Telstra Corporation’s Profitability and Liquidity

An assessment of the Telstra federations profit powerfulness, and short and long-term Liquidity.\n\n1.Introduction\n\nAll connection accounts argon prep ard in compliance with the various accounting laws and regulations, and are designed for a astray audience. Therefore, to obtain data for particular(prenominal) purposes it is frequently necessary to strike the numbers to specific analysis. spare-time activity is an analysis of the Telstra mickles course 2000 and 2001 monetary statements. This analysis is intended to, finished the calculation of ratios, assess the short and long-term liquidity, in sum to the profitability of the Telstra Corporation.\n\n2. short Liquidity\n\nShort-term liquidity is the ability of the company to meet its short-term monetary commitments. Short-term liquidity ratios measuring stick the relationship between catamenia liabilities and current assets. This helps us whole tone the Telstra Corporations ability to sell inventory, to learn re ceivables and to pay current liabilities. pursuit is the Current Ratio, the quickly summation Ratio, the Stock Turnover sum up and the Debtors Turnover Rate. These measures are turn upon the current assets and current liabilities to asses the Telstra Corporations ability to meet their monetary commitments as they become due.\n\n2.1Current Ratio\n\nFor the 2001 financial year, the Telstra Corporation had $m6253 in positive current assets and $m9279 in extreme current liabilities. This gives the company $0.68 for forever dollar sign of current liabilities. This could be seen as an unsafe situation, only if by looking into the 2000 financial year Statement of financial Position, it can be discovered that the company had $0.52 for ever dollar of current liabilities. That is $m4889 in keep down current assets and $m9421 in jibe current liabilities. This shows that the Telstra Corporation increase its ability to pay debts as they became due by $0.16. (The Telstra Corporati on Limited, 2001)\n\n2.2Quick Asset Ratio\n\nThe Quick Asset Test is a stringent raise that indicates if a firm has enough short-term assets, without selling inventory, to cover its spry liabilities. It is similar but a more strenuous sport of the Current Ratio or Working Capital, indicating whether the companys liabilities could be paid without selling inventory.\n\nvictimization the same figures as preceding(prenominal) minus the inventories for both old age gives the Telstra Corporation an acid test ratio of 0.64:1 for the 2001 financial year and 0.40:1 for the 2000 financial year. These value are derived from subtracting the inventories of $m320 and $m295 for the 2001 and 2000 financial old age respectively.\n\nThis ratio shows a rest of $0.24 between the financial long time of 2001 and 2000, again...If you want to get a full essay, order it on our website:

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