Financial Analysis of Sky Network Television Limited

Financial Analysis of Sky Network Television Limited i
FINANCIAL ANALYSIS OF SKY NETWORK TELEVISION LIMITED
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Financial Analysis of Sky Network Television Limited ii
Executive Summary
The purpose of this paper is to prepare a report regarding one of the Australian publicly listed
firms. This entails analysis of its financial statement over the last two years. This report
provides direct comparison between Sky Network and its competitor. From the analysis, Sky
Network Television Ltd has been experiencing some financial hitches in the last two years.
This is evident by decreasing trend in its profitability, liquidity, solvency and efficiency
ratios. In essence, it is clear that if some issues are resolved, Sky Network Television stands
as a viable investment opportunity for potential investor. It is clear that Sky Network
Television Ltd has been experiencing some financial hitches in the last two years. This is
evident by decreasing trend in its profitability, liquidity, solvency and efficiency ratios. For
instance, the company gross profit margin and its return on equity decreased over the two
years, indicating a decrease in its financial performance or position over the two years. In
essence, it is clear that if some issues are resolved, Sky Network Television stands as a viable
investment opportunity for potential investors. Basically, based on Sky Network Television
Limited asset turnover ratio, it is evident that its management is not efficient enough in using
its assets in generating the required amount of sales. Moreover, Based current ratio analysis,
Sky Network Television network seems to be experiencing some difficulties while settling its
short-term debt commitments. This is due to the fact that its current ratio for the last two
years was significantly below 1 which is not an attractive ratio for any company. It can also
be concluded that the company is financially weak in terms of profitability and given that its
profitability ratios decreased over the last two years. Such call for appropriate measures by
the management in ensuring that the management is doing the best means possible in making
sure that all assets are utilized appropriately.

Financial Analysis of Sky Network Television Limited 1
Table of Contents
Executive Summary...............................................................................................................................ii
1.0 Introduction...............................................................................................................................2
1.1 Purpose..................................................................................................................................2
1.2 Scope.....................................................................................................................................2
1.3 Limitation..............................................................................................................................2
2.0 Company Overview.........................................................................................................................2
3.0 Ratio Analysis...........................................................................................................................3
3.1 Current Ratio...............................................................................................................................3
3.2 Gross profit margin......................................................................................................................4
3.3 Return on Equity..........................................................................................................................4
3.4 Asset turnover ratio.....................................................................................................................4
3.5 Debt to equity ratio.....................................................................................................................5
4.0 Analysis and Comparison of Sky Network Television Ltd with Netflix Inc..............................5
5.0 Conclusion.......................................................................................................................................6
References.............................................................................................................................................8

Financial Analysis of Sky Network Television Limited 2
1.0 Introduction
1.1 Purpose
The purpose of this paper is to prepare a report regarding one of the Australian publicly listed
firms. This requires analysis of its financial statement over the last two years. It also aims to
conduct financial ratio analysis of the company as well as a comparison with another firm in
the same industry. Basically, the report provides direct comparison between Sky Network and
its competitor.
1.2 Scope
The scope of this report is to assess financial performance and health of the company. This
would assist in providing recommendation to potential investors as to whether the company
offer viable investment opportunity to them. The analysis would provide potential investors
and shareholders better comprehension of the organization’s financial performance and
condition than what they could have accessed through perusal of the financial statements.
Basically, the report aims to provide clear understand to potential investors of the company
financial performance and status in media industry.
1.3 Limitation
Some of the limitations of using the five ratios in analysing the company financial position
include seasonal factors which could distort the analysis. Furthermore, ratio analysis could
distort comparison due to different account practices. Further, different organization are said
to operate differentiated divisions in numerous sector. This makes it hectic in establishing
meaningful set of the sector-average ratios.