Strategic Changes – Telecom Limited Company Part 5

The items that have been identified

Conclusion

Strategic Changes – Telecom Limited Company Part 5 The items that have been identified, analysed and discussed are the most relevant strategic reasons for the strategic changes and firm performance of Telecom Limited Company. It is clear that the company has a strong financial position mostly in some areas but not all. Effective measures suggested in the analysis in this report can be used to increase the performance of TPG. 

 

 

Telecom Limited Company Part 5

 

 

APPENDIX

Break Down Calculatiuon – Telecom Limited Company
2012 2013 2014
US$ million US$ million US$ million
Solvency Ratio
Current ratio =  Total Current Assets/Total Current Liabilities
Year 2012 2013 2014  
total current assets 3650 3,662 4,477  
total current liabilities 2116 1,414 3,270  
Current ratio 1.72 2.59 1.37  
Quick ratio =  Total current assets -Inventory/Total current liabilities
year 2012 2013 2014
total current assets 3650 3,662 4,477
total current liabilities 2116 1,414 3,270
Inventory 617 961 1,467
Quick ratio   1.43 1.91 0.92
Leverage Ratio
Debt to Equity Ratio = Total Asset – Total Owner’s Equity/Total Owner’s Equity
year 2012 2013 2014
Total Assets 15,063 20,867 22,694
Total owner’s equity 3,762 5,289 7,583
Debt to equity ratio 3.00 2.95 1.99
Common Equity Leverage = Net Income/Net Income + Interest Expense (1-Tax rate)
Year 2012 2013 2014
Net Income 1,559 1,746 2,740
Interest expense 731 892 747
1-tax rate  = (1 – 30%) = 0.7 0.7 0.7 0.7
Common Equity Leverage 0.75 0.74 0.84
Profitability Ratio
Return on Asset = Net Income/Total Asset
year 2012 2013 2014
Net income 1,559 1,746 2,740
Total Asssets 15,063 20,867 22,694
Return on Asset  0.10 0.08 0.12
Return on Equity = Net Income/ Total Owner’s Equity
Year 2012 2013 2014
Net income 1,559 1,746 2,740
Total owner’s equity 3,762 5,289 7,583
Return on equity  0.41 0.33 0.36
Operation Efficiency Ratio
Fixed asset turnover = Revenue/Property, plant and equipment
Year 2012 2013 2014
Revenue 6,716 8,120 11,753
Property, plant and equipment 11,357 17,159 18,068
Fixed Aset Turnover 0.59 0.47 0.65
Sales/Revenue Per Employee = Revenue/Number of employees (average)
year 2012 2013 2014
Revenue 6,716 8,120 11,753
Number of employees (Average) 3,500 3,500 3,500
Sales/Revenue Per Employee  1.92 2.32 3.36
Break Down Calculatiuon – Fortescue Metals Group Ltd.
2012 2013 2014
US$ million US$ million US$ million
Solvency Ratio
Current ratio =  Total Current Assets/Total Current Liabilities
year 2012 2013 2014
total current assets 3650 3,662 4,477
total current liabilities 2116 1,414 3,270
Current ratio 1.72 2.59 1.37
Quick ratio =  Total current assets -Inventory/Total current liabilities
year 2012 2013 2014
total current assets 3650 3,662 4,477
total current liabilities 2116 1,414 3,270
Inventory 617 961 1,467
Quick ratio 1.43 1.91 0.92
Leverage Ratio
Debt to Equity Ratio = Total Asset – Total Owner’s Equity/Total Owner’s Equity
year 2012 2013 2014
Total Assets 15,063 20,867 22,694
Total owner’s equity 3,762 5,289 7,583
Debt to equity ratio 3.00 2.95 1.99
Common Equity Leverage = Net Income/Net Income + Interest Expense (1-Tax rate)
Year 2012 2013 2014
Net Income 1,559 1,746 2,740
Interest expense 731 892 747
1-tax rate  = (1 – 30%) = 0.7 0.7 0.7 0.7
Common Equity Leverage   0.75 0.74 0.84
Profitability Ratio
Return on Asset = Net Income/Total Asset
year 2012 2013 2014
Net income 1,559 1,746 2,740
Total Asssets 15,063 20,867 22,694
Return on Asset 0.10 0.08 0.12
Return on Equity = Net Income/ Total Owner’s Equity  
year 2012 2013 2014
Net income 1,559 1,746 2,740
Total owner’s equity 3,762 5,289 7,583
Return on equity  0.41 0.33 0.36
Operation Efficiency Ratio
Fixed asset turnover = Revenue/Property, plant and equipment    
Year 2012 2013 2014
Revenue 6,716 8,120 11,753
Property, plant and equipment 11,357 17,159 18,068
Fixed Aset Turnover 0.59 0.47 0.65
Sales/Revenue Per Employee = Revenue/Number of employees (average)      
year 2012 2013 2014
Revenue 6,716 8,120 11,753
Number of employees (Average) 3,500 3,500 3,500
Sales/Revenue Per Employee  1.92 2.32 3.36

Strategic Changes and Firm Performance – Telecom Limited Company

 

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