Analysis and Interpretation of Annual Reports

This presentation discusses the significance of analyzing and interpreting annual reports for organizations. It explores the case study of Bega Cheese and Telstra, highlighting their key strategies, accounting policies, profitability, liquidity, turnover, leverage, and strategic changes. The conclusion emphasizes the need for Telstra to focus on loaned funds and Bega to prioritize profitability.

ANNUAL REPORT
ANALYSIS AND
INTERPRETATION

INTRODUCTION
Analysis and interpretation of reports is
fundamental for every organisation. It helps in:
• Strategic corporate decision making.
• Increasing long term gains.
• Assessment of organisational health.
• Financial comparison.

BEGA CHEESE
• Bega Cheese Ltd. is an Australian
company that is specialised in the
production of cheese and dairy products.
• It was first established in the year 1899 as
a creamery company.
• It produces and distributes high quality
cheese products all over the world.

KEY STRATEGIES
• Bega Cheese has done several acquisitions.
• It has started offering more products because of such
acquisitions.
• It made significant efforts in improvement of packaging.
• Efforts have been given to improve the supply chain
management.
• Company is aligning itself with several sustainable and
social responsibility programs.

KEY STRATEGIES
• Distribution is spreading world wide.
• Quality assurance program has been developed.
• The Board has also adopted corporate
governance policies that enhance the value of the
organisation.
• The corporate governance complies with the ASX
Recommendations.

ACCOUNTING POLICIES
• Capital is raised through purchase of Share
Purchase Plan.
• Inventories were treated at fair values
including margin.
• The financial statements are prepared by
following the AASB, Australian Accounting
Standards and the Corporations Act 2001.
• There is compliance with IFRS and IASB.
• Historical cost concept has been followed.

ACCOUNTING POLICIES
• Acquisition method of accounting is used in case
of subsidiaries consolidation.
• The consolidated statement is presented in
Australian dollars.
• Revenues are measured at fair value of the
consideration that is received or will be received
in the future.
• Government grants are recognised at fair values.

ACCOUNTING POLICIES
• Trade receivables are initially recognized at fair value and then
measured at amortised costs. The settlement period is usually 30
days.
• Inventories are valued at lower of the cost and net realisable
value.
• Property, plant and equipment are stated at historical cost less
depreciation.
• Goodwill is not amortised but is tested for impairment annually.
• Provisions are valued at present value.

BEGA PROFITABILITY
Gross Profit Margin Operating Profit Margin Net Profit Margin
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2018
2017

BEGA LIQUIDITY
Current Ratio Quick Ratio Cash Ratio
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2018
2017

BEGA TURNOVER
Receivable Turnover Inventory Turnover Net working capital Turnover
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
2018
2017

BEGA LEVERAGE
Debt Ratio Debt to Equity Ratio
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
2018
2017

TELSTRA STRATEGIC CHANGES
• Increased the strategic investments and
thereafter improved the network.
• Reduced the traffic time.
• Launched Telstra Smart Modem.
• The company is leveraging its
investments in digitisation.

TESTRA STRATEGIC PILLARS
The strategic pillars are-
• Simplification of products and create digital
experience.
• Establishment of standalone infrastructure.
• Simplification of working structure.
• Cost reduction programs and portfolio
management.

BEGA vs. TELSTRA
Basis of Comparison Bega Cheese Telstra
Mission & Vision Vision is to become a Great Australian
Food Company and Mission is to drive
change and build a better future.
Vision is to be a world class
technology company and Mission is to
create an excellent connectivity for
everyone.
Corporate Governance It is committed in achieving and
maintaining the highest standards and
maintains accountability and
transparency while conducting
business.
It is also committed in achieving
excellence in corporate governance,
transparency and accountability.
Sustainability Environmental solutions and
Responsible business.
Environmental solution, Responsible
business and Digital Futures.

BEGA vs. TELSTRA

CONCLUSION
• It can be concluded that every organisation
follows several strategies, policies and
frameworks. Every such detail is minutely
pointed out in the annual report of the
company. The analysis of the Bega Cheese and
Telstra states that both these companies are
renowned in Australia and are engaged in
several sustainable activities and strategic
evolution but yet Telstra needs to focus on its
loaned funds where as Bega needs to focus
more on profitability.

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