FNS60215- Advanced Diploma of Accounting: Interpret and Use of Financial Statistics and Tools
1-Research and briefly describe the role and functions of the following organisations and institutions.
A: Reserve Bank of Australia
Monetary policy is the main responsibility of the Reserve Bank of Australia. Other major functions and roles of the Reserve Bank of Australia are promoting the efficiency and safety of the payment system, maintaining, and keeping the stability of the financial system. Reserve Bank of Australia is also involved in providing banking services to government and issuance of banknotes in Australia (Central Banks Guide, 2019).
B: Australian Taxation Office (ATO)
It is the revenue collection agency of the Australian government. The key function is to shape and manage administrative systems effectively that fund and support services for people in Australia. The key responsibility is that it is an administrator of the main aspects of the superannuation system and goods and services tax (Australian Government, 2019).
C: Australian Bureau of Statistics (ABS)
The key function of ABS is to deliver and provide insights and statistics, objective data trusted and relevant, trusted official statistics on the wider ranges of environmental, population, social and economic matters (Pacific Community, 2019).
D: National Statistical Service (NSS)
The main function of NSS is to improve and optimize important statistical assets for evidence-based research, evaluation, and development of policy. It also increases the statistical capability of users and producers of statistics (Australian Bureau of Statistics, 2015).
E: Australian Securities and Investments Commission (ASIC)
The regulation of credit services, providers of financial services, financial markets, and registered companies is under the function of ASIC. It helps in the promotion of efficient and fair financial markets based on transparency and integrity. It supports informed and confident involvement of financial consumers and investors (Clean Energy Regulator, 2015).
F: Industry association data and information
Industry associations provide different services to members, including training and support, as well as lobbying services on behalf of these members.
2-In a research project of Toyota Australia, you have been asked to get the last 5 years’ car sales of Australian sellers. Explain how you would get access to internal and external sales data, and list the area where you would find relevant information about different car companies.
An annual report is the main source of accessing the Internal and external sales data of Toyota Australia. All the information of sales could be gathered by evaluating the sustainability report of internal and external sales data of Toyota Australia. The information about different car companies could be gathered by visiting related websites of the automotive industry.
3-What is Time Series Analysis? Research and outline key concepts of TSA with appropriate examples.
It is a statistical technique used for dealing with trend analysis and time-series data. The meaning of time series data is that data is in a series of certain particular intervals and periods. In this way, it is defined as an ordered sequence of values of certain variables at particular intervals and periods (Devore & Berk, 20017).
Key concepts are given below:
Trends:
The directional movement of lower or higher values of data over time series is known as the trends. The trend is considered as uptrend when the time series shows a higher pattern, and it is said downtrend when there is a lower pattern (Devore & Berk, 20017).
Seasonality:
if the decrease or increase of values of data is occurring periodically, then these patterns are known as seasonality. The seasonal variances are associated with a specific period of the year, and these are measured over several months (Devore & Berk, 20017).
Stationarity:
When statistical properties of time series do not change over a certain time, then this time series is known as stationary. In a stationary concept, the autocorrelation, variance, and mean are equally distributed over time (Sen, 2019).
Correlation:
This occurs when observations of time series tend to be correlated by closing together in time. Autocorrelation is a way of explaining and measuring the association existed between the observations of time series (Sen, 2019).
4-A member of the local council is presented with statistics concerning how often local residents visit the beach. He presents his findings in the following line graph.
Easy visualization of trends:
Line graph shows trends and data variables that enable the users to visualize trends easily so that they can make predictions easily about those results of data which has not yet recorded. In this way, the line graph is good to show specific values of data, which means that by knowing one variable, the other variable can easily be determined.
The line graph appears cluttered in the case of the wide range of data:
One of the features of line graph that makes the graph difficult to interpret is that when too many bars are plotted on the line graph, then it makes the line graph appear cluttered or in other word it makes it less easy to interpret the data. An accurate understanding of the data on the graph becomes difficult when there is a wide range of data on a line graph (MacFarland, 2013).
5-From the list below choose 3 examples of sampling techniques you could use to collect data for the purpose of conducting analysis. For the 3 examples selected to describe the strengths and weaknesses of each one.
Surveys
- Strengths include surveys provide high representativeness because the large population is involved, it is a low-cost method of gathering information and data, and it is the best source of the gathering of convenient data.
- Weaknesses include the inflexible design of the surveys because it is not possible to change the method of administrating throughout the process of gathering data (Wilcox, 2011).
Descriptive statistics
- Descriptive statistics help in presenting the data in a more meaningful way which enables us to conduct interpretation easily.
- The key weakness is that it involves only the summations of objects or people which have been measured actually so the user could not use the data to be generalized to other objects or people (Wilcox, 2011).
Inferential statistics
- The key strength is that it helps in determining the probability of the characteristics of the population based on sample characteristics, which eventually helps in assessing the relationship between the dependent and independent variables.
- The key weakness of inferential statistics is that the user provides that data of population, which have not yet fully measured, which eventually reduce the correctness of the statistics or values calculated (Devore & Berk, 20017).
6-The objective of financial reporting is to provide useful information to the end-users so they can make and evaluate decisions about the allocation of resources. When collecting survey data, explain the difference between Qualitative and Quantitative data. When undertaking a financial analysis, describe the benefits you could get from using both forms of data?
Benefits of qualitative data
Qualitative is helpful in the determination of intangible impact that could be created by different transactions for business performance. The key benefit of qualitative data is the ability to identify and obtain key descriptive financial data through observation, case studies, cultural immersion, and structured interviews. For example, qualitative financial data of sales help in determining whether certain money spending by the company is creating benefits or not (Wilcox, 2011).
Benefits of quantitative data
Quantitative data is based on numbers which could be measured, such as taxes, profit margins, expenses, and revenues. These numbers could be further quantified for assessing financial performance. For example, expenses of management could be divided into overhead and production costs to understand the cost of producing a product and running the business (Glen, 2013).
7-When working in Financial Services you will be required to familiarize yourself with a range of Accounting Vocabulary. Research and describe the following terms:
Debt ratio:
Percentages of assets of a company that are provided through debt are indicated by this financial ratio of debt ratio. The company is considered as more leveraged when the debt ratio is higher, and so that the company is at a certain level of financial risks and vice versa.
Inventory turnover:
It is defined as a number of times, stock of goods of the company are sold or replaced during a period. It indicates the way the company is managing the costs and effectiveness of sales efforts.
Acid – test ratio:
it is a form of liquidity ratio of the company with the help of which the company’s ability to pay its current liabilities by selling its current or short-term assets. In other words, the acid test ratio is a way of measuring the capability of the company to satisfy its current or short terms of financial liabilities.
Long term solvency:
It is one of the important metrics used for measuring the ability of an organization to sustain operations indefinitely by making a comparison of levels of debt with the earnings, assets, and equity.
Short term liquidity:
It measures the ability of a company to collect sufficient short-term assets to be able to pay short term liabilities (Rajasekaran, 2011).
References
Australian Bureau of Statistics, 2015. National Statistical Service. [Online] Available at: https://www.abs.gov.au/AUSSTATS/abs@.nsf/95553f4ed9b60a374a2568030012e707/2e32a26d155e7d69ca257d85000f30a8!OpenDocument [Accessed 20 August 2019].
Australian Government, 2019. Australian Taxation Office. [Online] Available at: https://www.directory.gov.au/portfolios/treasury/australian-taxation-office [Accessed 20 August 2019].
Central Banks Guide, 2019. Central Banks. [Online] Available at: http://www.centralbanksguide.com/reserve+bank+of+australia/ [Accessed 20 August 2019].
Clean Energy Regulator, 2015. The role of the Australian Securities and Investment Commission. [Online] Available at: http://www.cleanenergyregulator.gov.au/Infohub/Markets/Supporting-market-integrity/The-role-of-the-Australian-Securities-and-Investment-Commission [Accessed 20 August 2019].
Devore, J.L. & Berk, K.N., 20017. Modern Mathematical Statistics with Applications. 2nd ed. Cengage Learning.
Glen, J., 2013. Qualitative vs. Quantitative. [Online] Available at: http://www.businessdictionary.com/article/968/qualitative-vs-quantitative-d1113/ [Accessed 20 August 2019].
MacFarland, T.W., 2013. Introduction to Data Analysis and Graphical Presentation in Biostatistics with R: Statistics in the Large. 2nd ed. Springer Science & Business Media.
Pacific Community, 2019. Australian Bureau of Statistics. [Online] Available at: https://www.spc.int/partners/statistics/the-australian-bureau-of-statistics-abs [Accessed 20 August 2019].
Rajasekaran, V., 2011. Financial Accounting. 1st ed. Pearson Education India.
Sen, B., 2019. An Introduction to Time Series Analysis. [Online] Available at: https://medium.com/swlh/an-introduction-to-time-series-analysis-ef1a9200717a [Accessed 20 August 2019].
Wilcox, R., 2011. Modern Statistics for the Social and Behavioral Sciences: A Practical Introduction. 2nd ed. CRC Press.
