graduation presentation
DESCRIPTION
After taking my CO OP with KPMG under the Saudi Telecom contract, I had to give a presentation to my university KFUPM about the situation of Telecom industry in Saudi Arabia.TRANSCRIPT
Financial Analysis for
Agenda Of The Presentation
• KPMG contract with STC
• Telecom Industry In SA
• STC Under Focus
• STC Financial Analysis
• Recommendations
–Report on Revenue Leakage–Completion of Billing cycle report.–Policies and procedure manual.–Job descriptions.–Roles and responsibilities.
• KPMG contract Included :
Telecom Industry In SA
Telecom Industry In SA
Expected Expansion..
Initial approval for 3 additional operators that is expected to go public via an IPO
Telecom Industry In SA
STC UNDER FOCUS
• “As leaders in a world of constant change, we strive to exceed our customers 'expectations so that, together, we reach new horizons”
STC UNDER FOCUS
Honesty Respect Commitment Initiative Cooperation Loyalty
Mission:
Values:
STC Profile
- Largest telecom operator in the MENA region- Over 19,500 employees- 98% coverage of populated areas and highways- 19 million mobile subscribers, 4.1 million fixed subscribers and over 1million Broadband subscribers as at 31stDec. 2008
Financial Analysis
Liquidity RatiosThe Current ratio = Current Assets/Current liabilities
A part of surplus cash is invested in Murabaha deals with maturity periods of 90 days or less with Several local banks
Quick ratio= (current assets-inventories)/current liabilities
Net working capital = current assets – current liabilities Cash ratio = (Cash + Marketable securities)/ Current liabilities
The profitability Ratios
Gross Profit Margin= Gross Profit / Sales Net Profit Margin= Net Income/Sales
The increased currency losses and tax provisions were mainly due to increased international operations of STC through its subsidiaries
Return on Total Assets= EBIT / Total Assets
1- Increasing competition in the domestic GSM market.
Return on Equity= Net Income/Total Equity
2- the increase in the operating expenses.
The Payout Ratio = Div./Net Income The Plowback Ratio = 1 – Payout Ratio
Growth in Equity = Plowback ratio * ROE
HAJJ EFFECT ON PROFITABILITY
Mobily vs. STC : 3 million pilgrimages come to SA, Roaming revenues increase
The leverage Ratios
Equity Multiplier = Total Assets/ Total Equity Debt Ratio = Total Liabilities/Total Assets
Debt to Equity = Total Liabilities/ Equity
Efficiency Ratios
Assets Turnover = Sales / Average Total Assets
Comparison between STC, Telecom Industry and Tadawul
Regression Analysis
STS Regression vs. TASI
SUMMARY OUTPUT
Regression Statistics
Multiple R0.567966
R Square0.322586
Adjusted R Square0.320557
Standard Error1.341974
Observations336
ANOVA
dfSSMSFSignificance F
Regression1286.4344286.4344159.05134.31944E-30
Residual334601.49831.800893
Total335887.9327
CoefficientsStandard
Errort StatP-valueLower 95%Upper 95%Lower 95.0%Upper 95.0%
Intercept-0.126310.073395-1.720910.086193-0.270682330.01806835-0.2706823340.01806835
X Variable 10.6922130.05488712.611554.32E-300.5842452010.800181730.5842452010.80018173
Telecom Industry's Regression vs. TASI
SUMMARY OUTPUT
Regression Statistics
Multiple R0.774565529
R Square0.599951759
Adjusted R Square0.59875401
Standard Error0.731796062
Observations336
ANOVA
dfSSMSFSignificance F
Regression1268.2443414268.2443500.89932.0072E-68
Residual334178.86550930.535525
Total335447.1098506
CoefficientsStandard Errort StatP-valueLower 95%Upper 95%Lower 95.0%Upper 95.0%
Intercept-0.0343874240.040023445-0.859180.390856-0.113117220.044342-0.11311720.04434237
X Variable 10.669873450.02993074622.380782.01E-680.610996920.728750.610996920.72874998
Recommendations & Conclusion
1- The mechanism of choosing managers, employees in STC must be developed
2- More Focus on the local market
3- I expect Mobily is going to beat STC more on the market share side, taking advantage of the internal systematic problems in STC
4- From 1998 until now, STC monopolizes the Saudi wired line voice operations. The introduction of 3 new fixed line licenses will negatively affect STC’s wired line revenues
Thank you for listening
Q & A