Consolidated Income Statement for the year ending 30 June 2013
| Consolidated Income Statement for the year ending 30 June 2013 | |||
| 2013 | 2012 | Difference | |
Revenue from continuing operations |
$'000 336,460 |
$'000 277,613 |
58,847 |
| Employee benefits expense | -85,108 | -74,013 | -11,095 |
| Consultant and contractor expense | -9,682 | -8,838 | -844 |
| Marketing related expenses | -41,372 | -32,315 | -9,057 |
| Technology expenses | -8,742 | -10,132 | 1,390 |
| Operations & administration expense | -27,836 | -26,333 | -1,503 |
| Depreciation & amortization expense | -18,760 | -15,184 | -3,576 |
| Profit before tax & interest (EBIT) | 145,050 | 110,798 | 34,252 |
| Finance income | 9,492 | 8,108 | 1,384 |
| Finance costs | -34 | -456 | 422 |
| Profit before income tax | 154,508 | 118,450 | 36,058 |
| Income tax expense | -44,762 | -31,668 | -13,094 |
| PROFIT FOR THE YEAR | 109,746 | 86,782 | 22,964 |
Major changes
I have included the 2012 and 2013 figures, as well as the difference between the two financial years so that the Income Statement shows a comparison of two years.
Net Profit up 26% in 2013 to $109.7 million
Revenue increased by 21% to $336.5 million
Earnings per share has improved by 26% to 83.3 cents.
Interpretation of the report
From the report, it is obvious that the profit for the 2013 financial year has increased by $22,964. This is due to a significant increase in sales and a small decrease in technology expenses and finance costs.
KCQ's
It is evident that there was an increase in employee benefits expense and marketing related expenses. When further investigated, it was found that salaries increased by approximately $10,000 during the financial year, which subsequently affects the income earned by the business.
I do not understand the rise in marketing expenses, it is assumed that the entity increased advertising, although there were no notes included with the figures, so I am still unsure of why the figure has increased by almost $9,000.
I also cannot make sense of the income tax expense and why there was such a huge increase for this expense.
In comparison to the figures provided with the notes, there has been a huge tax increase of $10,000 when the adjustments for current tax to prior periods is taken into consideration. I am having trouble understanding what the income tax expense actually is.
Hi Ella,
ReplyDeleteVery detailed information. It is great to see that your company's net profit has increased by almost 26%!
You should view and comment on my blog about Australia China Holdings Limited!
http://katesherry11059.blogspot.com.au/p/australia-china-holdings.html
Kate
Hi Kate, thanks for the feedback! I will definitely be visiting your blog.
DeleteElla
Hi Ella,
ReplyDeleteYour net profit increase was a good result. with the increase in marketing expenses i am guessing they had more advertising projects on the go and were trying different ways of attracting business. To me when marketing expenses rise it shows the business is trying to increase customer sales and expand to a wider range of customer by advertising.
Income tax expense would have increased because of increase in profit and maybe other things to do with the complex deferred tax accounts. :)
Hi Brittany,
ReplyDeleteThankyou for clearing those few things up for me, makes so much more sense now!
Hi Ella, You're blog would have to be my favourite! It is so eye catching and a please to read through. Your summaries are also great and it's obvious you are learning so much about REA Group, nice work!
ReplyDeleteIt's interesting to see that their marketing expenses had risen but so had their net profit. Maybe a few new marketing campaigns had something to do with it!?
Your* That's what staying up all night blogging does to your brain! haha.
Delete