Table of Content
Profile of TELUS
Profile of Rogers Communication Inc.
Financial Statement Analysis
Statement of Cash Flow
Financial Ratio Analysis
Asset Management Ratios
Cash Management Ratios
Recommendations and conclusion
TELUS Income Statement
Rogers Income Statement
TELUS Balance Sheet
Rogers Balance Sheet
TELUS Cash Flow Statement
Rogers Cash Flow Statement
* Executive Summary
This paper investigates the financial performances of two Canadian public companies, TELUS and Rogers, using the latest audited statements in order to make an investment recommendation. As part of the study, the communication market was examined, financial statements were used for analysis and key financial ratios were compared between the two companies and to the market. This report ends by recommending Rogers as the better investment according to the following criteria: * Rogers’ revenues are growing at faster rate.
* Rogers exhibits a lower cost structure.
* Rogers has a better ROA than TELUS.
* Rogers P/E ratio is higher than that of TELUS.
* Globally, Rogers characterizes as an investment with greater potential than TELUS.
Communications is a $50-billion-a-year industry in Canada, driving innovation, economic growth and connectedness across the country. It encompasses wired and wireless voice services, data services, broadcast distribution and forms of new media such as social networking and online video. Communication companies play a vital role in providing goods and services to customers of the Canadian marketplace. This report analyzes the financial statements of two major Communication companies, Rogers and TELUS, for comparative purposes with the objective of making a sound investment recommendation. Comprehensive corporative annual reports containing the balance sheet, income statement and statement of cash flow were used. This presentation focuses on the three aforementioned statements and the ratios derived from such statements.
After weathering the telecoms bubble, the Canadian telecom market is experiencing significant changes, as the result of the emergence of the quadruple play service (QPS). QPS is a marketing term for providing high-speed internet, television and telephone over a single broadband connection to mobile devices. Rising broadband penetration continues to drive the telecom market, with around 75% of all Canadian households subscribing to broadband by early 2009. Due to the analogue signal slowly transitioning to digital, telecoms will increasingly compete for the quadruple play consumer with new products and services, such as Video on Demand (VoD) and High Definition services to mobile devices. Broadband penetration is also driving the migration from traditional telephone lines to Voice over Internet Protocol (VoIP) telephony.
Consolidation in the mobile phone segment has created a healthier market, with three leading operators competing for customers and expanding their network coverage. The current step seen is “Service Bundling” with operators partnering with or acquiring software development companies in order to make a play across technologies and solutions. This is seen as a way to increase the revenue per customer, reduce churn (the proportion of contractual customers leaving a supplier during a given period), and compete on relatively even terms.
The market is expected to continue consolidating across regions and customers...
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