summarize two projects

Ratio Analysis
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Affiliate Institution
Date

Ratio Analysis

Financial analysis is crucial to the overall decision-making of the various entities. Concerning the telecommunications industry, this paper presents the ratio analysis of the Telus, Teleperformance, and the Rodgers Communication Limited both traded in the New York Stock Exchange. Telecommunication companies provide services and therefore some ratio classifications will not be relevant. It is this unique nature that has justified the choice of the above companies.
The financial ratios, the reference in this paper fall under the profitability, leverage, market values, activity, and liquidity classifications. For analysis, the period 2018 through 2020 was chosen. Regarding profitability, the financial ratios measure the company’s ability to generate revenue. These ratios indicate the ability to generate the income above its assets. In this category, the return on assets values showed that the trends for the Telus, Tele performance, and the Rodgers Company were on a generally declining trend. This implies that the companies’ returns regarding the assets invested were decreasing over time. From appendix 1, 2019 was the worst year as in this period all the companies had the lowest Return on Assets value.
Under profitability still is the Return on Equity values. The return on equity is computed by dividing the net income by the shareholder’s equity (Mubashir & Bin, 2017). In this category, the Tele performance company had an increasing trend that made it ahead of its counterparts. Another ratio classification is the liquidity class that measures the ability to meet obligations as and when they fall due. For this classification, there is the current ratio that is computed by dividing the current assets by the current liabilities. In this, classification, 2019 was a better year across the three companies. For companies’ comparison, the Telus Company performed better than the other companies.
Ratio performance in terms of activity was measured by the accounts receivable turnover ratio. The accounts receivable turnover ratio measures the average accounts receivables by the net credit sales. The figures computed (refer to appendix 1), indicating an overall increasing trend with 2019 reporting better performance than the other companies. The other financial ratios classification is the market value ratios. In this class will be the price-to-earnings ratio. The values increased over time for the Telus, Rodgers, and the Tele performance companies. The increasing performance indicated improving market value position which is proper for decision making. The companies under analysis had increasing leverage ratios which imply increasing debt.
The Teleperformance Company performed well in the leverage aspect in that it had lower performance ratios. The company had higher profitability and market value performance. This exceeded my expectations. On computing the financial ratios, volatility in the trends is something I learned and this made it difficult to assess the impact in some instances. Comparison against the other companies in the long term made it possible to refer. The experience I have had in the project will equip me with the skills to analyze future projects and improve my analytical capabilities.
With a 500,000 dollars allocation, considering the Telus, Tele Performance, and Rodgers companies. Allocation will be done using the profitability indices, the profitability indices are as shown in appendix 2. From appendix 2, the profitability index of the Tele performance company was 10.26 and was the highest. The Telus and Rodgers companies reported 0.3153 and 2.2382 respectively. More allocation will therefore go to Teleperformance, then Rodgers.

References
Mubashir, A., & Bin Tariq, D. (2017). Application of financial ratios as a firm’s key performance and failure indicator: review. Mubashir, Afeera and Bin Tariq, Yasir, Application of Financial Ratios as a Firm’s Key Performance and Failure Indicator: Review, Journal of Global Economics, Management and Research, 8(1), 18-27.

Appendix
Appendix 1

Appendix 2

Profitability Index

Teleperformance company

Telus Company

Rodgers Company

PV of inflows

1611000

334000

5797000

PV of outflows

157000

1059000

2590000

PI

10.261146

0.315392

2.238223938

Ratio TypeRatioRodgers Company
201820192020201820192020201820192020
ProfitabilityReturn on
Assets
6.566.016.265.114.922.976.85123.71663.9549
Return on
Equity
16.3315.1216.7217.3216.7810.7310.33235.06684.8974
Liquidity
Current
ratio
1.1092.51.81.232.51.344.53244.63064.2523
Activity
Accounts
receivable
turnover
ratio
4.734.524.787.457.446.795.9087.0895.8409
Market value
Price-to-
earnings
ratio
26.3831.9255.4914.4916.8427.9115.7616.0316.68
LeverageDebt ratio2.372.662.693.223.63.58
4.5294.6314.253
Teleperformance companyTelus Company