CSL Limited Financial Management: Trend, Ratio Analysis Report

This report provides a comprehensive financial analysis of CSL Limited from 2018 to 2021, focusing on key financial trends, ratio analysis, and sustainability factors. It includes an examination of sales and profit trends, financial stability, efficiency, and profitability ratios. The report also discusses non-financial aspects such as transaction management, risk management, culture, and growth activities. It elaborates on factors affecting CSL's financial performance, including leverage, growth, and company size, and interprets the financial ratios, highlighting the impact of COVID-19 on the company's financial stability. Furthermore, the report assesses CSL Limited's ethical performance, strengths, weaknesses, opportunities, and future scope, providing recommendations for improvement and strategic planning. This document is available on Desklib, a platform offering a wide range of study tools and solved assignments for students.

Financial Management

Contents
TASK...............................................................................................................................................1
Executive summary:.....................................................................................................................1
Key performance Indicator..........................................................................................................1
Interpretation and Insights...........................................................................................................4
Recommendation: .......................................................................................................................7
CONCLUSION ..........................................................................................................................7
REFERENCES................................................................................................................................9

TASK
Executive summary:
This report involves the complete financial data and information about the corporation or
organization that is known as CSL limited. It is Australian multinational organization that
develops, researches, manufactures the market product that helps in preventing from serious
human medical conditions. It is founded in 1916. It's headquarter is situated in Melbourne,
Australia. It is biotechnology company. The founder of CSL limited is Paul Perreault. This report
involves the all over complete financial data or information about the CSL limited for last four
years that are 2018 to 2021 (Budzinski, 2018). it also contains the trend analysis as well growth
of the organization. These can be estimated. The shareholder of the corporation can utilize this
evaluation as a guidance through which they can determine or decide whether they have to
finance their monetary value in that company or not because in past few years the business
enterprise had not done their work in the organization in appropriate manner due to facing the
losses by the shareholders. It is helpful in decision making and estimating the future assumption
effectively.
Key performance Indicator
1. Explain and present the key financial trends and results.
Trend Analysis
2018 2019 2020 2021
Profit
$ Change 804 452 453 48
% Change 56.31% 20.09% 16.67% 1.28%
Sales
$ Change 3444 1767 1676 186
% Change 51.49% 17.45% 14.08% 1.37%
1

A trend is ordinary course of a market or rate of assets. In technical examination,
devolution are examined with the help of trend lines or fee performances that visible or highlight
when the value or cost is creating efficient swing highs and better lows for the uptrend and
reduce swing lows and swing highs for downtrend (Chakrabarty and et al., 2018). In the
enterprise there are various kinds of trends that occurs such as production sales, profits and
revenue. In the provided data, there has been discussed about sales and profit trends.
Sales trends: It is a tool that is utilized to determine the result of revenue that examines the
market trends in a specific given time period. As per the above data, it has been shown that in the
annual year 2018 the organization has been sold more commodities in comparison of 2019, 2020,
2021. The business has geographic area so that the business enterprise will sell more products in
upcoming time and spread the company at global level. There are number of reasons or causes in
which the sales are reduced in remaining year in case of high growth rate and exponential growth
rate of customer segments.
Profit trend: It is the process of earnings that achieves by the company. If it enhanced that
means the income has maximized over the years and if it decreased that mean the profitability of
the company has been also reduced (Chris Kraft, and PMP, 2018). The business entity can
address the issues or problems that are related to the income and cost for the purpose of
evaluating the profit trend. In the above presented data the profit has been enhanced in the year
2021 in comparison of other years.
2.Calculation and presentation of financial ratios.
Ratio Analysis
Ratios Formulas 2018 2019 2020 2021
2

Financial stability
ratio
 Debt to equity
ratio
 Gearing ratio
Net debt /
Shareholder equity
Net debt / (Net
debt+ shareholder
equity)
1.01
0. 50
0.80
0.44
0.88
0.47
0.63
0.38
Efficiency ratio
 Inventory
turnover ratio
 Assets Turnover
ratio
COGS / Average
Inventory
Net Sales / Total
Assets
2.33
0.69
2.25
0.67
2.09
0.59
2.16
0.56
Profitability ratio
 Gross Profit
ratio
 Operating profit
ratio
Gross profit / Sales
*100
Operating profit /
Sales*100
54.27%
50.49%
54.60%
50.18%
56.01%
51.46%
55.55%
50.73%
Investment ratio
 Earning per
share
Total earning /
Outstanding shares.
4.93 5.92 6.91 7.00
3. Discussion of non-financial and sustainability sources.
3

 Transaction and project management – This approach is a repeatable and measurable
procedure. It contain each and every step of transaction. It starts from designing a
strategy of results-driven to submitting the report, evaluate and the recommendation.
Active management and comprehensive of transactions is a visible differentiation of
transaction and project management (Harber, Marx, and De Jager, 2020).
 Risk management- it is considered as non financial fcator. It aids the organization in
examining the risk and taking best decision to reducing the risk so that the business
enterprise can be able to maximize their profitability in large amount easily. With the
help of better and efficient risk management, the firm can focus on other matters and the
owner of the company are capable to prepare their effective strategy and they can easily
get or achieve their objectives and aims as well.
 Culture, people and engagement- This factor involves in non financial. The
organizations are capable to decide the taste and preferences of the human being in the
market with the help of this source and also the business firms are able to achieve or earn
the more profits from their operations.
 Key growth activities- The other factor of non financial is growth. If the enterprise
prepare their activities in appropriate and effective manner then the business has capacity
to reach or attain their objectives and aims without suffering any issues and problems
(Jannah, Handajani and Firmansyah, 2018).
Interpretation and Insights
1. Elaborate the reasons that affect the financial performance of the corporation:
 Leverage: It is a ratio that helps in finding the power of organization to meet with all
the business's liabilities with all over the assets and mortgage security. In general
words, the leverage ratio is created to compute the power of the firm to meet with
their long and short term financial ability. This ratio plays very essential part in
evaluating the corporation's finance (Johanson, Almqvist and Skoog, 2019). It is
helpful in providing the information regarding fund sources that utilized to finance
the activities of the corporation. They can used to finance from their debt or own
capital.
 Growth: If the high level of management of the company are able to take efficient
and appropriate decision for the purpose of maximizing the company's growth then
4

the business entity can achieve their growth easily. The shareholder can be anyone
such insider as well as outsider (Lee and Kim, 2020). They can assume the growth of
the organization. According to the view of the investors, the growth of the
corporation presents that it is profitable if the growth of the corporation is strong.
The investors want and expect the return on their investment.
 The organization's size: The size and scale of the company shows that there are
several distinguish in the operating risks of large and small enterprises. The size of
the corporation can be shown by the total assets, revenues, level of the sales and
average total assets (Menon, 2019). Generally, the size of the business is divided into
three categories such as large or big, small and intermediate. The personnel engaged
in organization activities, assets owned by the organization, total revenue attained by
the company are indicators that can be utilized to measure or evaluate the size of the
firm in a specific given time period.
2. Financial ratio's interpretation
after computing the financial ratio of the organization it can be analysed or observed that the
CSL limited is facing the problem regarding financial stability from the last four years. The main
impact of their profitability caused by the Covid 19 that hit the world. The operation of CSL
limited get affected then they start facing financial fluctuation. It can be evaluated by the
operating ratio of the years 2019 and 2020 (Mosteanu, 2019). in these year the operating ratios
are 50.18% and 51.46% so the 2019 profit is low than the 2018 and the profit of 2020 is high as
compared to 2018. The company will suffer several hurdles in running their day to day activities.
In the year of 2021 the CSL limited bounce back and carry the position of the financial in the
market. They achieved higher profit in 2021. The shareholders of the corporation bear the losses
as well because in 2018 and 2019 they have get low return because the EPS of 2018 and 2019
are $4.93 and $5.92 respectively. These were less in comparison of years 2020 and 2021. the
ratio of inventory and assets turnover has been decreasing since last years due to the improper
management of CSL limited.
3. Performance of ethical of CSL limited
 Public engagement and Code of conduct: This ethics used by the CSL group. The
owner of the company has to done their work effectively as per the code of conduct. So
the operational activities of the business can be done in appropriate and effective manner.
5

4. Identify the strength, weaknesses, opportunities and the threats of the organisation.
Measure the strategy of the company and overlook the rivalries plans.
Strengths of CSL limited
 Favourable cash flow: The cash inflow of organisation is more than the cash outflow
it will the companies to expand the operations or helps in the diversification of old as
well as new project.
 Company has prepared the comprehensive strategy that helps them to earn huge
amount of profit.
 The prime purpose of every organisation is maximise the revenue by increasing the
sales of the product and to give maximum satisfaction to customers.
 The historical data of the organisation is beneficial which denotes the goodwill of the
company.
Weakness of CSL limited
2. Company is not able to position itself in front of the competitors by using the present
models of businesses and confined to expand its product line (Rachidi and El Mohajir,
2021).
3. The demand of the good is not high in the economy and the product has higher cost
through which consumer is not prefer to pay more money for the goods
4. There is high labour turnover ratio in the organisation so company has to recruit new
staffs frequently and provides training to them that increases the cost of labour force.
Opportunities:
The development of the market has resulted in the variation of the benefits of the rivals
companies that makes the CSL limited more competitive as compared to other rivalries.
Strategy
The Common Wealth Serum laboratories uses the various tactics to research the elements,
creates the manufacturer and market the goods to prevent them any infections or medical
conditions.
5. Scope of CSL limited organisation for the future
The organisation considered both the monetary or non monetary aspects to measure the
performance. It analyse that how organisation is carry out their business operations and to
identify the areas for the improvement (Ramana and Muduli, 2019). It has been observed from
6

the above information company has positioned better in 2021 as against with the other years. The
business has planned the strategy that is suggested and the enterprises uses this tactics to
increase the revenue. Company has adopted the new technologies, methods, tools and new
innovation standards to modify the business process. They wants to be updated with the new
version and change the old methods (Tiron-Tudor and Deliu 2021). Enterprises wants to control
the cost and reduce the expenses on the administrative and the finance cost to increase the
income of the company. Organisation has shown the poor performance in the year 2019 and
organisation has not enough money to pay the debt obligations. Company has borrowed more
funds by issuing the shares or by taking long term debts. It has improved the actions of the
organisation in the year 2021.
The company has estimate the cash flow statement to know the position of inflow or out flow of
cash. It shows the how much cash earned or spend in the operation, investing or financing
activities. After evaluating all the ratios, trend analysis it is ensure that organisation has used the
optimum methods to earn the more profit.
Recommendation:
The organisation has make deep study of the ratio analysis, trend patterns, and key
indicators is considered to measure the actions of the company. It has seen that organisation has
suffered from the profit deficiency and scarcity of resources and several things. These kind of
problems hampers the growth of the company to run the businesses in effective and efficient
manner. Thus if CSL limited wants to attain the objectives then company has to build the
effective policies to bring out the better outcomes and results for the businesses. There are
several models or theories has developed such as BCG matrix, Ansoff's model, and the porter
generic theory. These models or theories has been used by the CSL limited to tackle with the
problems or unexpected situations. The CSL limited has an aim to achieve long term growth and
survival in the market and creates an image of the company. The business uses several financial
or non financial incentives to motivate the employees and it will boost them to increase the
productivity. It will increase the morale of the employees and it attract the investors or
shareholders to invest the money. Organisation has to sustain that their external debt should be
lower than the internal fund it helps to enjoy the benefit of the return on equity (Saona, Muro
and Alvarado, 2020).
7

CONCLUSION
It has been determined from the above report in the Covid19 time the CSL limited has not
execute their actions effectively through this company has suffered huge losses. The
management of the organisation has failed to operate its strategy and co front with the many
issues. The company has taken the data of the last four years to compare and evaluate the
performance with many years. Due to the pandemic and strategy has not worked in proper way
they have to cop up with the financial crises. The modification in the corporate life, balanced and
strategically faster performance has been supported by utilising the growth dimension. The key
sources may be a standard tool to check the progress and improves the businesses performance.
It is essential for the organisation to adapt itself in to the changing businesses environment so
that organisation can accomplish the needs of the consumers and increase the profit. The
organisation has to make the financial statements in proper manner so that the internal or
external users can read the financial statements. These financial statements helps to know the
position of the entity and to measure the financial health of the organisation. In this report there
is ratio analysis of the CSL limited to know the financial performance by evaluating the different
types of ratio such as profitability ratio, efficiency ratio, investment ratio and the solvency ratio.
The solvency ratio furnishes to know the long term debt obligations of the organisation which
denotes that company is able to manage its debts from the shareholders fund.
8

REFERENCES
Budzinski, O., 2018. Financial regulation as an anticompetitive institution. In The Palgrave
handbook on the economics of manipulation in sport (pp. 159-179). Palgrave
Macmillan, Cham.
Chakrabarty and et al., 2018. Management risk incentives and the readability of corporate
disclosures. Financial Management, 47(3), pp.583-616.
Chris Kraft, C.G.F.M. and PMP, P.A., 2018. Agile project management on government finance
projects. The Journal of Government Financial Management, 67(1), pp.12-18.
Harber, M., Marx, B. and De Jager, P., 2020. The perceived financial effects of mandatory audit
firm rotation. Journal of International Financial Management & Accounting, 31(2),
pp.215-234.
Jannah, R., Handajani, L. and Firmansyah, M., 2018. The influence of human resources, use of
information technology and public participation to the transparancy and accountability
of village financial management. International Journal of Scientific Research and
Management, 6(5), pp.373-385.
Johanson, U., Almqvist, R. and Skoog, M., 2019. A conceptual framework for integrated
performance management systems. Journal of Public Budgeting, Accounting &
Financial Management.
Lee, J.M., Lee, J. and Kim, K.T., 2020. Consumer financial well-being: Knowledge is not
enough. Journal of Family and Economic Issues, 41(2), pp.218-228.
Menon, P., 2019. Financial inclusion, banking the unbanked: Concepts, issues, and policies for
India. Journal of Public Affairs, 19(2), p.e1911.
Mosteanu, N.R., 2019. Intelligent tool to prevent Economic Crisis–Fractals. A possible solution
to assess the Management of Financial Risk. Calitatea, 20(172), pp.13-17.
Rachidi, H. and El Mohajir, M., 2021. Improving SMEs’ performance using innovative
knowledge and financial system designed from the Moroccan business
environment. African Journal of Science, Technology, Innovation and
Development, 13(1), pp.15-30.
Ramana, D.V. and Muduli, S., 2019. Measuring Financial Capability of the Street
Vendors. Available at SSRN 3433606.
9

Saona, P., Muro, L. and Alvarado, M., 2020. How do the ownership structure and board of
directors' features impact earnings management? The Spanish case. Journal of
International Financial Management & Accounting, 31(1), pp.98-133.
Tiron-Tudor, A. and Deliu, D., 2021. Big data’s disruptive effect on job profiles: management
accountants’ case study. Journal of Risk and Financial Management, 14(8), p.376.
Xu, X.L. and Chen, H.H., 2020. Exploring the relationships between environmental management
and financial sustainability in the energy industry: Linear and nonlinear effects. Energy
& Environment, 31(7), pp.1281-1300.
10