Accounting Report

Corporate Financial Report Analysis

Telstra Corporation Ltd.

Team Members:

Chak Wai Ting 2084619

Christopher Nichol 7383479

Jono Gelbart 9697926

Shehani Lokeswara 2051060

INDEX

Executive summary 4

Introduction 5

Business Background 5

Trend Analysis - Transition from 2011 6

Ratio Analysis 7

Profitability Analysis 7

Return on Average Equity (ROAE) 7

Return on Average Assets (ROAA) 7

Net Profit Rate 8

Gross Profit Rate 8

Cash Flows to Sales Revenue Rate 9

Efficiency Analysis 9

Total Asset Turnover Ratio 9

Inventory Turnover Ratio 10

Liquidity Analysis 10

Working Capital Ratio (WCR) 10

Quick Asset Ratio (QAR) 10

Cash Flow Ratio 11

Capital Structure Analysis 11

Debt to Equity Ratio 11

Debt Ratio & Equity Ratio 12

EBITDA interest cover 12

Debt Coverage Ratio 12

Conclusion 12

Recommendations 13

List of Abbreviations 15

Appendix 16

Bibliography 22

Executive summary

The purpose of this report is to evaluate the financial performance of Telstra Corporation Limited from a trend analysis and ratio analysis composed of profitability, efficiency, liquidity and capital structure ratios.

Overall, Telstra is an influential and leading telecom company in Australia and experiencing a middle-term transition in products and infrastructure period to better cope market needs and development of technology. Overall it realized a moderate business growth and the effects of investment for transition are now apparent. Low economic environment also slow down Telstra’s growth, however, trend analysis showed unfavorable changes in net profit, current liability and equity provisions over time. And the company showed improvement spaces in profitability and liquidity analysis- insufficient profit growth and a high liability rate. Efficiency and capital structures ratios do not reflect other problems. Several...