ACCT2005: Annual Report Analysis and Interpretation of Bega & Telstra

This report presents an analysis and interpretation of the annual reports of Bega Cheese and Telstra. The introduction highlights the importance of report analysis for strategic decision-making, organizational health assessment, and financial comparisons. The report provides an overview of Bega Cheese, including its history, key strategies (acquisitions, product diversification, packaging improvements, supply chain management, and sustainability programs), distribution, quality assurance, and corporate governance. It details the company's accounting policies regarding capital, inventories, financial statement preparation (AASB, IFRS), consolidation, revenue recognition, trade receivables, inventories valuation, property, plant, and equipment, goodwill, and provisions. Financial ratios are provided for Bega Cheese, including profitability, liquidity, turnover, and leverage. The report also outlines Telstra's strategic changes, including investments in network improvement, traffic reduction, and the launch of the Telstra Smart Modem, as well as its strategic pillars (simplification, infrastructure establishment, working structure simplification, cost reduction, and portfolio management). A comparison of Bega Cheese and Telstra covers their missions, visions, and corporate governance and sustainability commitments. The conclusion summarizes that both companies employ various strategies, policies, and frameworks detailed in their annual reports, with Telstra needing to focus on loans and Bega needing to focus on profitability.

ANNUAL REPORT
ANALYSIS AND
INTERPRETATION

INTRODUCTION
Analysis and interpretation of reports is
fundamental for every organisation. It helps in:
• Strategic corporate decision making.
• Increasing long term gains.
• Assessment of organisational health.
• Financial comparison.

BEGA CHEESE
• Bega Cheese Ltd. is an Australian
company that is specialised in the
production of cheese and dairy products.
• It was first established in the year 1899 as
a creamery company.
• It produces and distributes high quality
cheese products all over the world.

KEY STRATEGIES
• Bega Cheese has done several acquisitions.
• It has started offering more products because of such
acquisitions.
• It made significant efforts in improvement of packaging.
• Efforts have been given to improve the supply chain
management.
• Company is aligning itself with several sustainable and
social responsibility programs.

KEY STRATEGIES
• Distribution is spreading world wide.
• Quality assurance program has been developed.
• The Board has also adopted corporate
governance policies that enhance the value of the
organisation.
• The corporate governance complies with the ASX
Recommendations.

ACCOUNTING POLICIES
• Capital is raised through purchase of Share
Purchase Plan.
• Inventories were treated at fair values
including margin.
• The financial statements are prepared by
following the AASB, Australian Accounting
Standards and the Corporations Act 2001.
• There is compliance with IFRS and IASB.
• Historical cost concept has been followed.

ACCOUNTING POLICIES
• Acquisition method of accounting is used in case
of subsidiaries consolidation.
• The consolidated statement is presented in
Australian dollars.
• Revenues are measured at fair value of the
consideration that is received or will be received
in the future.
• Government grants are recognised at fair values.

ACCOUNTING POLICIES
• Trade receivables are initially recognized at fair value and then
measured at amortised costs. The settlement period is usually 30
days.
• Inventories are valued at lower of the cost and net realisable
value.
• Property, plant and equipment are stated at historical cost less
depreciation.
• Goodwill is not amortised but is tested for impairment annually.
• Provisions are valued at present value.

BEGA PROFITABILITY
Gross Profit Margin Operating Profit Margin Net Profit Margin
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2018
2017

BEGA LIQUIDITY
Current Ratio Quick Ratio Cash Ratio
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2018
2017

BEGA TURNOVER
Receivable Turnover Inventory Turnover Net working capital Turnover
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
2018
2017

BEGA LEVERAGE
Debt Ratio Debt to Equity Ratio
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
2018
2017