ANALYSIS OF TOTAL CAPITAL EXPENDITURE
Introduction and Background Information
Description to the board about the graphic
The graphics’ prediction for 2016
Implications of the prediction
Recommendations to the Managing Director and the executive team
Conclusion
References
ANALYSIS OF TOTAL CAPITAL EXPENDITURE
Introduction and Background Information
Capital expenditure is the allocation of funds to develop and improve on the long-term assets in a country or organization. The expenses of capital expenditure are recorded in the property, plant, and equipment account. A country’s capital expenditure determines its economic level. Australia’s economy has been growing at an average rate of 2.62% between the year 2010 and 2015. As a result, the economic experts are forecasting the gross domestic product of Australia for the year 2016 basing on the previous years. A historical statistic gives an overview of what can be expected from the reflection of the past financial periods.
Description to the board about the graphic
The representation of the graph indicates the total expenditure in Australia. The figures are recorded in two columns; the expected and the actual figures. Having a keen look at the graph, the difference between the expected figures and the actual figures is very minimal. The minimal difference is an indication that the people who made the analysis and came up with the data were very keen in the expenditure trend of Australia that they gave almost accurate forecasts (GREAT 2005). The economy of Australia has indicated a constant expenditure between the years 2012 and 2015. The average total expenditure over the years has shown to be $150 billion. The investment projects in Australia are anticipated to cut the growth rate by about one percent in the next five years considering the current situation.
The graphics’ prediction for 2016
The gross domestic product for Australia is expected to go up by almost three point five percent. The emergency of technology and sharing of information globally will boost the growth of Australia’s economy. The expected capital expenditure budget will remain the same percentage that is allocated for the financial year 2015-2016. For the period of 2012 to 2015, the annual expenditure for Australia has been maintained at an average of $150 billion. The consistency of the funds allocation is a great help in the determination of the future expected expenditure (GREAT 2010). However, the expected capital expenditure for the year 2016 is in the less than the expected expenditures for the previous years. The less money expected to be spent as a result that most of the investments have been accomplished. The investments are expected to yield returns during the 2016 year. Capital expenditures are aimed at developing a country and setting up new investments. When a country spends less money in infrastructure and equipment, the country is deemed to be attaining economic stability.
Implications of the prediction
Historical statistics are good bases when determining the future expectations. However, the market structures …
