Assessment of the Financial Position and Performance of the Chosen Global Companies in the Telecommunication Industry

Dhaval NileshKumar Patel

Master's thesis

Abstract:

The purpose of this diploma thesis is to analyse and evaluate the financial position and performance of selected global companies, Bharti Airtel Limited and Vodafone Idea Limited, operating in the telecommunication industry in India and global market for the period of 5 years from 2019 to 2023. The thesis will engage with quantitative analysis such as vertical and horizontal analysis of financial statements. The thesis will also employ financial ratio analysis, which is widely used tool for measuring and comparing financial position and performance of companies operating in either the same or distinct region, segment, industry or market. The thesis will focus on the representation and changes of the reported assets, liabilities, expenses, revenues and profit for the chosen period in order to identify the potential financial problems and the most significant factors influencing the profit. Both companies improved their profitability over time after the impact of AGR verdict by honourable Supreme Court of India, with higher gross profit and operating profit margins. However, Vodafone Idea struggled to generate net profits, continuously reporting losses, and faced difficulty in attaining sustained profitability majorly due to rising finance costs and lose of customers. Bharti Airtel is well-positioned for continued development and innovation, thanks to its strong financial position and significant investments in sophisticated technology. Vodafone Idea's future prospects are questionable, demanding strategic reform and financial stability to reestablish competitiveness and sustainability. AGR verdict by honourable Supreme Court of India proven to be major reason of impacting profit of both these companies due to sudden major liability arisen to be paid for which provisions against these contingent liabilities were not considered in the books of accounts over a period.

Keywords

financial statements, financial analysis, financial position, balance sheet, assets, liabilities, equity, financial performance, Income statement, expenses, revenues, profit, Telecom, Telecommunication

Language used: English

Date on which the thesis was submitted / produced: 3. 4. 2024

Thesis defence

• Supervisor: Ing. Enikö Lörinczová, Ph.D.
• Reader: Jan Němec, externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme:
Economics and Management