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Graduation Presentation
 

Graduation Presentation

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After taking my CO OP with KPMG under the Saudi Telecom contract, I had to give a presentation to my university KFUPM about the situation of Telecom industry in Saudi Arabia.

After taking my CO OP with KPMG under the Saudi Telecom contract, I had to give a presentation to my university KFUPM about the situation of Telecom industry in Saudi Arabia.

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    Graduation Presentation Graduation Presentation Presentation Transcript

    • Financial Analysis for
    • Agenda Of The Presentation
        • KPMG contract with STC
      • Telecom Industry In SA
      • STC Under Focus
      • STC Financial Analysis
      • Recommendations
        • Report on Revenue Leakage
        • Completion of Billing cycle report.
        • Policies and procedure manual.
        • Job descriptions.
        • Roles and responsibilities.
      • KPMG contract Included :
    • Telecom Industry In SA
    • Telecom Industry In SA Expected Expansion.. Initial approval for 3 additional operators that is expected to go public via an IPO
    • Telecom Industry In SA
    • STC UNDER FOCUS
      • “ As leaders in a world of constant change, we strive to exceed our customers 'expectations so that, together, we reach new horizons”
      STC UNDER FOCUS Honesty Respect Commitment Initiative Cooperation Loyalty Mission: Values:
    • STC Profile - Largest telecom operator in the MENA region - Over 19,500 employees - 98% coverage of populated areas and highways - 19 million mobile subscribers, 4.1 million fixed subscribers and over 1million Broadband subscribers as at 31stDec. 2008
    •  
    •  
    • Financial Analysis
    • Liquidity Ratios The Current ratio = Current Assets/Current liabilities A part of surplus cash is invested in Murabaha deals with maturity periods of 90 days or less with Several local banks Quick ratio = (current assets-inventories)/current liabilities
    • Net working capital = current assets – current liabilities Cash ratio = (Cash + Marketable securities)/ Current liabilities
    • The profitability Ratios Gross Profit Margin = Gross Profit / Sales Net Profit Margin = Net Income/Sales The increased currency losses and tax provisions were mainly due to increased international operations of STC through its subsidiaries
    • Return on Total Assets = EBIT / Total Assets 1- Increasing competition in the domestic GSM market. Return on Equity = Net Income/Total Equity 2- the increase in the operating expenses.
    • The Payout Ratio = Div./Net Income The Plowback Ratio = 1 – Payout Ratio Growth in Equity = Plowback ratio * ROE
    • HAJJ EFFECT ON PROFITABILITY Mobily vs. STC : 3 million pilgrimages come to SA, Roaming revenues increase
    • The leverage Ratios Equity Multiplier = Total Assets/ Total Equity Debt Ratio = Total Liabilities/Total Assets Debt to Equity = Total Liabilities/ Equity
    • Efficiency Ratios Assets Turnover = Sales / Average Total Assets
    • Comparison between STC, Telecom Industry and Tadawul Regression Analysis
    • STS Regression vs. TASI SUMMARY OUTPUT Regression Statistics Multiple R 0.567966 R Square 0.322586 Adjusted R Square 0.320557 Standard Error 1.341974 Observations 336 ANOVA   df SS MS F Significance F Regression 1 286.4344 286.4344 159.0513 4.31944E-30 Residual 334 601.4983 1.800893 Total 335 887.9327         Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept -0.12631 0.073395 -1.72091 0.086193 -0.27068233 0.01806835 -0.270682334 0.01806835 X Variable 1 0.692213 0.054887 12.61155 4.32E-30 0.584245201 0.80018173 0.584245201 0.80018173
    • Telecom Industry's Regression vs. TASI SUMMARY OUTPUT Regression Statistics Multiple R 0.774565529 R Square 0.599951759 Adjusted R Square 0.59875401 Standard Error 0.731796062 Observations 336 ANOVA   df SS MS F Significance F Regression 1 268.2443414 268.2443 500.8993 2.0072E-68 Residual 334 178.8655093 0.535525 Total 335 447.1098506         Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept -0.034387424 0.040023445 -0.85918 0.390856 -0.11311722 0.044342 -0.1131172 0.04434237 X Variable 1 0.66987345 0.029930746 22.38078 2.01E-68 0.61099692 0.72875 0.61099692 0.72874998
    • Recommendations & Conclusion
    • 1- The mechanism of choosing managers, employees in STC must be developed 2- More Focus on the local market 3- I expect Mobily is going to beat STC more on the market share side, taking advantage of the internal systematic problems in STC 4- From 1998 until now, STC monopolizes the Saudi wired line voice operations. The introduction of 3 new fixed line licenses will negatively affect STC’s wired line revenues
    • Thank you for listening
    • Q & A