Financial, Social and Environmental Performance Analysis of Telstra Corporation Limited

Accounting for Management Decisions

Contents
Introduction.................................................................................................................................................3
Brief introduction of the organization Selected.......................................................................................3
History.................................................................................................................................................3
Structure..............................................................................................................................................3
Mission................................................................................................................................................3
Financial and other Performance Trends.............................................................................................4
Sustainability issues.............................................................................................................................4
Financial /Economic performance of Telstra Corporation...........................................................................4
Discussion on the financial performance of Telstra and its competitor during the last two years..........5
Profitability ratio of the company and its comparison with its competitor TPG Telecom.......................5
Operating Profit ratio:.........................................................................................................................7
Net Profit ratio:....................................................................................................................................7
Return on Assets:.................................................................................................................................7
Return on Equity:.................................................................................................................................7
Analysis of Financial performance with Cash Flow & Balance Sheet Statements....................................8
Social Performance....................................................................................................................................10
Human Capital Potential........................................................................................................................10
Society Wealth Creation Potential.........................................................................................................11
Environmental Performance.....................................................................................................................12
Environment Protection........................................................................................................................12
Energy & Carbon Emission Concerns.....................................................................................................13
Waste Production Concerns..................................................................................................................13
Conclusion.................................................................................................................................................14
References.................................................................................................................................................15

Introduction
The present report is developed for carrying out an analysis of the financial/economic,
social and environmental performance of an ASX listed entity. The evaluation of the selected
organizational performance is carried out by examination of its financial and sustainability
reports. The analysis is specially meant for proving suggestion to an investor seeking to invest in
a business entity that is carrying out its operations in a socially and environmentally responsible
manner. The company selected in this context is Telstra Corporation Limited, a
telecommunication giant within Australia listed on the stock exchange.
Brief introduction of the organization Selected
History
Telstra Corporation Limited is known to be the largest telecommunication company of
Australia. It has long history within Australia and is regarded to be originated together with the
Australia Post as Postmaster-General Department. Australia post is a public company involved in
providing postal services and the Postmaster-General Department that is a government owned
department involving in providing telegraphic and postal services. The company at preset has
become fully privatized and become more customer oriented under its CEO of David Thodey.
The changes incurred within the nature of the company as per the National Broadband Network.
Under the leadership of David Thodey, the company has made significant progress towards its
digitals services, retail store operations and health business unit (Telstra Corporation Limited,
2017).
Structure
The company is known to realize largest revenue across the telecommunication sector of
Australia. It has about 150 subsidiaries and is known to provide employment to about 37,000
people across the world. The company is known to provide wide type of telecommunication
products and services such as mobile telephones, internet, data services, network services and
entertainment products and services. The area served by the company includes Australia and at
international level.

Mission
The company vision is to become a world class technology company for empowering
people to connect and improve their quality of life. The company aims to achieve its vision by
development and expansion of its technology skills through developing the necessary capabilities
required for development of success business. The mission of the company is to achieve its
vision by acquiring and sustaining its competitiveness in the telecommunication sector by
developing positive customer, suppliers and employee engagement (Telstra Corporation Limited,
2017).
Financial and other Performance Trends
The total income of the company has increased by about 4.3% million in the year 2017
and provided $5.2 billion to its shareholders. The net profit after tax has increased up to 1.1 % in
the year 2017. The growth in the financial performance of the company in the year 2017 has
enabled it to pay about 15.5 per cents share dividend to its shareholders. The company has also
implemented a change in its dividend policy and reducing the payout ratio to 70-90 per cent of
its underlying earnings. The strong financial performance of the company is supported by the
continued growth in the customer segments in retail mobile, broadband and voice services
(Telstra Corporation: Annual Report, 2017).
Sustainability issues
The company is strongly committed to become a globally recognized brand by carrying
out its activities in a sustainable manner. It has adopted the use of technology for developing
environment solutions and helping its suppliers, customer and communities for addressing the
climate change (Telstra Sustainability Report, 2017).
Financial /Economic performance of Telstra Corporation
In order to evaluate the financial or economical impact of Telstra Corporation it is
important to give through overview of the company’s financial strength by analyzing its
profitability, market strength, position of assets and liabilities and any other significant factors
that impact the financial performance of the company (Joseph, 2013). In this section financial
strength of the Telstra for year 2017 and year 2016 has been evaluated and for this purpose
following financial information has been extracted from the annual report of Telstra.