Telefonica Presentation and Financial Analysis

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Telefonica

Index

Introduction……………………………………………………………………. 3 Company overview……………………………………………………………. 4 Company Markets and Performance……………………………………….......4 Stock Market…………………………………………………………………....4 Company Strategy………………………………………………………………5 Key performance Indicators…………………………………………………….5 Company Financial Ratios

* Short-term Ratios………………………………………………………..7 * Activity Ratios…………………………………………………………..8 * Long-Term Ratios………………………………………………………10 * Profitability Ratios……………………………………………………...11 Company Trends Conclusion………………………………………………….12 Proposal of investment ………………………………………………………..13 * Discounted Payback…………………………………………………….14 * Payback…………………………………………………………………14 * NVP……………………………………………………………………..14 * PI………………………………………………………………………...15 * IRR………………………………………………………………………15 Conclusion……………………………………………………………………..16

Introduction

This paper work is made is made on the main criteria of the class of Strategic Business Finance, in order to apply topics taught as Financial Ratios, Investment’s Valuation and calculate Capital cost of a company. The company than we will stress on is the well knows Spanish Telecommunication Company called Telefónica. The paper work after the pretend financial analysis will make us understand the effects of than the global crisis had on a solid company as Telefónica between 2009 and 2011. And also the effects than an expansionist policy as telefónica has been making on the recent years can make on a company’s balance and financial statements.

Company overview

The company Telefonica was found in Madrid at 19 of April of 1924 whit the name of (translated) National Spanish Company of telecommunications (CTNE – Compañia Teléfonica Nacional de España). This was the first telecommunication company on Spain holding the monopoly per many years. It was owned by the government until 1997 when the decision to sell to the private sector was made and in January of 1999 they decide to change the name to Telefonica.

Currently Telefónica is one of the world leader integrated operator in the telecommunication sector, providing communication, information and entertainment solutions, with presence in Europe and Latin America. It operates in 25 countries. As of September 2012, Telefónica’s total number of customers amounted to 313.8 million.

Company Markets and Performance

Telefónica has one of the most international profiles in the sector with more than 75% of its business outside its home market and a reference point in the Spanish and Portuguese speaking market.

The Group stands in eighth position in the sector of telecommunications worldwide in terms of market capitalization the 1st as a European integrated operator and in fifteenth position in the Eurostoxx 50 ranking, composed of the major companies in Europe.

In Latin America, Telefónica gives service to more than 210.1 million customers as of the end of September 2012 becoming the leader operator in Brazil, Argentina, Chile and Peru and has substantial operations in Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Puerto Rico, Uruguay and Venezuela. In Europe, on top of the Spanish operations, the Company has operating companies in the United Kingdom, Ireland, Germany, Czech Republic and Slovakia, providing services to more than 102.9 million customers as of the end of September 2012.

Present in 25 countries and an average of 285,000 professionals. Consolidated revenues of 46.519 million euros and more than 313,8 million customer at September 2012: more than 245.6 million mobile phones accesses; more than 39.8 million fixed telephony accesses; more than 19.36 million Internet and data accesses and 3.3 million pay TV accesses.

Stock market

Telefónica is a listed company. It has more than 1.5 million direct shareholders. Its share capital consists of 4,563,996,485 ordinary shares traded on the continuous market on the Spanish Stock Exchanges (Madrid, Barcelona,...
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