Answer To: • Explain!the!basic!principles!of!financial!accounting!...
Robert answered on Dec 26 2021
FINA6017: Financial Management 1
FINA6017: Financial Management
Name of the Student
Student ID
Name of the University
Name of the Lecturer
08/22/2017
FINA6017: Financial Management 2
Executive Summary
The present research paper is a financial analysis paper conducted on the company Telstra
Corporation. The research paper gives you an insight on the fundamentals of the financial
analysis as a research paper. It also provides you an in depth analysis of the Corporation, helps in
understanding the financial metrics of the corporation and also provides you the rationale from
an investor and stakeholder point of view. Overall the analysis helps in understanding how to go
about a research paper that is based on financial statement analysis of the corporation.
FINA6017: Financial Management 3
Table of Contents
Particular Page Nos.
Introduction 4
Importance of Financial Statements 4
Balance Sheet 4
Profit and Loss Statements 7
Cash Flow Statements 9
Ratio Analysis 11
General Analysis 14
Political Analysis 15
Conclusion 16
References 17
FINA6017: Financial Management 4
Introduction
I want to make an analysis of the financial statements of Telstra Corporation limited. Telstra is
an Australian telecommunication and technology company which provides or builds the
communication network globally and having its headquarters in Melbourne, Australia. It is a
public company established in 1975 as Australian Telecommunication Commission.
Important of Financial Statements
Financial Statements of an enterprise describes the financial position of the company over a
period of time. We can say it is the mirror image of the company as what is happening inside the
company we can easily know with the help of financial statements. It is very useful to the
shareholders, investors, creditors and other stakeholders who has a interest in the company or
want to invest in the company as by analyzing the financial statements they can easily come to a
conclusion whether to invest or not. Generally the financial statements includes of three
statements namely:
Balance Sheet: Balance sheet of an organization reflects the assets and liability position of an
enterprise at a given point of time. By analyzing the balance sheet we can understand the future
prospect of the company with respect to the liquidity, solvency and for the future growth of the
company. It is a statement by which w can easily understand whether we should invest in it or
not.
FINA6017: Financial Management 5
Balance sheet
Period ending 6/30/2016 6/30/2015
Current assets ($) ($)
Cash and cash equivalents 3,550,000 1,396,000
Net receivables 4,737,000 4,721,000
Inventory 557,000 491,000
Prepayments 426,000 346,000
Current tax receivables 8,000 9,000
Derivative financial asset 62,000 7000
Total current assets 9,340,000 6,970,000
Trade and other receivables 1,293,000 1,171,000
Investment – other 394,000 137,000
Investment - accounted for using equity method 171,000 201,000
Inventories 29,000 32,000
Property plant and equipment 20581000 20450000
Intangible assets 9229000 9332000
Derivative financial asset 2180000 1790000
Deferred tax asset 54000 66000
Deferred benefit asset 15000 296000
Total noncurrent assets 33,946,000 33,475,000
Total assets 43,286,000 40,445,000
Current liabilities
Trade and other payable 3,948,000 4,080,000
FINA6017: Financial Management 6
Employee Benefits 913,000 844,000
Other provision 92,000 126,000
Borrowings 2,655,000 1,496,000
Derivative financial liabilities 286,000 214,000
Current tax payables 176,000 291,000
Revenue received in advance 1,118,000 1,078,000
Total current liabilities 9,188,000 8,129,000
Other payables 66000 74000
Employee Benefits 169,000 147,000
Other provision 127000 137000
Borrowings 14647000 14138000
Derivative financial liabilities 663000 911000
Deferred tax Liability 1493000 1558000
Deferred benefit Liability 4000 4000
Revenue received in advance 1022000 837000
Total long term liabilities 18,191,000 17,806,000
Common stock 5,167,000 5,198,000
Reserve 62,000 372,000
Retained earnings 10,642,000 8,533,000
Non-Controlling Interest 36,000 407,000
Total equity 15,907,000 14,510,000
Total liabilities 43,286,000 40,445,000
FINA6017: Financial Management 7
From the above balance sheet we can analyze that the company’s performance is better from the
last year as the working capital is positive in this year which was negative last year though the
current liability has been increased this year but this is offset by increase in the cash balance this
year this may be because of sale of stake in Auto homes. Plant property and equipment has also
been increased from last year this is an indication that the company is expanding its business or
making alteration to the existing business. As the company is making avenues for new business
the borrowings has been increased this year but that is not an issue because the company has
positive working capital and adequate assets to pay off its liabilities. The retained earnings has
been increased from last year means the company is earning profits and these unutilized earnings
are transferred to the retained earnings
Profit and loss statement: Profit and loss statement of an organization reflects the profit or loss
of the organization over a period of time. It is a statement that shows whether the company is
making profit from its operations or not.
Income statement
Period 6/30/2016 6/30/2015
Revenue ($) ($)
Revenue(excluding...