Financial and Economic Interpretation and Communication

This report provides an analysis of financial and non-financial information of Catlex Australia Limited. It includes financial ratios, non-financial analysis, and conclusion. The report concludes that the company is performing well and investors are recommended to invest in the company.

Running Head: FINANCIAL AND ECONOMIC INTERPRETATION AND
COMMUNICATION
FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
Name of the Student
Name of the University
Author Note

1FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
Table of Contents
Executive Summary...................................................................................................................2
Analysis......................................................................................................................................2
Interpretation..............................................................................................................................3
Conclusion..................................................................................................................................5
Reference....................................................................................................................................6

2FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
Executive Summary
The assessment of performance of the company is not only limited to financial
information rather it also depends on non-financial information. It serves as most important
tool used by the users for analyzing the overall performance of the organization as well as
their strategy. It is because of this reason; companies are in great pressure for delivering value
not only to the shareholders but also for the other stakeholders. Catlex Australia Limited is
the transport supplier of fuel, convenience retailer as well as integrated oil refining and the
marketing company (Caltex. 2019). Hence, the purpose of this report is to do the analysis as
well as interpretation of financial information as well as the non-financial information of
Catlex Australia Limited.
Analysis
Assets Turnover Year- 2018 Year- 2017
Revenue 21,731,342.00$ 16,285,810.00$
Total Assets 6,727,623.00$ 6,355,220.00$
Result 323% 256%
Operating Profit Ratio Year- 2018 Year- 2017
Operating Profit 819,969.00$ 930,497.00$
Revenue 21,731,342.00$ 16,285,810.00$
Result 3.77% 5.71%
Current Ratio Year- 2018 Year- 2017
Current Assets 2,871,585.00$ 2,727,623.00$
Current Liabilities 2,194,194.00$ 2,358,669.00$
Result 1.31 1.16
Debt-Equity Ratio Year- 2018 Year- 2017
Long Term Debt 1,144,365.00$ 888,650.00$
Equity Funds 3,389,064.00$ 3,107,901.00$
Result 0.34 0.29
Dividend Yield Ratio Year- 2018 Year- 2017
Dividend Paid 307,757.00$ 292,107.00$
Market Share Price 34.05$ 25.87$
Result 9,038.38$ 11,291.34$
Catlex Australia Limited

3FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
Table: Ratio Analysis (Caltex. 2019)
Interpretation
Financial Analysis
Financial information of the Catlex limited is analyzed and interpreted with the help
of calculation of the financial ratios. The operating profit margin of the company for 2017
was 5.71% and for the year 2018 was 3.77%, which means there was decrease of 1.94% over
last year. This decrease in the ratios shows that company’s ability for generating profit before
making payment of taxes as well as interest changes has been decreased over last year.
Further, assets turnover ratio of the company for the year 2017 was 256% and for the year
2018 was 323%, which means that that there was increase of 67% over last year (Strelnik,
Usanova and Khairullin 2015). This decrease in the ratio indicates that company’s ability for
utilizing their assets has been decreased over last year but still it is able to generate profit
from its assets. In addition, the current ratio of company for 2017 was 1.16 and for year 2018
was 1.31, which means that there was increase of 0.15 over the last year. This increase in the
current ratio shows that company’s ability for meeting its liabilities of short-term has been
increased over last year (Elzahar et al. 2015). Moreover, debt to equity ratio of the company
for 2017 was 0.29 and for the year 2018 was 0.34, which means that the ratio has been
increased by 0.05. The increase in debt to equity ratios shows that company has increased
using more debt as compare to the shareholders equity over last year. Lastly, dividend yield
ratio of Catlex for 2017 was 11,291.34 and for 2018 was 9,038.38, which means decrease of
ratio by 2,253 (Caltex. 2019). The decrease of dividend yield ratio of Catlex Limited
indicates that annual dividend of the company in comparison to its share price has decreased
over last year but still company’s is making payment of dividend on regular basis
(Kocmanová and Šimberová 2014).

4FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
Non Financial Analysis
The Catlex Australia Limited is the Australia-based convenience retailer as well as
transport fuel supplier, which is engaged in the business of refining, purchasing, distributing
as well as marketing of the products as well as operating the convenience stores all across the
Australia. The Catlex Australia is operating in the two different segments that include Supply
and Marketing as well as Lytton (Anand and Grover 2015). The segment of Supply and
marketing is the integrated transport chain of fuel supply, which sources refined products on
international markets as well as sells lubricants, Catlex fuels, convenience store goods as well
as specialty products. Further, the segment of Lytton in Brisbane refines the crude oil into the
diesel, petrol, jet fuels and different fuel oil as well as specialty products, for instance LPG.
The products as well as services of the company is consists of Techron Fuels and Star Mart
(Caltex. 2019).
Catlex has made significant progress after executing the strategies of Convenience
Retails as well as Fuels & Infrastructure. This sets the company up for the sustainable growth
as well as for the success of long-term. The highlights of the company’s performance
includes ongoing international business expansion, retention of Woolworth’s fuel supply
contract, Australian wholesale sales volume growth, implementing rewards and loyalty
aspects of Woolworth partnership and continuing roll-out of the Foodary format of retail.
Moreover, company has also announced Off-market Buy back of approx. $260 million. This
will provide great benefit to the shareholders (Sauaia 2014).
The existing management structure shows that the ratio of independent to dependent
directors is 7:4. The chairman of the company is also the independent director. In the year
2018, the base fee of the non-executive director has been increased by 2 percent. The board
has determined that there will be freezing of MD and CEO fixed remuneration for 2019 as

5FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
well as there will be no changes in their remuneration (Churet and Eccles 2014). Moreover,
the company is having 5,000 employees in convenience retail and 6,629 employees are
working all across nine entities that are located in the Australia, Singapore and New Zealand.
In addition, board of the company recognizes that the issues of environmental, social as well
as governance are significant for the investors and the other stakeholders (Caltex. 2019).
Catlex focuses on building as well as monetizing the scale and the capability all across the
convenience and fuels value chain for maximizing the value of shareholders. It makes
positive contribution towards communities in which it operates care the people; protect
environment as well as acts in ethical manner (Saeidi et al. 2015).
Conclusion
Therefore, it is concluded from the analysis of both financial and non-financial
indicators that company is performing well. The analysis of the financial information
indicates that its efficiency, liquidity and leverage position is good. However, the operating
profit margin was decreased, which indicates high cost over revenue. Further, dividend yield
ratio indicates that decrease in the dividend over shares price but still company is good
position because it has opted for regular dividend. Moreover, the analysis of non-financial
information indicates that the company provides great opportunities of growth in present and
future scenarios.
Hence, investors are recommended for investing in the company. It is because the
financial and the non-financial information indicate that company is doing well. The
company’s financial position indicates high growth in future. Therefore, potential investors
will get benefit in terms of regular returns and increase of shareholders value.

6FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION
Reference
Anand, N. and Grover, N., 2015. Measuring retail supply chain performance: Theoretical
model using key performance indicators (KPIs). Benchmarking: An International
Journal, 22(1), pp.135-166.
Caltex. 2019. 2018 Annual Report | Caltex Australia. [online] Available at:
https://www.caltex.com.au/annual-report-2018 [Accessed 5 Oct. 2019].
Churet, C. and Eccles, R.G., 2014. Integrated reporting, quality of management, and financial
performance. Journal of Applied Corporate Finance, 26(1), pp.56-64.
Elzahar, H., Hussainey, K., Mazzi, F. and Tsalavoutas, I., 2015. Economic consequences of
key performance indicators' disclosure quality. International Review of Financial
Analysis, 39, pp.96-112.
Kocmanová, A. and Šimberová, I., 2014. Determination of environmental, social and
corporate governance indicators: framework in the measurement of sustainable
performance. Journal of Business Economics and Management, 15(5), pp.1017-1033.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate
social responsibility contribute to firm financial performance? The mediating role of
competitive advantage, reputation, and customer satisfaction. Journal of business
research, 68(2), pp.341-350.
Sauaia, A.C.A., 2014, March. Evaluation of performance in business games: financial and
non financial approaches. In Developments in Business Simulation and Experiential
Learning: Proceedings of the Annual ABSEL conference (Vol. 28).
Strelnik, E.U., Usanova, D.S. and Khairullin, I.G., 2015. Key performance indicators in
corporate finance. Asian Social Science, 11(11), p.369.