CSL Corporation Limited Financial Analysis Report (Essay Sample)

CSL Limited Financial Analysis
Student’s Name
University Affiliation
Executive Summary
Financial Analysis is tool that is used in financial and managerial accounting to evaluate the performance of a business by use of financial statements of the company. Financial reports analyze and customize various studies in financial management that help a business firm to make profound strategic, operational and transformational decisions. The primary objective of this report is to provide an analysis of the CSL Corporation to help an investor to make a profound decision regarding the performance of the Company. The report will endeavor to analyze CSL financial statements into financial ratios that can help to evaluate its performance with other companies in that fall on the same industry. Also, the financial statements will help in analyzing the business currently with its previous year performance.
Every organization’s primary goal is to maximize their revenue and output and be the top of its rivals. Therefore, determining the management performance of CSL will help us know whether the Corporation is maximizing its shareholder’s equity as well as its assets to generate value both in the long-run and shot run. CSL is a global organization that specializes in biopharmaceutical practices. The primary activities are researching, manufacturing, developing and marketing biotherapies in order to treat and prevent rare and serious medicinal problems. They produce effective biotherapies particularly rely for them to live especially those affected by cancer it is the leading organizations in Australia in healthcare industries. Based on the previous financial records it is performing considerably well and its revenues are kept constant.
Table of Contents
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Cover page  PAGEREF _Toc447883122 \h
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Executive Summary  PAGEREF _Toc447883123 \h
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1.0 Company Profile  PAGEREF _Toc447883124 \h
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1.2 Introduction  PAGEREF _Toc447883125 \h
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2.0 Financial Statements  PAGEREF _Toc447883126 \h
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2.1 Brief Introduction  PAGEREF _Toc447883127 \h
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2.2 Income Statements  PAGEREF _Toc447883128 \h
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2.3 Balance Sheet  PAGEREF _Toc447883129 \h
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2.5 Cash flows  PAGEREF _Toc447883130 \h
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3.0 Financial Ratios  PAGEREF _Toc447883131 \h
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3.1 Introduction  PAGEREF _Toc447883132 \h
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3.2 Liquidity Ratio  PAGEREF _Toc447883133 \h
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3.2.1 Current Ratio (CR)  PAGEREF _Toc447883134 \h
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3.2.2 Profit before Depreciation and Amortization to Current Liabilities (PADCL)  PAGEREF _Toc447883135 \h
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3.2.3 Operating Cash Flows to Current Liabilities (OCFCL) ratio  PAGEREF _Toc447883136 \h
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3.2.4 Cash Balance to Total Liabilities (CBTL)  PAGEREF _Toc447883137 \h
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3.3 Leverage Ratios  PAGEREF _Toc447883138 \h
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3.3.1 Debt to Liquidity Ratio  PAGEREF _Toc447883139 \h
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3.3.2 Total liabilities to total tangible assets (TLTAI)  PAGEREF _Toc447883140 \h
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3.3.3 Interest Cover Ratio  PAGEREF _Toc447883141 \h
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3.4 Profitability Ratios  PAGEREF _Toc447883142 \h
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3.4.1 Earnings per Share (EPS)  PAGEREF _Toc447883143 \h
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3.4.2 Gross Profit Margin  PAGEREF _Toc447883144 \h
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3.4.3 Net Profit Margin  PAGEREF _Toc447883145 \h
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3.4.5 Return on Assets (ROA)  PAGEREF _Toc447883146 \h
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3.4.6 Return on equity Ratio (ROE)  PAGEREF _Toc447883147 \h
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4.0 Competitors and Industrial Analysis  PAGEREF _Toc447883148 \h
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5.0 Conclusion  PAGEREF _Toc447883149 \h
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6.0 Appendix  PAGEREF _Toc447883150 \h
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6.1 CSL Income Statement  PAGEREF _Toc447883151 \h
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6.2 CSL Balance Sheet as at the year Ended June 2015  PAGEREF _Toc447883153 \h
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6.3 CSL Statement of Cash Flows  PAGEREF _Toc447883154 \h
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6.4 CSL Competitors Analysis  PAGEREF _Toc447883155 \h
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7.0 References  PAGEREF _Toc447883156 \h
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1.0 Company Profile
CSL is a global organization that specializes in biopharmaceutical practices. The primary activities are researching, manufacturing, developing and marketing biotherapies in order to treat and prevent rare and serious medicinal problems. They produce effective biotherapies particularly rely for them to live especially those affected by cancer. The primary objective of the company is to enable many people around the world to lead a normal health life (Worthington, 2011). CSL is approximated to have more than 13000 workers in twenty seven countries globally. The main headquarters is in Australia and other subsequent substations are located in US, Switzerland and Germany. It closes its financial year on June, and also it a member of ASX companies in Australia.
1.2 Introduction
Financial analysis is a crucial tool used in financial and managerial accounting to evaluate the performance of a business by use of financial statements of the company. Financial reports analyze and customize various studies in financial management that help a business firm to make profound strategic, operational and transformational decisions. CSL financial analysis with will be based on already calculated balance sheet, income statement, cash flows, financial rations and competitors & Industrial analysis (Aitke & Frino, 2010). Financial analysis has been an important item in assessing the performance and growth of a business. The methods involved in determining whether it is a performing firm are true accounting ratios, theory of financial analysis and competitive analysis. Fundamental financial analysis is concerned at analyzing and evaluating various departmental progresses by calculating various financial ratios extracted from financial statements. Investors and shareholders value are determined via financial analysis approach. It provides empirical data that helps the investor to make a robust and solid decision concerning the business or an institution like a healthcare organization (Rosa et al, 2014). Various people may value technical and qualitative approach to know the financial position for a business and they do not mind about the time taken to analyze a business this way but for investors they want to make a decision as quick as possible to take this opportunity as it occurs. Therefore, they take financial model for analyzing the financial position of a business.2.0
Financial Statements
2.1 Brief Introduction
Financial statements are those reports that are produced at the end of a financial period. They are mainly three items income statements, balance sheet and cash flows. The three items correlate to each other in order to determine the financial position of CSL Corporation.
2.2 Income Statements
The net profit after the tax deducted its portion was US$1379 million cash of the year ended 2014-2015 on June. Based on the previous net profit reported, it is evident that the company has been making progress. The net profit for the year ended 2012-2013 was $1216, and 2013-2014 was $1307. That indicates that the firm has been on the rise with its net profit indicating that it has been making a lot of progress. Additionally, the net profit on a constant present basis was $1412 million (Jones & Higgins, 2006). However, the half year financial report forecasted that next year revenues would increase due to the increase in sales by 7%, making the earnings before tax to grow by 7% and cash flows from operations was $656 million which was an increase by 28% compared from the last year period (Alexander 2010). That reflects that there was a growth of earnings per share by 10%. The revenue realized forecasts that the value of CSL has been continuing to grow over the past years, and it is probably that the future economic benefits will grow (Anken et al., 2015). The revenues from 2012-2013 were $5130 and they have been mounting each financial year since 2013-2014 they were $5524 and in 2014-2015 they grew to $5628 million. The dividend price has also been on the rise indicating that the company has been making progress for the last three financial years as in 2012-2013, 2013-2014, and 2014-2015 were 1.020, 1.130, and 1.240 respectively.
2.3 Balance Sheet
CSL has a solid and sustained balance sheet which has been maintained over the years. It closed its 2014-2015 financial balance sheet book by a total equity of $2746.9 a decrease from the 2013-2014 financial year that was $3162, which was a rise from 2012-2013 that was $3006.8 The company’s total liabilities has also been on the rise as indicated by the balance sheet as from 2012-2013, 2013-14, and 2014-15 which was 2968.7, 3115.7, and 3654.1 respectively. That means that it had a huge loan in that made the shareholders income to be reduced...