Industrial Project on Two Public Listed Companies Starhub and Singtel

Topics: Financial ratios, Financial statements, Cash flow Pages: 19 (5949 words) Published: March 10, 2013
FM 2038

Group members:
1. Tran Kim Phat(1105008417)
2. Trinh Thi Thuy Tien(1007006997)
3. Le Quynh Nhu(1008007168)
4. Yudi Hartanto(1203009595)
Lecturer: Mr. Willie Thia
Submission date: November 29th 2012
Word calculation: 5123
Table of Contents
Executive Summary3
1. Introduction4
2.1. Objectives of financial analysis4
2.2. Significance of the financial analysis5
2. Firm, Industry, and Environment6
3.3. Description of the firms and its management6
3.4. Companies’ financial highlight8
3. Evaluation of Financial Statements10
4.5. Profitability10
4.6. Liquidity12
4.7. Gearing14
4.8. Investment17
4. SWOT Analysis20
5.9. Strength20
5.10. Weaknesses21
5.11. Opportunities23
5.12. Threats24
5. Recommendation26
6. Conclusion27

Executive Summary
The purpose of this project is to have an overview in detail of history performance of the two listed companies in Singapore, Singapore Telecommunication Limited (Singtel) and Starhub Limited (Starhub). The project gives information about the firms and their management, the competitive environment, also the economic climate and outlook. In addition, the financial statements of the two companies will be evaluated in term of profitability, liquidity, gearing, and investment ratios. By the way, the SWOT analysis is also mentioned in this report; in order to, state Strengths, Weaknesses, Opportunities, and Threats of the both companies. Finally, the recommendation will be also given to improve the companies’ performance.

1. Introduction
2.1. Objectives of financial analysis
The major objective of financial statement analysis is as follow: Assessment of companies’ past performances: Past performance is a good indicator of future performance. Investors or creditors are interested in the trend of past sales, cost of goods sold, operating expenses, net income, cash flows and return on investment. These trends offer a means for judging management's past performance and are possible indicators of future performance. Assessment of companies’ current position: Financial statement analysis shows the current position of the firms in terms of the types of assets owned by a business firm and the different liabilities due against the enterprise. Prediction of profitability and growth prospects: Financial statement analysis helps in assessing and predicting the earning prospects and growth rates in earning which are used by investors while comparing investment alternatives and other users in judging earning potential of business. Prediction of bankruptcy and failure: Financial statement analysis is an important tool in assessing and predicting bankruptcy and probability of business failure. Assessment of the operational efficiency: Financial statement analysis helps to assess the operational efficiency of the management of companies. The actual performance of the firms which is revealed in the financial statements can be compared with some standards set earlier and the deviation of any between standards and actual performance can be used as the indicator of efficiency of the management.

2.2. Significance of the financial analysis
Financial statement analysis is a significant business activity because a corporation's financial statements provide useful information on its economic standing and profit levels. These statements also help an investor, a regulator or a company's top management understands operating data, evaluate cash receipts and payments during a period and appraise owners' investments in the company. Function of financial statement analysis is to allow a corporation to review operating data and evaluate periodic business performance. A corporation also may analyze financial statements to gauge levels of cash flows and owner investments. Alternatively, a...
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