History And Analysis Of Bharti Cellular Finance Essay

Bharti Tele-Ventures was incorporated on July 7, 1995 as a company with limited liability under the Companies Act, for advancing telecommunications services. Bharti Tele-Ventures received certification for beginning of concern on January 18, 1996. The Company was ab initio formed as a wholly-owned subordinate of Bharti Telecom Limited. The chronology of events since Bharti Tele-Ventures was incorporated in 1995 is as follows:

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Calendar twelvemonth & A ; Events

Bharti Cellular launched cellular services ‘Airtel ‘ in Delhi

1997

British Telecom acquired a 21.05 % equity involvement in Bharti Cellular

1998

Bharti Telecom and British Telecom formed a 51 % : 49 % joint venture, Bharti

BT Internet for supplying Internet services

2002

Semens out with issue of 18.53 crore equity portions through book edifice path

with a floor monetary value of Rs 45 per portion, received command for 18.55 crore portions. Through

the issue, it becomes the first company in India to come out with 100 % book

constructing issue 2004

Bharti Tele-Ventures enters into a three twelvemonth service understanding with Ericsson

2005

Bharti inks $ 125-m trade with Nokia for rural web enlargement

Bharti Tele Ventures announces understanding with Vodafone

2007

Bharti Airtel, telecom major, has come out with a batch of enterprises including

Buying out SingTel ‘s 50 per cent interest in joint venture undersea overseas telegram company

Network i2i for $ 110 million.

Awards and Recognition

Wireless service supplier of the twelvemonth 2005 at the Frost and Sulivan Asia-Pacific ICT awards

Competitive service supplier of the twelvemonth 2005 at the Frost and Sulivan Asia-Pacific ICT awards

The Forbes Global 2000 list for the twelvemonth 2007 ranked Bharti at 1149

SWOT Analysis of bharati airtel

Strength

No existent Competition in nucleus activity in the immediate hereafter.

Highest market portion in Delhi in footings of no. of landline connexions.

Strong and gifted work force of 54000.

High on hard currency.

Screens remotest corners of all over the state.

Failing

Poor Customer Services

Poor quality of services and ailment handling.

Boring client application processing.

Erratic and defective charge.

Unfriendly payment installations.

Decelerate on execution.

Poor selling.

Poor system care

Poor employee motive

Opportunity

Limited mobility market

Booming telecom sector.

Per capita income is increasing.

Staff strength.

Menace

New private participants.

Increasing foreign investings.

Increasing no. of resignations on landline connexions.

Downward tendency in duties.

Decreasing client trueness and the advantage of decennaries of monopoly are gnawing.

RATIO ANALYSIS

Fiscal statement analysis is a judgmental procedure. One of the primary aims is designation of major alterations in tendencies, and relationships and the probe of the grounds underlying those alterations. The judgement procedure can be improved by experience and the usage of analytical tools. Probably the most widely used fiscal analysis technique is ratio analysis, the analysis of relationships between two or more line points on the fiscal statement. Fiscal ratios are normally expressed in per centum or times. Generally, fiscal ratios are calculated for the intent of measuring facets of a company ‘s operations and autumn into the undermentioned classs:

Liquidity ratios step a house ‘s ability to run into its current duties.

Profitability ratios step direction ‘s ability to command disbursals and to gain a return on the resources committed to the concern.

Leverage ratios measure the grade of protection of providers of long-run financess and can besides help in judging a house ‘s ability to raise extra debt and its capacity to pay its liabilities on clip.

Efficiency, activity or turnover ratios provide information about direction ‘s ability to command disbursals and to gain a return on the resources committed to the concern.

LIQUIDITY RATIOS

Working Capital: – Working capital compares current assets to current liabilities, and serves as the liquid modesty available to fulfill eventualities and uncertainnesss. A high on the job capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-run solvency of a concern and in finding if a house can pay its current liabilities when due.

Formula

Current Assets – Current Liabilitiess

Acid Test or Quick Ratio: –

A measuring of the liquidness place of the concern. The speedy ratio compares the hard currency plus hard currency equivalents and histories receivable to the current liabilities. The primary difference between the current ratio and the speedy ratio is the speedy ratio does non include stock list and prepaid disbursals in the computation. Consequently, a concern ‘s speedy ratio will be lower than its current ratio. It is a rigorous trial of liquidness.

Formula

Securities + Cash + Marketable Accounts Receivable Current Liabilitiess

PROFITABILITY RATIOS

Tax return on Capital Employed

This ratio reflects the overall profitableness of the concern. It is calculated by comparing the net income earned and the capital employed to gain it.

Formula

Tax return on Capital Employed = Net income before Interest, Tax and dividend *100

Capital Employed

Tax return on stockholder ‘s financess

This ratio reveals how productively the owner ‘s financess have been utilized by the house.

Net net income after involvement & A ; revenue enhancement /total stockholder ‘s financess

Net net income ratio

This ratio shows the relationship between net net income and gross revenues.

Net Net income Ratio = Net Profit * 100

Net Sale

Net incomes Per Share

This ratio measures the net income available to the equity stockholders on a per portion footing. All net incomes left after payment of revenue enhancement and penchant dividend are available to equity stockholders.

EPS = Net Net income – Dividend on Preference Shares

No of equity portions

Dividend per Share

DPS is the dividend distributed to equity stockholders divided by the no. of equity portions.

DPS = Dividend paid to Equity Shareholder

No. of Equity Shares

SOLVENCY RATIOS

Debt Equity Ratio

This ratio explains the relationship between the long term debts and portion holders ‘ financess.

Debt Equity Ratio = Debt

Equity

Debt to Total Fund Ratio

This ratio is a fluctuation of the Debt Equity Ratio and gives the same indicant as the debt equity ratio. In this ratio, debt is expressed in relation to entire financess.

Debt Entire Fundss Ratio = Debt

Equity + Debt

Analysis OF BALANCE SHEET OF BHARATI AIRTEL

2009

2008

Beginnings OF Fundss:

Share Capital

161.26

161.26

Militias Total

-2.79

-38.91

Entire Stockholders Fundss

158.47

122.35

Minority Interest

0

0

Secured Loans

63.07

123.2

Unbarred Loans

47.4

64.5

Entire Debt

110.47

187.7

Entire Liabilitiess

268.94

310.05

Application OF Fundss:

Gross Block

486.24

487.53

Less: Accumulated Depreciation

321.93

301.75

Less: Damage of Assetss

0

0

Net Block

164.31

185.78

Lease Adjustment

0

0

Capital Work in Advancement

5.58

1.8

Investings

96.5

89.2

Current Assets, Loans & A ; Progresss

Inventories

82.05

103.16

Assorted Debtors

46.23

38.3

Cash and Bank

14.48

63.69

Loans and Progresss

49.92

50.09

Entire Current Assets

192.68

255.24

Less: Current Liabilitiess and Commissariats

Current Liabilitiess

190.65

212.11

Commissariats

8.68

10.07

Entire Current Liabilitiess

199.33

222.18

Net Current Assetss

-6.65

33.06

Assorted Expenses non written off

9.21

0.22

Deferred Tax Assetss

0

0

Deferred Tax Liability

0.01

0.01

Internet Deferred Tax

-0.01

-0.01

Entire Assetss

268.94

310.05

Contingent Liabilitiess

162.46

46.29

Net income & A ; LOSS ACCOUNT OF BHARATI AIRTEL

2009 ( 12 )

2008 ( 12 )

2007 ( 9 )

2006 ( 15 )

Income:

Gross saless Employee turnover

856.85

809.08

Excise Duty

148.35

139.86

Net Gross saless

708.5

669.22

Other Income

119.02

81.98

Stock Adjustments

-1.49

9.45

Entire Income

826.03

760.65

Outgo:

Natural Materials

489.37

492.51

Power & A ; Fuel Cost

13.65

16.15

Employee Cost

86.8

69.82

Other Fabrication Expenses

19.56

19.1

Selling and Administration Expenses

86.84

83.11

Assorted Expenses

43.02

27.83

Less: Pre-operative Expenses Capitalized

0.05

0.02

Entire Outgo

739.19

708.5

Operating Net income

86.84

52.15

Interest

19.88

16.58

Gross Net income

66.96

35.57

Depreciation

21.18

23.27

Net income Before Tax

45.78

12.3

Tax

14.37

-1.04

Fringe Benefit Tax

0.65

0.6

Deferred Tax

0

0

Net Net income before Minority Interest

30.76

12.74

Minority Interest

0

0

Net Net income after Minority Interest

30.76

12.74

Extraordinary Items

85.24

70.51

Adjusted Net Net income

-54.48

-57.77

Adjst. below Net Net income

7.3

11.26

P & A ; L Balance brought frontward

-54.26

-78.26

Statutory Appropriations

0

0

Appropriations

0

0

P & A ; L Balance carried down

-16.2

-54.26

Dividend

0

0

Preference Dividend

0

0

Equity Dividend ( % )

0

0

EPS before Minority Interest ( Unit Cur. )

1.91

0.79

EPS before Minority Interest ( Adj ) ( Unit Curr. )

2

1

EPS after Minority Interest ( Unit Curr. )

1.91

0.79

EPS after Minority Interest ( Adj ) ( Unit Curr. )

1.91

0.79

Book Value ( Unit Curr. )

9.21

6.85

In crores

Ratios

A

Mar ‘ 09

Mar ‘ 08

Per portion ratios

Adjusted EPS ( Rs )

48.93

34.08

Adjusted hard currency EPS ( Rs )

66.76

52.16

Reported EPS ( Rs )

40.79

32.90

Reported hard currency EPS ( Rs )

58.63

50.99

Dividend per portion

2.00

Operating net income per portion ( Rs )

69.50

56.16

Book value ( excl rpm RESs ) per portion ( Rs )

15.54

7.76

Book value ( incl rpm RESs ) per portion ( Rs. )

15.54

7.77

Net runing income per portion ( Rs )

179.37

135.73

Free militias per portion ( Rs )

121.78

83.18

Profitability ratios

Operating border ( % )

38.74

41.37

Gross net income border ( % )

29.33

29.08

Net net income border ( % )

22.58

23.99

Adjusted hard currency border ( % )

36.96

38.03

Adjusted return on net worth ( % )

33.74

32.04

Reported return on net worth ( % )

28.13

30.94

Return on long term financess ( % )

29.01

28.52

Leverage ratios

Long term debt / Equity

0.25

Entire debt/equity

0.28

Owners fund as % of entire beginning

78.11

75.43

Fixed assets turnover ratio

0.99

1.03

Liquidity ratios

Current ratio

0.72

0.58

Current ratio ( inc. st. loans )

0.69

0.56

Quick ratio

0.64

0.55

Inventory turnover ratio

547.83

453.06

RFERENCE

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