Mobinil case study

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analysis of Mobinil financial situation in 2005 - 2006

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Mobinil case study

  1. 1. Presented to : Dr. Ashraf Ibrahim Case Study 2005-2006
  2. 2. Mobinil Profile Since its inception in May 1998, Mobinil has strived to maintain its position as the leading Mobile service operator in Egypt. Mobinil is committed to being the leading Mobile service provider in Egypt, providing the best quality service for the customers, the best working environment for the employees, top value for the shareholders, and proudly contributing to the development of the community.
  3. 3. Common Size analysis <ul><li>The Assets </li></ul><ul><li>Inventory: ↑ 30% in 2006. </li></ul><ul><li>Accounts receivable: ↑ 43% in 2006. </li></ul><ul><li>Cash on hand & in bank: ↓ 35% in 2006. </li></ul><ul><li>Total current assets: ↑ 5% in 2006. </li></ul><ul><li>Fixed assets: ↑ 26% in 2006. </li></ul><ul><li>Projects under construction: ↑ 28% in 2006. </li></ul><ul><li>Investments: ↓ 13% in 2006. </li></ul><ul><li>Total fixed assets: ↑ 16% in 2006. </li></ul><ul><li>Total assets: ↑ 14.5% in 2006. </li></ul>The Balance Sheet
  4. 4. Common Size analysis (cont.) <ul><li>The Liabilities: </li></ul><ul><li>Accounts payable: ↑ 27% in 2006. </li></ul><ul><li>Accrued expenses: ↓ 50% in 2006. </li></ul><ul><li>Total current liabilities: ↑ 14% in 2006. </li></ul><ul><li>Long term liabilities: ↑ 24% in 2006. </li></ul><ul><li>Long liabilities / total liabilities and shareholders’ equity ↑ 2.15% in 2006. </li></ul>The Balance Sheet
  5. 5. Common Size analysis (cont.) <ul><li>The shareholders’ equity: </li></ul><ul><li>Retained earnings / total liabilities & shareholders’ equity: ↑ 0.11% in 2006. </li></ul><ul><li>Reserves / total liabilities & shareholders’ equity: ↑ 0.36% in 2006. </li></ul><ul><li>Total shareholders’ equity / total liabilities & shareholders’ equity: ↓ 1.7% in 2006. </li></ul><ul><li>Total equity: ↑ 6% in 2006. </li></ul>The Balance Sheet
  6. 6. Common Size analysis <ul><li>Operating revenue: ↑ 19% in 2006. </li></ul><ul><li>Cost of service: ↑ 25% in 2006. </li></ul><ul><li>Gross profit: ↑ 17% in 2006. </li></ul><ul><li>Depreciation: ↑ 30% in 2006. </li></ul><ul><li>General & administrative expenses: ↑ 50% in 2006. </li></ul><ul><li>Operating profit: ↑ 5% in 2006. </li></ul><ul><li>Other incomes: ↓ 30% in 2006. </li></ul><ul><li>Other expenses: ↓ 8% in 2006. </li></ul><ul><li>Profit before tax & interest: ↑ 10% in 2006. </li></ul><ul><li>Interest expenses: ↑ 29% in 2006. </li></ul><ul><li>Taxes: ↑ 19% in 2006. </li></ul><ul><li>Net profit after tax: ↑ 5.7% in 2006. </li></ul>The Income Statement
  7. 7. THE FINANCIAL RATIOS
  8. 8. 1. Liquidity 2005 2006 Current ratio 29% 27% Quick ratio 28% 25% Cash ratio 14% 8% Horizontal analysis 2005 2006 Inventory 100% 129.23% Accounts receivable 100% 142.60%
  9. 9. 2. Assets Management 2005 2006 Inventory turnover 22.62 21.88 Inventory days on hand 15.92 16.45 Accounts receivable turnover 12.18 10.13 Average collecting period 29.55 35.52 Accounts payable turnover 1.02 1.00 Average paying period 354.42 359.18 Fixed assets turnover 0.97 0.99 Total assets turnover 0.83 0.86
  10. 10. 3. Debt 2005 2006 Debt ratio 0.76 0.78 Debt / equity ratio 0.86 1.09 Times interest earned 14.40 12.31 Horizontal analysis 2005 2006 Total assets 100% 114.44% Long term liabilities 100% 134.44% Total liabilities 100% 117.02% Total Shareholders' Equity 100% 106.22% Vertical analysis 2005 2006 Retained earnings 0.38% 0.49% Reserves 3.06% 3.40%
  11. 11. 4. Profitability 2005 2006 Gross profit margin 0.82 0.81 Horizontal analysis 2005 2006 Operating Revenue 100% 118.61% Cost of Service 100% 125.00% Gross Profit 100% 117.21% Operating profit margin 0.52 0.46 Horizontal analysis 2005 2006 Depreciation & Amortization 100% 129.94% General & Administration Expenses 100% 150.07% Operating Profit 100% 104.81% Net profit margin 0.27 0.24 Horizontal analysis 2005 2006 Interest expenses 100% 128.38% Taxes 100% 118.90% Return on total assets 0.22 0.21 Return on equity 0.94 0.93 Earning per share 13.48 14.20
  12. 12. CONCLUSION
  13. 13. problems <ul><li>Inventory increase. </li></ul><ul><li>Accounts receivable increase and collection decrease. </li></ul><ul><li>Liquidity. </li></ul><ul><li>Poor conversion of current liabilities into current assets. </li></ul><ul><li>Long term liabilities exceeded the equity. </li></ul><ul><li>Profitability reduction in 2006. </li></ul>
  14. 14. solution <ul><li>Increasing the accounts receivable collection rate. </li></ul><ul><li>Monitoring inventory consumption in 2007. </li></ul><ul><li>Increasing the reserved amounts of the net profit in future. </li></ul><ul><li>Stimulating the sales in 2007. </li></ul><ul><li>More investments in other companies or activities. </li></ul>
  15. 15. Thank you

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