Seven West Media Limited: Company Financial Analysis essay sample

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Seven West Media Limited: Company Financial


The objective of financial statement analysis is to examine the available financial data for a specific company or business in order to estimate the financial performance of the company and to determine possible risks and perspectives.

Financial statements are usually considered as sources of valuable information on trends and relationships to understand potential strength and weaknesses of the company, and to determine the quality of revenues. Financial analysis always starts from establishing its primary objective, required for the appropriate selection of tools.

For instance, a basis for analysis could be either granting a creditor making an investment, which will require the different approach for analysis. In general, to conduct an efficient financial analysis, a person must be familiar with relevant business practices, understand the nature of accounting principles and limitations, acquainted with appropriate terminology and aware of the nature of financial tools. Tools involve financial ratios such as liquidity, profitability, activity or coverage ratios. Ratios define relationships between various items appearing in financial statements.Financial statements involve various internal and external stakeholders group, which include employees, investors, and board of directors.

For instance, employees would pay attention to financial decisions performed by company management, which will affect their incomes and benefits. Board of directors would consider shareholder’s interests as the ultimate objective, thus would be interested in performance related to revenues and share prices. Investors are likely to check the long-term financial performance based on equity, net income, and long-term debt, seeking for more significant data behind the one reported in financial statements, and would be more concerned with a time-series analysis.

Profitability analysis demonstrated that the company has gone through some major challenges that caused a drop in all chosen profitability ratios in 2013, but managed to re-structure its financial positions in 2014. Though, such drawback has not reflected negatively on company’s asset performance, which remains relatively stable for all three ratios chosen to evaluate its financial performance. Similarly, its capital structure has not been critically affected by this change, but there definitely was an impact on liquidity, which, however, has been stabilized.Seven West media plays an important role in defining the media landscape in Australia, competing with Fairfax Media Limited. APN News & Media Limited, and News Corporation. In general, company’s financial performance indicators point out relatively strong and stable market position, with a particular drawback on profitability in 2013. Particularly, this is explained by the changing nature of media business overall, which requires businesses to adjust relevant market strategies to fit the overall competition. The company focuses its presence on broadcast television, newspaper and magazine publishing and online to create the framework for sustainable development. Beyond driving the leadership of the media businesses, the company has undertaken a lot over the past twelve months in changing how it does business: in particular, building its creative content, managing costs and driving greater synergies across media businesses. Beyond the rapid developments in technology and new …

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