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Financial Analysis. Sprint-Nextel and Uralsvyazinform
By
Alexander Bosch
Jorge Hernandez
Table of Contents
Sprint-Nextel. History and company overview...............................................................3
Uralsvyazinform . History and company overview.........................................................4
Sprint-Nextel. Common Size Balance Sheet...................................................................5
Uralsvyazinform. Common Size Balance Sheet.............................................................7
Sprint-Nextel. Common Size Income Statement............................................................8
Uralsvyazinform. Common Size Income
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Subscriber base exceeds 10.0 million: 3.7 million in fixed-line services, 5.7 million in mobile services, 0.5 million in broadband services. By 2013, the company plans to increase subscriber bases of local telephone services by 21,800 and this of broadband services by 34,800 subscribers. The investment volume as of 2008 totaled RUR 9,980 million (growth on 40.4% from the level of investment volume as of 2007.
1. Overall the company achieved better numbers in the 2009 financial statements. The liabilities and operating expenses has been decreased, generated more net income and have more cash available. 2. It has limited opportunities to grow, restricted by the regional constraints imposed by his parent company Svyazinvest. 3. The company has B+ by Standard & Poor 's and Fitch Rating. That indicates that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
Sprint-Nextel
Common Size Balance Sheet 2007, 2008, 2009
|Current assets | |2009 |2008 |2007 |
| | | | | |
With different level of the debt of the company according to Exhibit 3, we would predict by comparing to its peer Warner. Lambert Company at 32.4% debt to total capital ratio still maintain at weak AAA level. AHP had much better financial performance e.g. Earnings per Share and Return on Equity. With 50% Debt to Total Equity ratio, AHP may receive lower rating at AA level and we do not expect them to go lower than BBB rating even with 70% Debt to Total Equity
Company does not have big amount of debt to pay. In 1994 its outstanding debt is only 36.4% of its total assets which is a healthy rate. Its current assets are higher 2.4 times than its current liability. Also company has no outstanding interest to pay. Price earning ratio of 42.80 is highest among the competitors. (Pls. see exhibit 2, 3&4) for details. So we can safely conclude that BBBY has great potential to sustain.
Table no 8 shows the credit rating, Image rating and the Investor confidence index. The credit rating of the company has been ranging from B+ to A+. The best in industry score is 20 while the overall credit rating is 20.The image rating is 59 with best in industry and overall rating being 20. The investor confidence index is fair as compared to competitors A and C who have an excellent rating.
1.Return on Total Assets increase did what?, due to the improvement in Operating Income and the relatively small increase in Total Assets.
Accounting information is used by management in various ways to make the business decisions. Accounting information is used to compute financial ratios and comparing the financial data of one period with other. Various Ratios are used by the managers and accountants for controlling the functioning of the organization. These ratios are also known as accounting or financial ratios, these ratios play very important role in the organization. Following are the ratios of Verizon wireless for last three years:-
According to information gathered from the Sprint 's 10K document for 2012, Sprint Nextel Corporation was incorporated in 1938 under the laws of Kansas and over the years has become the third largest operator (53 Million subscribers) in the United States behind AT&T and Verizon.
free cash flow over the last eighteen months and our concomitant success in reducing the use of our line of
section). This shows that the company’s overall performance has improved over the course of 12
There is no significant increase or deduction in terms of financial performance. There is a slightly downturn showing in the franchising sales revenue from 5.19bn to 5.08bn contributed by almost the same amount of outlets. Basic earnings per share have increased from 21.78c to 23.75c whilst a decrease of 2c in dividend per share compared with 2010.
Overall the long term solvency position of the company satisfactory and less risky, because managerial policies kept the repercussion of recession ( increase in interest rate) in mind and hence reduced its reliance on debt financing This gives it a secure position from the point of view of long term creditors.
With respect to the company's balance sheet, the company is in a decent financial position despite the losses. In terms of liquidity, the company has remained liquid
In terms of financial flexibility, a relatively high interest coverage ratio (ICR) of 36.8 supports the company’s ability to Flexibility take on more debt. Especially by comparing the ratio with its peers, such ratio seems to match with its risk aversion philosophy. Agency Cost of Debt
The long-term liquidity risk ratio such as LT debt/Equity, D/E, and Total Liabilities to Total Assets all show a decline from year 2005 due to the repayment of debts. The interest coverage ratio also shows a healthy number of 29.45 in comparison to the industrial average of 15.04 indicating a high ability to pay out its interest expense. Such a low relative risk is not surprising due to the nature of its business depending heavily in R&D development and large intangible assets.
The number of 3G-subscribers rose enormously up to 3.05 million, which with no doubt was due to the launch of "FOMA" and the new 900i-handsets. The company even prognoses this figure to reach 10.6 million by 2005 whereas the 2G-subscriber number should go down by 13.5% to 37.1 million. The net profit more than tripled in the past fiscal year to 4.9 million
With the objective to understand the business performance of the two entities, we reviewed the 2007 financial statements of both company and tried to obtain some insight on the profitability and solvency of each entity.