Aristocrat Leisure Limited and Ainsworth Game Technology Limited are the two Australian companies operating in the industry of gambling technology as well as traded on the Australian Stock Exchange. By critically analyzing their financial and accounting information primarily from 2001/2002 the annual financial reports and relevant available sources, this report is to assess and compare the financial situations of both companies which focus on five areas in terms of financial measurement: Liquidity and Short-term Solvency, Operating Efficiency, Capital Structure and Long-term Solvency, Profitability and Return on Investors.
Combining all the factors above being analyzed, Aristocrat Leisure Limited is considered at a better financial position although it is relatively risky with its capital structure and long-term solvency, in which less protection is available in Aristocrat for long term debt holders, Aristocrat Leisure Limited also has much room to improve in the operation efficiency, the control of heavy sales and distribution expenses; Ainsworth Gaming Technology was experiencing a difficult financial situation particularly at net loss in the first financial year of going public and probably continue to be loss in the following financial year unless it undertakes significant change or improvement. .
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Content.
Page.
1. Introduction 3.
2. Overview on Background 3.
3 Financial Analysis 4.
3.1 Liquidity and Short-term Solvency 4.
3.2 Capital Structure and Long-term Solvency 5.
3.3 Operating Efficiency 7.
3.4 Profitability 8.
3.5 Valuation 9.
4 Articles 18.
5 Conclusion 20.
6. References 23.
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1. Introduction.
Financial reporting basically provides information that identifies, measures, and communicates financial information about economic entities to reasonably knowledgeable users. This paper, based primarily on 2001/2002 annual financial reports, attempts to analyze and compare the financial situations between Aristocrat leisure Limited and Ainsworth Game Technology Limited in Australian gaming industry.
