FINANCIAL ANALYSIS

Pakistan Telecommunication Limited

Introduction

 largest telecommunications provider

 the largest CDMA operator in the country
 provider infrastructure to other telecom
operators
 privatization of PTCL
Analysis

 External Analysis
 1 Competition
 2 Deregulation Policy in 2003 and 2004
 3 Issued new licenses
 Internal Analysis
 1 Increase private investment in the telecom sector
 2 Encourage local telecom service industry
 3 Accelerate expansion of telecom infrastructure
 4 Encourage fair competition among service
providers
Year ended June 30   2010 2009 2008 2007 2006
KEY INDICATORS            
             
LIQUIDITY            
Current ratio 1.51 1.5 1.81 2.19 1.66
Quick ratio 1.37 1.36 1.58 2.03 1.54
             
LEVERAGE            
Debt: equity % 51.14 54.05 39.47 37.75 44.16
Debt to total assets % 33.87 35.66 27.48 27.92 31.28
Long term debt to total capitalization % 20.87 18.69 18.03 15.74 15.63
             
COVERAGE            
Time interest earned % 36.42 16.43 -4.26 47.54 93.07
             
ACTIVITY            
Receivable turnover times 5.46 4.91 5.35 4.86 4.76
Receivable turnover in days days 67 74 68 75 77
Total assets turnover % 37.92 38.45 47.35 46.5 52.16
             
PROFITABILITY            
Gross profit margin % 33.08 36.3 35.09 28.67 39.66
Net profit margin % 16.26 15.45 -4.26 22.01 31.83
Return on investment % 6.16 5.94 -2.02 10.23 13.65
Return on equity % 9.33 9.28 -2.71 14.45 20.22
Liquidity Analysis

Q u i c k R a t i o

2.5

2.03
2
R a t i o

1.58 1.54
1.5 1.37 1.36

0.5

0
2010 2009 2008 2007 2006

quick assets laibilities

 Current Ratio
2.5
2.19

2 1.81
1.66
1.51 1.5
1.5

1 1 1 1 1
Ra t i o s

0.5

0
2010 2009 2008 2007 2006
current assets current liabilities
Leverage

De b t R a t i o
150
D e b t t o E q u i t y (% )

125
110.91
105.48
99.79 99.39 97.89
100

75

51.14 54.05
50 44.16
39.47 37.75

25

0
2010 2009 2008 2007 2006

Total Debt Shareholder's Equity

D e b t t o T o t a l A s s e t s (% )

De b t to Total Assets
250

200

150.8 154.05 152.8 152.24

150 140.1

100

50 33.87 35.66 31.28

27.48 27.92

0
2010 2009 2008 2007 2006

Debt Total Assets

 Long Term Debt to Total Capitalization
250

200

158.85
150
128.37 121.96
120.57 117.96

100

50 35.8
17.26 15.74 13.6 13.52

0
2010 2009 2008 2007 2006

Long Term Debt Total Capitalization

Coverage

Time Interest Earned

100 93.07
R a t i o s

75

47.54
50
36.42

25 16.43

-4.26
-25
2010 2009 2008 2007 2006

Time Interest Earned

Activity

Receivable Turnover

6
5.46 5.35
R a t i o s

4.91 4.86 4.76

0
2010 2009 2008 2007 2006

Receiveable Turnover (times)

 Total Assets Turnover

60
52.16
47.35 46.5
R a t i o s

45
37.92 38.45

30

15

0
2010 2009 2008 2007 2006

Total Assets Turnover (%)

Profitability
Net Profit & Gross Profit Margin

50

39.66
40 36.3 35.09
33.08
R a t i o s

31.83
28.67
30
22.01
20 16.26 15.45

10

-4.26
-10
2010 2009 2008 2007 2006

Net Profit (%) Gross Profit (%)

 Return on Investment & Equity

25

20
R a t i o s

15 13.65
10.23
10
6.16 5.94
5

-2.02
-5
2010 2009 2008 2007 2006

Return on Investment Retun on Equity

Common Size Analysis

 Asset Common Size Analysis

 Liabilities Common Size Analysis
 Profit & loss Common Size Analysis
Assets common Size Analysis
Index Analysis

 Assets Index Analysis

 Liabilities Index Analysis
 Profit & loss Index Analysis