Financial Analysis for PalTel Presentation Transcript:
1.Financial Analysis for PalTel
2.Financial Statement Analysis
Any item reported in a financial statement has significance if its inclusion indicates that the item exists at a given time and in a certain quantity.
Financial Statement amounts must be compared with other financial amounts to provide more information.
3.There are three types of comparisons to provide decision usefulness of financial information:
Comparisons within a company are often useful to detect changes in financial relationships and significant trends.
Comparisons with other companies provide insight into a company's competitive position
Comparisons with industry averages provide information about a company's relative position within the industry.
4.Palestine Telecommunications Company P.L.C. (PALTEL) is:
Limited liability public shareholding company.
Registered and incorporated in Nablus in 1995 but it started their operations in 1997.
Engaged in providing, managing, and rendering wireline and wireless services.
The consolidated financial statements of PalTel for the year ended December 31, 2009 were authorized for issuance in accordance with a resolution of the Board of Directors on March 10, 2010.
The consolidated financial statements comprise the financial statements of PALTEL and its subsidiaries (the Group) as of December 31, 2009. PALTEL’s direct and indirect ownership in its subsidiaries’ subscribed capital was as follows:
PALCEL HADARA PALMEDIA HULUL REACH AYLA
(Ownership % 100)
Three basic TOOLS are used in financial statement analysis :
6. Horizontal Analysis
Is a technique for evaluating a series of financial statement data over a period of time.
Purpose is to determine whether an increase or decrease has taken place.
The increase or decrease can be expressed as either an amount or a percentage($,%).
7. Vertical Analysis
Is a technique for evaluating financial statement data that expresses each item in a financial statement as a percent of a base amount.
Total assets is always the base amount in vertical analysis of a balance sheet.
Single ratio by itself is not very meaningful.
9.Liquidity ratios Measure the short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash.
Short-term creditors such as bankers and suppliers
Measure the ability of the enterprise to survive over a long period of time
WHO CARES? Long-term creditors and stockholders
Measure the income or operating success of an enterprise for a given period of time
WHO CARES? Everybody
WHY? A company’s income affects:
its ability to obtain debt and equity financing
its liquidity position
its ability to grow