Financial and Sustainability Reporting of Telstra in 2018

FINANCIAL REPORTING 1
FINANCIAL
REPORTING

FINANCIAL REPORTING 2
Financial reporting:
Current ratio:
This is the ratio which is expressed between the current assets and the current liabilities of the
company. It indicates the ability of the company to meet its short term obligations ("Current
Ratio Formula - Examples, How to Calculate Current Ratio", 2019).
The current ratio of the company has deteriorated when compared with the previous year.
The reduction is mainly due to the fall in the current assets and the current liabilities.
Net profit ratio:
This is the ratio which is expressed between the amount of the net profit earned by the
company and the net sales of the company. It indicates the degree of profitability achieved by
the company during the year.
The net profit ratio of the company has deteriorated when compared with the previous year.
The reduction is mainly due to the fall in the net sales and the net profit (Bragg & Bragg,
2019).
Gross profit ratio:
This is the ratio which is expressed between the amount of the gross profit earned by the
company and the net sales of the company. It indicates the degree of profitability achieved by
the company during the year ("Gross Profit Ratio (GP Ratio) - Formula, Explanation,
Example and Interpretation | Accounting for Management", 2019).
The gross profit ratio of the company has improved when compared with the previous year.
The reduction is mainly due to the fall in the amount of net sales and the increase of gross
profit.
Return on assets ratio:
This is the ratio which is expressed between the total amount of the assets of the company
and the total net profit earned by the company during the year. It shows the efficiency with
which the total assets of the company re being employed so as to give the profits ("Return on
assets ratio", 2019).
This ratio of the company has deteriorated when compared with the previous year. The
reduction is mainly due to the fall in the net profit and the rise in the amount of total assets.

FINANCIAL REPORTING 3
Debt equity ratio:
This is the ratio which is expressed between the debt and the equity of the company. It
indicates the amount of the debt or the equity employed into the business ("Debt to Equity
Ratio - How to Calculate Leverage, Formula, Examples", 2019).
The debt equity ratio of the company has deteriorated when compared with the previous year.
The reduction is mainly due to the fall in the debt and the equity amounts, but the fall is not
in the same amount.
The above ratios shows that the position of the company has deteriorated over the year. And
this means that the company needs to work hard towards the improving the financial position
of the company. The following shows the improvements that have taken place in the
company when compared with the previous year of 2017:
The year of 2018 marks an improvement in the amount of the dividend which has been paid
by the company. The company has paid 11 cents on each ordinary share which consist of 7.5
cents and the special dividend to the tune of 3.5 cents. The shares of the company are being
traded which excludes the entitlement to the amount of the dividend from Aug to Sep, 2018.
This means that the total amount of the dividend for the company during the year of 2018 is
about 22 cents which includes 15 cents in the ordinary shares and 7 cents as social dividend.
This means that the year 2018 marked the payment of the 78% of the total amount of the
underlying earnings.
With regard to the improvement in the labour, the company has successfully decreased its
expenses by about 4.2% or an amount to $224 million to about $5157 million. The company
has successful reduced its redundancy costs by about 47.9% or to an amount of $150 million
which the result of the decrease is restructuring costs that were incurred during the previous
year of 2017. The labour substitution costs reduced by 6.1% or to the amount of $59 million
and this was mainly due to the reduction in the amount of labour outsourcing. The company
also went on to reduce its salaries along with the associated costs which were reduced by the
amount of $9 million or about 2%. This took place due to the decrease in the number of
employees that were off shore. There was no reduction in the total full times staff and its
equivalents. There was an increase in the number domestic which was set off by the decrease
in the number of the off shore employees.