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Performance analysis - SingTel vs Telstra

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Part A SingTel (Singaporean-owned Company) and Telstra (Australian-owned Company) are leading corporations in communication with major businesses in fixed telephony, mobile phone and Internet. The two companies each have more than a hundred years of experience in telecommunication with domestic and international markets. Although they both have subsidiaries and joint ventures overseas, Telstra’s concerns are limited to Asia-Pacific and North America markets, while SingTel focuses on a wider range including Asia-Pacific, North America, Europe and Middle East. Optus – a SingTel subsidiary - is the second largest telecommunication provider in Australia whose Earnings Before Interest, Tax, Depreciation And Amortization (EBITDA) is …show more content…

2. Liquidity: Liquidity Ratios SingTel Telstra 2008 2007 %Change 2008 2007 %Change Current Ratio 0.7037 1.1783 ↓40.28% 0.6787 0.5642 ↑20.30% Quick Ratio 0.6822 1.1526 ↓40.82% 0.6038 0.5020 ↑20.28% Telstra’s current ratio increased from 0.5642 to 0.6787 by 20.30%, while SingTel’s one decreased significantly from 1.1783 to 0.7037 by 40.28%. Moreover, trend of quick ratio was same as the situation of the current ratio (a 20.28% improvement of Telstra to 0.6038 and a 40.82% decline of SingTel to 0.6822). It is clearly to say that SingTel could find more difficult than Telstra to adapt current assets into cash straight away in order to pay current liabilities. For this reason, the financial position of Telstra was definitely better than SingTel. 3. Financial Stability: Financial Stability SingTel Telstra 2008 2007 %Change 2008 2007 %Change Debt Ratio 0.3950 0.3616 ↑9.24% 0.6771 0.6675 ↑1.43% Debt Equity Ratio 0.6529 0.5664 ↑15.28% 2.0969 2.0077 ↑4.44% Times-interest-earned Ratio 10.5627 9.5044 ↑11.13% 5.1186 5.4098 ↓5.38% SingTel’s debt ratio was dramatically raised from 0.3616 to 0.3950 by 9.24%, whereas Telstra’s one had just slightly increased from 0.6675 to 0.6771 by 1.43%. However, debt

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