Financial Data Measurement - Case Study Assessment Answer

Assignment -2
The Project required to use the financial data of any corporate to measure the method or the basis for allocation of resources, here in this project as a part of requirement we have use the financial data of Telstra Corporation, to meet the requirement.
Situation -1
Income statement of Telstra
TELSTRA CORP LTD (TLS) CashFlowFlag INCOME STATEMENT
Fiscal year ends in June. AUD in millions except per share data. 2016-06 2017-06 2018-06
Revenue 25834 25912 25667
Cost of revenue 7247 10958 12309
Gross profit 18587 14954 13358
Operating expenses
Research and development
Sales, General and administrative 6974 8100 7628
Other operating expenses 4503 4787 6415
Total operating expenses 11477 12887 14043
Operating income 7110 2067 -685
Interest Expense 796 729 631
Other income (expense) -714 4309 6418
Income before taxes 5600 5647 5102
Provision for income taxes 1768 1773 1573
Net income from continuing operations 3832 3874 3529
Net income from discontinuing ops 2017
Other -69 17 34
Net income 5780 3891 3563
Net income available to common shareholders 5780 3891 3563
Earnings per share
Basic 0.47 0.33 0.3
Diluted 0.47 0.33 0.3
Weighted average shares outstanding
Basic 12202 11968 11877
Diluted 12215 11968 11877
EBITDA 10551 10817 10203
TELSTRA CORP LTD (TLS) CashFlowFlag BALANCE SHEET
Fiscal year ends in June. AUD in millions except per share data. 2016-06 2017-06 2018-06
Assets
Current assets
Cash
Cash and cash equivalents 3550 938 629
Total cash 3550 938 629
Receivables 3343 3635 3146
Inventories 557 893 801
Deferred income taxes 8 11 6
Prepaid expenses 426 531 548
Other current assets 1456 1854 1947
Total current assets 9340 7862 7077
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 64960 64312 64949
Accumulated Depreciation -44379 -42962 -42841
Net property, plant and equipment 20581 21350 22108
Equity and other investments 565 486 1273
Goodwill 1346 1269 1049
Intangible assets 7883 8289 8131
Deferred income taxes 54 44 54
Prepaid pension benefit 15 142 250
Other long-term assets 3502 2691 2928
Total non-current assets 33946 34271 35793
Total assets 43286 42133 42870
Liabilities and stockholders equity
Liabilities
Current liabilities
Short-term debt 2537 2369 1544
Capital leases 118 107 91
Accounts payable 1465 1185 1588
Deferred income taxes 176 161 132
Deferred revenues 1118 1236 1227
Other current liabilities 3774 4101 4234
Total current liabilities 9188 9159 8816
Non-current liabilities
Long-term debt 14378 14574 15042
Capital leases 269 234 274
Deferred taxes liabilities 1493 1539 1624
Deferred revenues 1022 1161 1312
Pensions and other benefits 173 166 164
Minority interest 36 19 -13
Other long-term liabilities 856 740 624
Total non-current liabilities 18227 18433 19027
Total liabilities 27415 27592 27843
Stockholders equity
Common stock 5167 4421 4428
Other Equity -95 -147 -218
Retained earnings 10642 10225 10716
Accumulated other comprehensive income 157 42 101
Total stockholders equity 15871 14541 15027
Total liabilities and stockholders equity 43286 42133 42870

The above stated tables show the revenue statement and statement of assets and liability at the end of financial year during last 3 year, we are using this information for further budget planning
From income statement we can get a budgeted information for sales and variation in sales each year. the sales of Telstra is varied year after year, the sales of 2016 was 25834, this amount were increase by 78 during 2017 and again this profit is reduced by 245, in such types of situation we can predict that the sales of next year may be increase by 2 , here we are making this predication based on the growth of industry and favourable industrial opinion of the regulatory and the state government, here we are projecting the budgeted sales for next financial year would be 2 higher than the sales of 2018. Further cost of goods sold are the major expenses hence we are predicating the Cost of goods sold shall nearly to 45 to 48 percentage of sales. The cost of goods sold mainly cover the direct material, direct labour and direct overhead, where the proportion of direct material, labour and overheads are 40 40 20. While the total of operating expenses of Telstra was 54 percentage of sales during 2016, 2017, 2018 years. Here we are allocating our resource for the operating activities, at the rate of 54 of projected sales, where the major expenses for operating activities are selling, administrative and other general expenses, and rest are the general operating expense, so the total operating expenses are bifurcated between the operating and non-operating activities in the proportion of 11 Telstra.com.au. (2019).
Now the second statement is the Telstra Co is a balance sheet, this statement show the total of assets and liability and shows the wealth of firm. The total asset of the Telstra Corporation is divided between the current assets and fixed assets, the current assets basically consisting of cash and cash equivalent amounts, where the total preposition of current asset is 17 percentage of total and the fixed assets are 83 percentage, so we are projecting the allocation of resource for the upcoming year accordingly, we are using the cash and cash equivalent is equal to 20 percentage of available resource and rest shall be a part of the fixed assets. While the liabilities and obligation of the firm are divided into the three heading, current liability, long term liability and the owners capital. We are projecting the proportion for current liability and long term liability in preposition of 20 40 and rest would be the owner capital.
Situation -2

During the initial phase of this report we have projected that our sales would be increase by 2 percentage than the sale of 2018. Now to meet this requirement the management and sales team of Telstra have decided to invest more amount for sales and promoting activities, we have decided to increase the sales budget by nearly 20 percentage than what it was in last financial year. Moreover we are also trying to improve our facilities hence we are upgrading our machineries and we are investing more amount in plans and machineries, we are planning to make more investment in fixed assets, total projected investment in fixed assets is 250000, this will improve our facilities (Host Analytics (2019). these additional outflow is adjusted from the accumulated past earning, free reserve accounts.
The additional projected expenses for the promotion and marketing activities are 10000 for next income year, this amounts are invested our period of time, this amount is adjusted from the sales revenue and the free reserve available during last years. Further to meet the additional operating cost for the new machinery and plant we are allocating the action fund of 12000, this amount cover the labour and operating cost of new machinery. The additional investment will result into increase in sales of 2 for next year and this growth rate will be maintain for upcoming future years, Telstra.com.au (2019)
Situation -3
Overview of TELSTRA Corporation policies and consideration of various aspect which we need to consider while formulating the budget.
The corporate works in vary systematic and professional way, corporate formulate the budget after considering the performance report of each department, and takes an opinion and consent of the department heads. Further the expansion and diversification plan is executed with the consent of board member as required under the corporation laws. the raw project is formulated by the financial manager based on the vision and mission statement, this raw budget is initially communicated to each department, the head of each department consider the reports and place their opinion in the board meeting held after the initial communication of report, this process generate an accurate result of formulation of budget and allocation of resources.
While formulating a budget, our initially we are required to formulate the raw budgeted statement, which are communicated to head of each department, afterward the meeting of members and managerial person are called for the reviewing and analysis of the project, this will give us the batter way for resource allocation and effective projection of inflow and outflow of funds and resources.

References
Host Analytics. (2019). what is a Budgeting Plan Host Analytics. Available at https//hostanalytics.com/blog/what-is-budgeting-vs-planning-definition/ Accessed 13 Mar. 2019.
Telstra.com.au. (2019). Available at https//www.telstra.com.au/content/dam/tcom/about-us/investors/pdf20C/operating-financial-review03fy.pdf Accessed 13 Mar. 2019.
Telstra.com.au. (2019). Available at https//www.telstra.com.au/content/dam/tcom/about-us/investors/pdf20C/fin-statements.pdf Accessed 13 Mar. 2019.
Telstra.com.au. (2019). Telstra - Annual reports - Investors. Available at https//www.telstra.com.au/aboutus/investors/financial-information/reports Accessed 13 Mar. 2019.