KCQs on Annual report of Abano Healthcare

I did a lot of reading understanding the annual reports of Abano Healthcare and honestly I had to read it several times before it made any sense to me. First of all, as I read the history of the company, I got to know that when Abano Healthcare was formed in 1999, it focused on the development of retirement village properties and aged care services but in 2000, the company repositioned its strategy and moved away from property development and stepped into the field of medical and healthcare service. How could a company possibly do so? How can it move from completely different business in one year? Well as I did the research, I got to know that this is not an uncommon practice and businesses can reposition their strategies and move into different lines. The next key question that I sought answer to was what is Abano Healthcare about and what it offers to its customers. I got to know by studying the financial statements that Abano operates successful businesses in four sectors of the healthcare market. The company co-invests with clinical leaders and founders in businesses which have growth and profit enhancement opportunities and the four sectors of the business comprise of Abano Audiology, Abano dental, Abano Diagnostics and Abano Rehabilitation. The operations of the business are quite different from what other students have got and I got to know about the unique aspects of my company as I read the bogs of others.

As I read the financial statements again and again, I got confused about which figures I should be using as I saw the figures for the company and the group. Well, I got the answer of this question by reading the blogs and posts of others. Another question that confused me was whether I should use the income statement or statement of comprehensive income. From my understanding from the material and interacting with others, I have used the income statement figures. I saw that in the annual reports, a number of figures were given and I got confused about which ones are relevant for me as it seemed too much information to digest. I got the answer as I read chapter three, I gained knowledge about what are the different types of financial statements and I need to focus majorly on the income statement, statement of changes in equity and balance sheet. As I entered the figures in the spread sheet, I was confused about the various items listed in the income statement, balance sheet and statement of changes in equity. One particular question that struck me was what retained earnings are. As I discussed with my peers, I understood that retained earnings are profits which are not taken by the owner but are kept invested in the business. As far as my company is concerned, I got interested in knowing what the income statement tells about the profits of the company. As i went through the statements and entered the figures, I analysed that the profits of the company are going down and from a figure of $78,948,000 in 2010; it went down to $4,055,000 in 2013 which is a huge fall. I am interested in knowing what the reasons are for this. I also saw that owner’s equity is decreasing and I am confused about why it is decreasing? It is not due to losses as the company is profitable. So, what can be the possible reason? As I discussed with others, I understood that possibly the equity is reduced as owner’s withdrew the capital from the company.

Well, the above are my KCQs related to the company and I look forward to working on other aspects of this course in future.

KCQs Chapter 3

 

Chapter 3

In the third chapter related to introduction to financial statements, I got to know that are four major types of financial statement- income statement, balance sheet, statement of changes in equity and cash flow statement. The first statement is the income statement which tells us what is the profit generated by the business. Profit is equal to revenue minus expenses. As I understand this, if I am running my perfume shop business, I am interested in knowing the profit which I can get by preparing the income statement. The next statement is the balance sheet which sets out the assets, liabilities and equity. For my business, by preparing the balance sheet, I will know what are the assets (which are controlled by the business and will provide benefits), liabilities (which the business owes to others) and equity (which belongs to me). From the statement of changes in equity, I will know whether my equity has increased or decreased. If the business generates profit, equity will increase but if the business is making loss, equity will decrease. I understood about the connection between the income statement, statement of changes in equity and balance sheet and realise that profit from income statement is added to equity in statement of changes in equity which is finally shown under the equity section in balance sheet. Cash is very important for successfully running any business and I can get to know about the cash coming in and going out of the business from the cash flow statement. Another interesting thing that I got to know from this chapter was that I can use the financial statements to calculate various ratios which can help me in analysing the performance of the business.

In summary, I found the lecture related to financial statements very informative and useful for my future business. I am really looking forward to understand as to how to analyse the financial statements by ratios in the coming weeks. However, I still am confused about the concept of value which Martin talks about from time to time and hopefully the concept is cleared in coming weeks.

 

KCQs for Chapter 1

Key concept and question 1- Different types of businesses and why they need to perform accounting

By reading chapter 1, I gained valuable information about through very interesting examples that as businesses are everywhere, they need to perform accounting functions for reporting purposes. As Martin pointed out that in Yeppoon, small coastal town of central Queensland, he found large number of businesses providing different types to goods and services to customers. As I reflect around me, I live in South Brisbane and around my place large number of businesses is operating from which large number of people earn their livelihood and for which the businesses need to do accounting so that they can know how much profit they are earning and what these balance sheet states as far as the assets they own and the liabilities they owe to there. My husband is a lawyer and therefore, he is providing services to the customers and he also makes use of accounting to know how much he earns. I realise that without accounting, the operations of these businesses will be without any direction as they would not know how much profit they are earning. As an example, I plan to open an exclusive perfume shop in my country and this is a business which is undertaking retail activities of selling perfumes. The reason that I want to open is to make money or as Martin states to earn profits. It is very important that for my business, accounts are properly maintained so that I get to know what are the profits for each month and then for the whole year. If by looking at the monthly profit figures, I see that business is not making very good profits, I will have to make a number of decisions to make it profitable as I do not want to run a loss making business. Also, as I will be running the business myself, it will be sole trader form of business and in sole trader form of businesses; I am personally responsible for making the payments to suppliers. If the business is not making enough profits, I will be personally liable. I would have really liked if Martin would have provided more information about how business operations can be expanded. I do not like partnership and if I want my business to grow further, how can I do that.

Key concept and question 2- Keeping the records of the business

By keeping proper accounts, I can know my profits and financial position. As Martin pointed out, he did his bookkeeping himself. I also plan to do the same that I do the bookkeeping of my business myself so that I get to know how my business is performing. I can do this by learning computer software and I hope that as I finish this course, I can get greater insight regarding this and later on learn the computer software like MYOB. I learnt about what is a journal and a ledger. In the journal, I would record all the transactions that are taking place in my business and after I have entered the transactions, ledger can be automatically produced by the computer. I am confused about debit and credit and I tried a number of times to understand what they really mean but somehow, I am not quite understanding that but hopefully as I go further in this course, things will be different.

Key concept and question 3- 5 elements of accounting

I hope that I have understood the five elements of accounting. For my perfume business, revenue is what I get from selling the perfumes. Expenses are the money that I spent for running my business like rent, electricity, buying perfumes from suppliers, etc. Asset is what the business owns like any furniture. Liability is what the business has to pay to others like if I take a loan from the bank. equity is what I invested to start the business. I also understand that assets should be equal to liabilities plus equity. I could not clearly understand as to what Martin meant by value and how it can be increased. I also understand extended accounting equation as per which profit which is equal to revenue minus expenses is also part of equity as any profits or losses increases or decreases equity.

In summary, I found first chapter very interesting and it was like learning the ABC of new language accounting. There are still a number of concepts which I am not clear about for which I hope to get the answers in coming weeks.

3 assets, 3 liabilities and 3 items of equity

For Abano Healthcare, three major assets are Property, plant and equipment, intangible assets and investment in subsidiaries. Property, plant and equipment is amount what the company has spent in buying property and various items of plant and equipment. Intangible assets are the ones which one cannot touch like patents, trademarks. Investment in subsidiaries what they have invested in other companies.
Three liabilities are borrowings which is loan, current income tax liabilities which is tax which is still to be paid and trade and other payables which are creditors.
Three items of equity are share capital, foreign currency translation reserve and retained earnings.

Annual reports of the company & links to other important information about the company

In New Zealand, the financial year comes to an end on 31th May. I am providing the PDF files for the financial statements for financial years 2011, 2013 and 2014. The annual reports of the company can be accessed by clicking on the following links-:

Abano Healthcare Annual report 2013
Abano Healthcare Annual report 2012
Abano Healthcare Annual report 2011

If you are interested in finding out the latest share price of company's shares, click on the link below-:
Current share price

If you are interested in knowing the latest news as to what is happening with the company, click on the link below-:
Latest news

Important information about the company- Abano Healthcare

As part of completing the various assessment tasks for ACCT11059 course, I have been assigned to research Abano Healthcare is a New Zealand based healthcare company listed on New Zealand stock exchange. The holding company is Abano Healthcare Group Limited which is listed on the New Zealand Stock exchange under the code ABA.

Interestingly, the company when it was formed in 1999 focused on the development of retirement village properties and aged care services. In 2000, the company repositioned its strategy and moved
away from property development and stepped into the field of medical and healthcare service businesses venturing into diagnostic and dental centres in year 2002 followed by other healthcare services in later years.

Abano operates successful businesses in four sectors of the healthcare market. The company co-invests with clinical leaders and founders in businesses which have growth and profit enhancement opportunities and the four sectors of the business comprise of Abano Audiology, Abano dental, Abano Diagnostics and Abano Rehabilitation.

As per the company website, the vision of the company is "to create an exemplary standard of care and treatment for our clients and patients by bringing together compatible businesses within the healthcare and medical service sectors, and offering multi-disciplinary solutions in the private healthcare market".

Introduction about myself and Albano Healthcare

Hi Friends,
My name is Mai Alkanthani and the purpose of creating this blog is to present important accounting information about New Zealand based health care company, Albano Healthcare. I hope you enjoy reading my blog and find it informative.