TOM & RAHUL FINANCIALS PTY LTD Telstra Introduction Telstra Corporation Limited (known as Telstra) is Australia's biggest and leading telecommunications and media organization operating since 1901, which creates and runs telecommunications systems and markets voice, mobile, web access, pay TV and other entertainment items and administrations. In Australia Telstra provide 16.9 million mobile services, 7.2 million fixed voice services and 3.3 million retail fixed broadband services and that’s why we have an global existence covering 22 countries, including China. Telstra has a long history in Australia, starting together with Australia Post as an administration division, the Postmaster-General's Department. Telstra is now completely privatized …show more content…
In a nutshell, ROA is ROE when we add up financial leverage to the mix in a firm’s capital structure. The DuPont identity, a popular formula for dividing ROE into its core components, best explains the relationship between both measures of organization’s …show more content…
In 2014 however Telstra had $1.16 in current assets for every $1 in current liabilities. Both of these ratio indicate that Telstra is not trying to amend their gearing ratios they are in fact taking on more debt so they will be able to invest it back into the company and turn any resulting reward into revenue. In 2014 Telstra’s Statement of financial position stated that they had total borrowings of 13,547,000 which is down from the 2015 borrowings of 14,138,000. These numbers mean that Telstra took on more debt in the 2015 perhaps to pay more liabilities, to invest in a research and development or purchase new property, plant or equipment. Telstra’s Directors Report stated the Telstra did issue an off market share buyback of 217,418,521 shares which represents 1.75% of their issued capital. These shares were purchased off market and cancelled. The Shares were bought back at a discounted price, the market share price was $5.34 (This is a volume weighted average price of Telstra ordinary shares over the five trading days leading up to and including 3 October 2014 with the shares being purchased on 6 October