BUS5IAF Introduction to Accounting and Finance
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BUS5IAF Introduction to Accounting & Finance (BUS5IAF)
Added on 2020-05-11
BUS5IAF Introduction to Accounting and Finance
BUS5IAF Introduction to Accounting & Finance (BUS5IAF)
Added on 2020-05-11
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Running Head: Accounting and Finance1Project Report: Introduction to Accounting and Finance
Accounting and Finance2ContentsIntroduction.......................................................................................................................3TELSTRA CORPORATION Limited..............................................................................3Debt valuation...................................................................................................................3Share valuation.................................................................................................................5Cost of capital...................................................................................................................6Market analysis.................................................................................................................8References.......................................................................................................................10Appendix.........................................................................................................................11
Accounting and Finance3Introduction:It is obligatory for every human being, character and shareholder to evaluate the condition of the market and deposit the money into the security or financial market accordingto the various changes such as fluctuations in the market, company’s internal position and external position, performance of the comapny in terms of finance, state of the stability of thecomapny, comapny various micro and macro factors etc. For identifying the above explained elements, an entity must take the assistance of financial analyst. Being a consultant, Telstra Corporation limited has been evaluated to express the investor or individual about the company’s performance and the opportunity of investment in the TELSTRA CORPORATION LIMITED. This analysis and paper expresses the result on the basis of various tools such as debt valuation, securities valuation, analysis of the market, cost of capital etc. the paper has been made to express the investment prospect in TELSTRA CORPORATION LIMITED to the share holders and debt holders. TELSTRA CORPORATION Limited:This report depicts the investors about the TELSTRA CORPORATION. This company is recognized as the biggest companies in the Australian market in the industry of telecommunication and Media. This company develops and runs its activities in the business of mobile network, internet access, telecommunication networks and numerous other servicesof entertainment. The main office of the company is at Melbourne, Australia. Comapny runs its activities and main operations from there only. The main objective of TELSTRA CORPORATION is to extend the position of company’s services and products as the biggest service and products provider of IT (information and technology) in the Australian market (Our Company.2017). In 1901, this business has come into existence. This company is frequently increasing its functions and operations through various practices and activities. Debt valuation:TELSTRA CORPORATION LIMITED has been examined in terms of finance on thebasis of the debts in this study. Debt valuations study depicts the investor about the performance and the financial strength of the comapny. The study over the debt valuation of TELSTRA CORPORATION LIMITED depict that the short term of the comapny is $ 2369 million which has been raised through the bank overdraft and by issuing some debts for the short term whereas the long term debt has been raised through issuing the debts for a long
Accounting and Finance4period into the market to manage the activities and performance. Following are the details of the debts of the company:Telstra Corporation Limited20172016201520142013Long term debt1457400000014378000000138870000001.3316E+1014099000000Short term debt2369000000253700000014030000002199000000685000000(Morning star, 2017)Further, in this analysis, industry has been analyzed and the debt value of the industry has been compared to the comapny to evaluate the strength and position:Industry's debt structure20172016201520142013Longtermdebt1459000000138700000014030000001287000000185000000Shorttermdebt200000000100000001547000001248790012698745(Morningstar, 2017)Through this analysis, it has been evaluated that the debt position of the comapny and the industry is bit similar. Industry has raised the funds from the debt in current year and same has been done from the company. Thus it has been found that the debt structure of the company is bit constant with the performance of the industry. According to this analysis, comapny is not required to make any changes into the policies and debt position of the comapny. Current situation depict that the comapny is leader in the market and thus the position and the state of the company presents the industry. The industry doesn’t influence over the short term and long term debts of the comapny. At the end, it has been found that the cost of debt of the comapny is 4.9%. The interest rate of the debt of the comapny is 7% and according to the Australian government, the tax rate is 30%. Thus through it, it has been found that the following are the calculations of the cost of debt of the comapny. Calculation of cost of debtOutstanding debt14574000000interest rate7%Tax rate0.3
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