Detailed Financial Report Analysis of Sirtex Medical Ltd's Financials

This report offers a detailed financial analysis of Sirtex Medical Ltd, focusing on its financial report. The analysis begins with an overview of the company and then delves into the specifics of its equities, including issued capital, reserves, and retained earnings. The report examines the company's income tax expenditure, comparing figures from 2015 and 2016, and discusses the income tax rate and structure. It explores deferred tax assets and liabilities, current tax assets and liabilities, and the differences in income tax paid. The analysis also covers the company's tax structure, including the corporate tax rate, and concludes with a summary of the key findings, highlighting the company's financial performance and tax-related practices. The report references the company's financial statements to support its analysis.

Running head: FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
Name of the Student:
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Author’s Note:

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
Executive Summary
The report analyzes the financial report of Sirtex Medical ltd and discuss the tax area and tax
structure from the report. The report will be analyzing the various kinds of equity which the
business has and which is shown in the balance sheet. The report will be considering the changes
in the figures of equity. The report will analyzing the tax treatments and tax expenses of the
company with respect to previous year figures. The report will be concluding with a detail
analysis of the tax structure of Sirtex Medical ltd.

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
i. Equities of Sirtex Medical Limited.......................................................................................3
ii. Income Tax Expenditure of Sirtex Medical Ltd...................................................................4
iii. Income Tax Rate and Structure............................................................................................5
iv. Deferred tax assets and liabilities of Sirtex Medical ltd.......................................................5
v. Tax assets and Tax Liabilities...............................................................................................6
vi. Difference in Income tax paid..............................................................................................6
vii. Understanding the tax structure........................................................................................7
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
Introduction
The preparation and presentation of the financial report of companies is known as
corporate accounting. The financial reports are made up of various statements such as directors
report, statement of profit and loss account, balance sheet and cash flow statements. These
reports reflect the financial performance of the company and also describes the financial
objectives of the company (Crawford et al. 2012). The preparation of the financial reports also
follow certain rules, principles and also certain standards.
Overview of the Company
Sirtex Medical Limited is an Australian company which is engaged in providing medical
treatment to the society. The company specializes in radioactive treatment for inoperable liver
cancer. The company was established in 1997 with its headquarter situated in Australia and the
company mostly operates in Australia (Sirtex.com, 2018). The company also provides other kind
of treatments of other types of cancer.
Discussion
i. Equities of Sirtex Medical Limited
The different types of stocks which are present in the financial report of Sirtex Medical Limited
are given below in details:
1. Issued Capital: This refers to the number of shares issued by the company for collecting
funds from the public which is also know as share capital (Bolton and Samama 2012.).
The issued portion of this total shares is known as issued capital. The issued capital of
Sirtex Medical Limited is about $32684000 in 2016 which is more than the previous year
figure of issued capital of $27021000 (Sirtex.com, 2018). This increase in the issued

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
capital of the company is because the company has made a fresh issue of shares in 2016.
In 2015 the number of shares issued to the public was 56,530,231 and this increased to
57273893 in 2016 which shows that the company has issued new shares during the year.
2. Reserves: This refers to the part of profit which the company keeps for a certain purpose
which may be anything. There are specific reserves which has to be utilized for the
purpose it was created and there is free reserves which the company can do anything
withy this type of reserve (Avery and Kwast 2017). The balance sheet shows a reserve of
$6656000 in 2016 which is much more than what was in 2015 that is $5615000. As per
the notes to accounts the reserve figure is made up of share right reserve and foreign
currency translation reserve.
3. Retained Earnings: This is also a part of the profit which is kept in the business for either
reinvestment or distribution among shareholders as dividends purposes. The retained
earning has also increased from previous year which is showing $154164000 in 2016.
ii. Income Tax Expenditure of Sirtex Medical Ltd
The income tax expenses for the year 2016 is shown at $16416000 which is more than
the previous year tax expense figure which was $12423000 in 2015 (Sirtex.com, 2018). All the
rules and regulations of tax laws prevailing in Australia are followed by the company. The
components of the income tax expenses as shown in the notes of accounts are current tax which
is to be paid, deferred tax and provisions which are related to previous years (Lee 2017). The
reason for the increased level of increase income tax is that the current tax expenses of 2016 is
$14671000 which is more than previous year’s tax figure of $8587000 in 2015 (Sirtex.com,
2018). However the deferred tax has reduced from the previous years figure. The provisions of
2015 show a positive figure whereas the provision of 2016 show a negative figure.

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
iii. Income Tax Rate and Structure
The change in current income tax is due to the profit which the company has earned or adjusted
from the net profit before tax. The tax which is followed by the company is either enacted from
earlier or recently enacted till the reporting date. The weighted average tax rate which is shown
by the company in the notes to account state the rate is 23.5%. Deferred tax is calculated from
the balance sheet using the liability method. The deferred tax is to charged at the rate when the
ssets or liabilities are realized. The company and its subsidiaries have formed an income tax
consolidation group. The company also have foreign currency translation of tax balance. The
company charges taxes at the corporate tax rate at the rate of 30%. The company’s income tax is
calculated on the basis of the corporate tax rate which is charged on the net income of the
company after the various adjustments are made from the income. The figures which are
adjusted with the income tax of the company are non detuctible amortization and expenses and
income, lower rate of tax rates in the overseas market, effect of foreign currency translation of
tax balance, recognition of previous tax losses which was not recognized by the company earlier
and effects of tax consolidation groups are also to be removed from the gross tax figure in order
to get the net tax figure which is attributable to the company for the current year 2016.
iv. Deferred tax assets and liabilities of Sirtex Medical ltd
The company has a deferred tax asset which is shown at $7795000 in 2016 and the same
figure is shown at lesser amount in 2015 which is $5085000. The company also has a deferred
tax liability of $24722000 in 2016 which is comparatively less than the figure of deferred tax
liability which is shown in 2015 which is $20034000 (Sirtex.com, 2018). The deferred tax asset
item includes tax losses, timing differences relating to fixed assets, employee provisions,
unrealized foreign exchange losses and also some other components as well. The deferred tax

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
liabilities consists of components such as timing differences which are related to capitalization of
development expenditure, fixed assets and other components as well. These deferred tax assets
and deferred tax liabilities are recorded in order to identify such components which makers up
the deferred tax assets and liabilities. The users of the financial statements would be able to
understand the different components of taxes which the company is required to pay and represent
in the financial report.
v. Tax assets and Tax Liabilities
The company does have any current tax assets as the financial reports of the company
shows none in both the years that is 2015 and 2016. However the company has a current tax
liability which is shown at $7239000 in 2016 and the same is shown at $4746000 in 2015. The
figure of income tax expense as shown in the statement of profit and loss account shows
$16416000 and the current tax asset figure for the current year show a figure of $7239000. The
figure of current tax liability may contain outstanding tax which the company needs to pay to the
government. It comes in the liability side of the balance sheet whereas the income tax expense
only relates to the current year expenses which the company must pay in full. Any outstanding
part will then come under the current tax liability of the company.
vi. Difference in Income tax paid
The income tax which the company needs to pay is shown in the statement of profit and
loss account which is $16416000. The company has paid off $8134000 in the current year. the
difference which occurs between the income tax expense and income tax actually paid may be
due to the difference in payment criteria of the company. the company as per the income tax
liability has paid off almost half of the liability. This shows that the company may be following
half yearly payment systems which requires income tax payments to be made in two half or

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
installments (Reynolds and Smolensky 2013). For the meantime the amount of income tax
expenses which is not paid by the company will be treated as a current tax liability until the tax
expenses liability is not cleared.
vii. Understanding the tax structure
As per the analysis of the financial reports of Sirtex Medical ltd, the company follows
corporate tax rate of 30% and has an effective weighted average tax rate of 23.5%. The company
has an income tax expense of about $16416000 out of which half of the tax is paid by the
company in the current year 2016 and the rest will be paid in a half year time which has been
assumed. The company has a current tax liability but has no current tax assets. The company has
both deferred tax assets and liabilities which is shown in the balance sheet which reflect certain
timing differences in the tax treatments. The company has clearly reported all aspects in the
balance sheet which could be of any use to the users.
Conclusion
The company Sirtex Medical ltd as per the above analysis has clearly mentioned and
pointed out all the aspects of tax which the company has recorded in the financial statement. The
balance sheet shows that the company tax expenditure is made up of current tax liability of the
company as well as the deferred tax which the company can either use to set off or set on.

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FINANCIAL REPORT ANALYSIS OF SIRTEX MEDICAL LTD
Reference
Avery, R. and Kwast, M., 2017. Money and Interest Rates under a Reserves Operating
Target. Evolution, 5, p.17.
Bolton, P. and Samama, F., 2012. Capital access bonds: contingent capital with an option to
convert. Economic Policy, 27(70), pp.275-317.
Crawford, L., Crawford, L., Extance, H., Helliar, C. and Power, D., 2012. Operating segments:
The usefulness of IFRS 8. ICAS.
Lee, D., 2017. Impact of the Medical Device Tax on Firm R&D and Performance: Evidence
from the Affordable Care Act.
Reynolds, M. and Smolensky, E., 2013. Public expenditures, taxes, and the distribution of
income: The United States, 1950, 1961, 1970. Academic Press.
Sirtex.com. (2018). Sirtex - US. [online] Available at: https://www.sirtex.com [Accessed 24 Jan.
2018].