MBA403 Financial and Economic Interpretation: Blackmores Analysis

This financial analysis report examines Blackmores Limited, an ASX-listed health supplement company. The report analyzes both financial and non-financial performance indicators, including revenue growth, net profit, and strategic priorities such as consumer connectedness and innovation. The analy...Read More

Running Head: Financial and Economic Interpretation and Communication
Financial and Economic Interpretation and Communication
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Financial and Economic Interpretation and Communication 1
The purpose of this essay is to explain the reader regarding the details about the company
Blackmores Limited that is an ASX listed company. The organization is listed on Australian
Stock and is present in the health supplement industry. The organization provides vitamins and
mineral supplements to the people present in Australia and other parts of the world. Further,
below mentioned essay highlight the details about the financial as well as non-financial
performance indicators of the company (WANG 2018). The company Blackmores work with the
purpose to improve the lives of people by providing the world’s best natural healthcare solutions.
The company focuses on using innovation and quality branded healthcare system in improving
the health and lifestyle of people. Four strategic priorities of Blackmores are implementing
consumer connectedness, innovation and expertise, global advantage and operational fitness.
Talking about the financial factors affecting the performance of the organization, it should be
noted that in the year 2018, the company delivered group revenue of $601 million that showed
9% growth as compared to 2017. The company earned net profit of $70 million that was 19%
higher than the previous year profits. This explained the increment in the growth and
productivity of the business functions of the company (Blackmores 2018).
Ratio 2018 2017 Ratio 2018 2017
Total Assets 412,174 464,850 Total Revenue 601,136 552,160
Total Liabilities 271,520 233,355 Gross Profit 101,612 86,231
Current Ratio 2.03 1.81 Debt 97053 90,799
Total Inventory 103,965 84,794 Net Assets 193,330 178,819
Cash Equivalent 36,448 34,251 Shareholder's Equity 192,875 177,541
$'000$'000
Further, analysing the core business areas, it should be noted that the company deals in providing
healthcare supplements to the people for improving their lifestyle and wellbeing. The company
was found in the year 1930 when the owner opened its first health food shop in Australia. The
company has diversified the scope of business in different parts of the world like China, Hong
Kong, Pakistan, Thailand and Singapore etc. However, the office of the organization is situated
in Queensland, Australia only (Sharma 2018).
Talking about the financial results of the company, it should be noted that they are improving
with a consistent speed. As more people are getting concerned towards their health, due to which
the scope of business and the target market of the organization. Also, the quality of the products

Financial and Economic Interpretation and Communication 2
is increasing the productivity of Blackmores in the business environment. The revenue of the
organization rose by 9%, EBIT by 18% ($102 million), EPS by 19% (406 cents) and DPS by
13% (305 cents). Further, it should be noted that the trend of growth of this organization could
be seen in the Australian health supplement industry as well. In Australia, more than 8.3 million
people have started using healthcare supplements on a regular basis. The growing population is
becoming more concerned towards their health and lifestyle due to which they have started using
supplements to support their body (Grimm, and Blazovich 2016). The only strategy that
identifies the organization from the crowd is its product quality and supply chain strategies. The
company make use of natural ingredients to produce goods in the environment while make use of
continuous supply chain activities to provide products to the people in the environment. The
proactive approach of the organization is to identify the risks and capabilities present in the
environment drive productivity through it.
Also, it should be noted that the organization hold great market potential to grow and become
more successful. The change in governmental rules and regulations affected the activities of the
company due to which they had to increase the brand loyalty and initiate transparency in the
environment so as to drive success for the business. So, it can be said that the governmental
regulations affected the growth of the company. The strength of the organization that helps them
to grow and benefit the future is the lead the change strategic activity. This activity helps the
organization to introduce new and innovation aspects in the product and the business functions
that help the management in increasing the scope of business. Lead the change activity helps in
innovation and researching about the market to drive sustainability in the environment
(Schroeder, Clark, and Cathey 2019).
According the remuneration report of the company, the LTIs are paid from the profits of the
company while the STIs are paid on the basis of completion of the target. The senior executive of
the company increased the FAR (Fixed Annual Remuneration) with the change and expansion in
the roles and responsibility of high earner. The company decided $950,000 of FAR, 100% of
which can be STI, and LTI can be calculated up to 150%. Talking about the wage trend present
in the environment, it should be noted that the company provide wages to the people on the basis
of the responsibilities given to them and the trends prevailing in the environment. It should be

Financial and Economic Interpretation and Communication 3
noted that the organization provides optimum revenue to their employees on the basis of work
done by them (DeFusco, et. al., 2015).
The company has developed a streamlined managerial and leadership process in the environment
so as to assist the functions of the company. The organizational structure of the company is
divided into two different segments on the basis of Australian and Asian region. Also, it should
be noted that centralized system has helped the organization to enhance productivity of the
business. This structure will help the organization in future to increase the decision making
capacity and initiate effective supervision as well (Williams, and Dobelman 2017). Also, there
are several non-wage related benefits provided to the employees in the business environment that
helps the managers to motivate them and increase the productivity for the business as well. The
company has increased the pay for the employees with the change in roles and responsibilities.
Increasing work pressure can be satisfied with more pay and additional benefits. Therefore, the
organization change the remuneration scheme to increase the satisfaction of employees in the
environment.

Financial and Economic Interpretation and Communication 4
References
Blackmores., (2018) Annual Report 2018. Blackmores.
DeFusco, R.A., McLeavey, D.W., Pinto, J.E., Runkle, D.E. and Anson, M.J., 2015. Quantitative
investment analysis. John Wiley & Sons.
Grimm, S.D. and Blazovich, J.L., 2016. Developing student competencies: An integrated
approach to a financial statement analysis project. Journal of Accounting Education, 35, pp.69-
101.
Schroeder, R.G., Clark, M.W. and Cathey, J.M., 2019. Financial accounting theory and
analysis: text and cases. John Wiley & Sons.
Sharma, K., 2018. Fair-Value Accounting and Financial Statement Analysis. AJMI-ASEAN
Journal of Management & Innovation, 5(2), pp.176-188.
WANG, Y.H., 2018. Analysis for Sales Revenue and Economic Index: CPI with Business
Statistics Methods. DEStech Transactions on Social Science, Education and Human Science,
(ermass).
Williams, E.E. and Dobelman, J.A., 2017. Financial statement analysis. World Scientific Book
Chapters, pp.109-169.