TELECOM SECTOR

Fastest Growing Sector Important tool for Socio-Economic development

RELIANCE COMMUNICATIONS
Largest Mobile Phone Operator Top Ranked

BHARTI AIRTEL LIMITED

Founded On and By
Largest Telecom Operator

RATIO :
Ratio analysis measures & establishes cause and effect relationship between 2 items which are either from the balance sheet OR from the profit and loss account OR from both balance sheet and profit and loss account

Five types of Ratios 1) Return on investment ratio 2) Solvency ratio 3) Liquidity ratio 4) Resource Efficiency ratio 5) Profitability Ratio

Return on Investment Ratio

Particulars Return On Net Worth : = Profit pref. dividend x 100 Net Worth Equity Per Share : = Profit pref. dividend no. of equity share Cash Earning Per Share : = PAT-pref.dividend+Non cash charges no. of equity share o/s Reliance = -757.99 x 100 48144.48 = -1.57 % = -757.99 206.40 = Rs. -3.67 = -757.99+1594.27 206.40 =Rs. 4.05 Bharti airtel = 12286.20 x 100 44111.60 = 27.85 % = 12286.20 604.64 = Rs. 20.32 = 12286.20+4611.60 604.64 = Rs. 27.95

Solvency Ratio
Reliance Particulars
Net Asset Value: = Equity Shareholders fund No. of Equity Shares = 48144.48 206.40 =Rs. 233.26 = 44111.60 604.64 = Rs.72.95

Bharti Airtel

Debt Equity Ratio : = Long term debt Total net worth

= 31452.74 48144.48 =0.65 times

= 11897.50 44111.60 =0.27 times

Liquidity Ratio
Particular
Current Ratio : = Current Asset Current Liabilities Quick Ratio : = Current Assets Stock - Prepaid expenses Current Liabilities - Bank OD Collection Period to Customers : = Average Receivables x 365 Credit Sales

Reliance
= 19153.82 10,407.29 =1.84 : 1 times = 18847.71 10,407.29 = 1.81 : 1 times = 1969.25 x 365 12129.77

Bharti Airtel
= 12949.20 15423.90 =0.84 : 1 times = 12914.80 15423.90 = 0.84 : 1 times = 2375.8 x 365 38015.80

=59 days
Collection Period to Supplies : = Average Payables x 365 Credit Purchases Inventory Holding Period : = Inventory x365 --------

= 23 days
= 11188.8 x 365 4289.20 = 139 days = 109.60 x 365 4289.20

= 306.11 x 365 12389.31

RESOURCE EFFICIENCY RATIO

Particular
Fixed Assets Turnover Ratio = Net Sales Net Block of Fixed Assets

Reliance
= 13308.71 28840.90 = 0.46 times

Bharti Airtel
= 38015.80 40700.80 = 0.93 times = 38015.80 44111.60 =0.86 times = 38015.80 2375.80 = 16 times = 4289.20 11188.80 = 0.38 times

Net Worth Turnover Ratio = 13308.71 = Net Sales 48144.48 Net Worth = 0.28 times Debtors Turnover Ratio = Net Sales Average Receivables Creditors Turnover Ratio = Net Purchases Average Payables = 13308.71 1969.27 = 6.76 times -------------

PROFITABILITY RATIOS
Particular
Gross Profit Ratio = Gross Profit x 100 Net Sales Operating Profit Ratio = Operating Profit x 100 Net Sales Net Profit ratio = Net Profit x 100 Net Sales Effective Tax Rate = Current Incometax x 100 PBT

Reliance
= 4943.40 x 100 13308.71 = 37.14 % = 2417.65 x 100 13308.71 = 18.57 % = 421.01 x 100 13308.71 = 3.16 % = 1179 x 100 421.01 = 280 %

Bharti Airtel
= 33726.60 x 100 38015.80 = 88.72 % = 22774.70 x100 38015.80 = 59.91 % = 13295.10 x 100 38015.80 = 34.97 % = 1008.90 x 100 13295.10 = 7.58 %

CONCLUSION