ACCT11059 – USING ACCOUNTING FOR DECISION MAKING Student Name:Student Number: Activity 3: In depth review of a Company Annual Report 1. Address the following issues: 1. Name of chosen Company:Telstra Corporation 2. The registered address of the Company:Level 41 Telstra Centre 242 Exhibition Street Melbourne, VIC 3000 Australia +61-3-96346400 (Phone) 3. The industry the Company is in: Telecommunications Industry 4. Period covered in the Annual report:2009 5. Does the report contain Highlight statements?
If so, what are the key points of the statements? Yes the reports contain highlight statements 6. What might be the purpose of highlight statements? The purpose of the highlight statements is to point out the key and important figures which might be of utmost important for investors in the annual reports. 7. Has the annual reports been audited? If so, which company audited the annual reports? Yes the annual reports of the company have been audited. Ernst & Young audited the annual reports. 8. What is the purpose of auditing annual reports?
The purpose of auditing annual reports is to add credibility to the implied affirmation by an organization’s management that its financial statements fairly represent the organisation’s position and performance to the firm’s stakeholders. 9. List two non-financial pieces of information contained in the financial statements. Non-financial information refers to information such as general economic conditions, technological changes in the client’s industry and new products from competitors. Two non-financial pieces of information is environmental regulation and performance and Industry dynamics. . Provide the following amounts from your financial statements 1. Total Current Assets:6,192,000,000. 00 AUD 2. Total Equity:12,681,000,000. 00 AUD 3. Cash Flows from investing activities:(4,633,000,000. 00) AUD 4. Revenue earnings per share:32. 9 cents 5. The profit/loss of the company (after tax):4,076,000,000. 00 AUD 6. Cash and cash equivalents held at the end of the period: 1,381,000,000. 00 AUD 7. Dividends paid:3,517,000,000. 00 AUD 3. Answer the following questions from your annual reports 1.
What financial statements are included in the annual reports and what are their purposes? The financial statements included in the annual reports are as follows: ? Income Statement: The income statement is one of the major financial statements of a company. It measures a company’s financial performance over a specific accounting period. It basically helps investors and creditors determine the past performance of the company, predict future performance as well get to know the future cash flow generating capability of the company. Statement of comprehensive income: This statement measures the sum total of all the operating and financial events which have led to change in the value of the owners interest in the company. ? Statement of financial position: Also known as the Balance Sheet tells about the company’s assets, liabilities and ownership equity in a given accounting period. ? Statement of cash flows: The cash flow statement basically tells about a firm’s liquidity, solvency and its ability to change the cash flows in future. Statement of changes in equity: This statement is also known as statement of retained earnings and clarifies about the changes in the company’s retained earnings over a given accounting period. 2. How are the assets being financed? The assets have been financed with long term debt and retained profits. 3. Who holds the largest percentage of shares in the company? Mr. Solomon D Trujillo 4. Explain if you consider the company to be in a healthy financial position.
In my opinion by looking at the income statement and balance sheet of the company it is in a healthy financial position as it generated a high net profit after tax. Due to an increase in profit the company’s earnings per share also improved. Moreover the liquidity of the company has also improved as compared to 2008. The current liabilities of the firm have also reduced which indicates a good financial position for the company. So overall it can be said that the company is in a healthy financial position. . References: ? www. telstra. com. au/annualreports viewed on 4th September 2010.