Case: Digital Telecommunications S.A. , is one of the main providers of telecommunications services to consumers and companies (both public and private) in Latin America, In this case, we will work with Tigo Panama. The company operates in the market of Panamanian telecommunications since April 5, 2005 under the Movistar commercial label, after the name change of the former Bellsouth. On August 29, 2019, Telefónica sold Movistar Panama to the Luxembourgish European company Millicom International Cellular S.A. On August 26, 2020 it was renamed Tigo Panama. A mobile operator in a four-player market. You have been hired by a potential investor, who wishes to make contact and learn the financial information of Tigo Panama, to subsequently make certain decisions. Below are some questions that the investor has posed to you and You must respond in a written document. The financial information that will be used will be the company's consolidated financial statements as of December 31, 2019, 2020 and 2021. Statements: You are asked to answer the following questions, leaving evidence in the document of the calculations made in each case: 1. Regarding the Statement of financial situation of the company Telecomunicaciones Digitales S.A. Tigo Panama (formerly Cable Onda, S.A.), it is required: to). Perform a vertical analysis on sales for the following lines: cost of sales, distribution costs, administrative expenses and other expenses, by function. The analysis must be done for each year (2021, 2020 and 2019), and what was observed should be commented on. Indicate which subtotals are presented within the income statement. Perform a horizontal analysis that stop the variation between exercises for each of these subtotals. Has to be shown in numbers and percentages (for percentages, take as year base in 2019). b). Calculate the financial ratios ROE and ROA for the year ended 31 December 2021. For both values, consider equity and assets as denominators, without making exclusions of any kind (do not exclude results or movements of any kind), only take the average value of total equity and assets considering initial and final balance. Similarly, calculate the company's gross margin as of December 31, 2021 and December 31, 2020. Compare both years.
Case: Digital Telecommunications S.A. , is one of the main providers of telecommunications services to consumers and companies (both public and private) in Latin America, In this case, we will work with Tigo Panama. The company operates in the market of Panamanian telecommunications since April 5, 2005 under the Movistar commercial label, after the name change of the former Bellsouth. On August 29, 2019, Telefónica sold Movistar Panama to the Luxembourgish European company Millicom International Cellular S.A. On August 26, 2020 it was renamed Tigo Panama. A mobile operator in a four-player market. You have been hired by a potential investor, who wishes to make contact and learn the financial information of Tigo Panama, to subsequently make certain decisions. Below are some questions that the investor has posed to you and You must respond in a written document. The financial information that will be used will be the company's consolidated financial statements as of December 31, 2019, 2020 and 2021. Statements: You are asked to answer the following questions, leaving evidence in the document of the calculations made in each case: 1. Regarding the Statement of financial situation of the company Telecomunicaciones Digitales S.A. Tigo Panama (formerly Cable Onda, S.A.), it is required: to). Perform a vertical analysis on sales for the following lines: cost of sales, distribution costs, administrative expenses and other expenses, by function. The analysis must be done for each year (2021, 2020 and 2019), and what was observed should be commented on. Indicate which subtotals are presented within the income statement. Perform a horizontal analysis that stop the variation between exercises for each of these subtotals. Has to be shown in numbers and percentages (for percentages, take as year base in 2019). b). Calculate the financial ratios ROE and ROA for the year ended 31 December 2021. For both values, consider equity and assets as denominators, without making exclusions of any kind (do not exclude results or movements of any kind), only take the average value of total equity and assets considering initial and final balance. Similarly, calculate the company's gross margin as of December 31, 2021 and December 31, 2020. Compare both years.
Chapter17: Multinational Capital Structure And Cost Of Capital
Section: Chapter Questions
Problem 2QA
Question
Case:
Digital Telecommunications S.A. , is one of the main providers of telecommunications services to consumers and companies
(both public and private) in Latin America,
In this case, we will work with Tigo Panama. The company operates in the market of
Panamanian telecommunications since April 5, 2005 under the Movistar commercial label, after the name change of the former Bellsouth. On August 29, 2019, Telefónica sold Movistar Panama to the Luxembourgish European company Millicom International Cellular S.A.
On August 26, 2020 it was renamed Tigo
Panama. A mobile operator in a four-player market.
You have been hired by a potential investor, who wishes to make contact and learn the financial information of Tigo Panama, to subsequently make certain decisions.
Below are some questions that the investor has posed to you and
You must respond in a written document. The financial information that will be used will be the company's consolidated financial statements as of December 31, 2019, 2020 and 2021.
Statements:
You are asked to answer the following questions, leaving evidence in the document of the calculations made in each case:
1. Regarding the Statement of financial situation of the company Telecomunicaciones Digitales S.A. Tigo Panama (formerly Cable Onda, S.A.), it is required:
to). Perform a vertical analysis on sales for the following lines: cost
of sales, distribution costs, administrative expenses and other expenses, by function. The analysis must be done for each year (2021, 2020 and 2019),
and what was observed should be commented on. Indicate which subtotals are presented
within the income statement. Perform a horizontal analysis that
stop the variation between exercises for each of these subtotals. Has to
be shown in numbers and percentages (for percentages, take as year
base in 2019).
b). Calculate the financial ratios ROE and ROA for the year ended 31
December 2021. For both values, consider equity and assets as denominators, without making exclusions of any kind (do not exclude results or movements of any kind), only take the average value of total equity and assets considering initial and final balance.
Similarly, calculate the company's gross margin as of December 31, 2021 and December 31, 2020. Compare both years.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you