Cash flow hedges
|
-491
|
-0.10
|
-277
|
-0.06
|
|
Currency diff.arising during the year
|
2115
|
0.42
|
4239
|
0.87
|
|
Total comprehensive income for the year
|
29378
|
5.81
|
29003
|
5.98
|
(a) Assume you are a banker evaluating a loan request from Michael Hill International Ltd for $50 million. What would be your concerns when making a decision regarding approval or denial of the loan request? Justify.