Telstra Corporation’s Profitability and Liquidity

An sagacity of the Telstra sights profit business leader, and short and long-term liquid.\n\n1.Introduction\n\nAll alliance accounts ar prepared in accordance with the various news report laws and regulations, and are designed for a wide audience. Therefore, to obtain info for circumstantial purposes it is frequently inevitable to submit the numbers to specific analysis. Following is an analysis of the Telstra Corporations twelvemonth 2000 and 2001 pecuniary statements. This analysis is think to, through the calculation of ratios, prize the short-term and long-term liquidness, in addition to the profitability of the Telstra Corporation.\n\n2.Short-term Liquidity\n\nShort-term liquidity is the ability of the connection to meet its short-term financial commitments. Short-term liquidity ratios measure the relationship amongst flow liabilities and la exam assets. This helps us measure the Telstra Corporations ability to sell inventory, to collect receivables and to relent genuine liabilities. Following is the Current balance, the quick Asset proportion, the Stock upset Rate and the Debtors Turnover Rate. These measures are concentrated upon the current assets and current liabilities to asses the Telstra Corporations ability to meet their financial commitments as they become due.\n\n2.1Current dimension\n\nFor the 2001 financial year, the Telstra Corporation had $m6253 in total current assets and $m9279 in total current liabilities. This gives the company $0.68 for constantly dollar of current liabilities. This could be seen as an insecure situation, provided by looking at into the 2000 financial year educational activity of Financial Position, it can be ascertained that the company had $0.52 for ever dollar of current liabilities. That is $m4889 in total current assets and $m9421 in total current liabilities. This shows that the Telstra Corporation increased its ability to pay debts as they became due by $0.16. (The Telstra Corporat ion Limited, 2001)\n\n2.2Quick Asset Ratio\n\nThe Quick Asset interrogation is a stringent test that indicates if a firm has generous short-term assets, without merchandising inventory, to embrace its immediate liabilities. It is similar but a more straining version of the Current Ratio or Working nifty, indicating whether the companys liabilities could be paid without selling inventory.\n\nUsing the same figures as above minus the inventories for twain years gives the Telstra Corporation an sultry test ratio of 0.64:1 for the 2001 financial year and 0.40:1 for the 2000 financial year. These values are derived from subtracting the inventories of $m320 and $m295 for the 2001 and 2000 financial years respectively.\n\nThis ratio shows a difference of $0.24 between the financial years of 2001 and 2000, again...If you want to drive a full essay, parade it on our website:

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