INCOME Vs EXPENDITURE FROM 2004-05 TO 2009-10.

(Rs In Lakhs)
4,000,000

3,500,000

3,000,000

2,500,000

2,000,000
Year 2005
1,500,000 Year 2006
Year 2007
1,000,000
Year 2008
500,000 Year 2009
Year 2010
0

Note the opposite trends in revenue and expenditure. Also, the employee cost and operating

expenses show inverse relation with revenue.

PROFIT CHART OVER SIX YEARS (Rs in Lakhs)

1,200,000

1,000,000

800,000
Year 2005
600,000 Year 2006

400,000 Year 2007

Year 2008
200,000
Year 2009
0 Year 2010
Profit before Prior Profit before Profit before Profit for the year
-200,000
period and Extraordinary taxation after Taxation
Extraordinary items
-400,000
items
 EXPENDITURE AS A PERCENTAGE TO TOTAL REVENUE (In %)
45.00
40.00
35.00
30.00
Year 2005
25.00
Year 2006
20.00 Year 2007
15.00 Year 2008
10.00 Year 2009
5.00 Year 2010

0.00
Employees Licence & Admin & Financial Depreciation
Cost Spectrum fee Operating Expenses
Expenses

Data indicates independence of main components of expenditure (Employee cost & Operating

Exp) on revenue. Revenue is not the driving force for these expenditures. This is a dangerous

situation indicating lack of efficient expenditure management.

BALANCE SHEET – CURRENT ASSETS (Rs in Lakhs)

4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
Year 2005
2,000,000
Year 2006
1,500,000
1,000,000 Year 2007

500,000 Year 2008

0 Year 2009
Year 2010

Inventory piling up is the area where attention is required. (See the Inventory Chart)
 RESERVES AND SURPLUS VS GROSS ASSETS (Rs in Lakhs)
18,000,000
16,000,000
14,000,000
Year 2005
12,000,000
Year 2006
10,000,000
Year 2007
8,000,000
Year 2008
6,000,000
Year 2009
4,000,000
Year 2010
2,000,000
0
Reserves and Surplus Total Fixed Assets

The steady increase in investment in assets is not reciprocated by the revenue. This indicates

the inefficient way of investing valuable funds. (Sharp increase in 2010 may be attributable to

WI MAX. The return from which is known to everyone) Also, the investment is not

proportional to the allocable reserves of revenue realized.

DEBTORS AND INVENTORY TO REVENUE (Rs In Lakhs)

25

20
Year 2005
15 Year 2006
Year 2007
10 Year 2008
Year 2009
5 Year 2010

0
Debtors Inventory

Inventory piling up without justification and irregular pattern of collection from subscribers

are evident from the above. The cost of funds blocked in these two segments is unnecessarily

weighing on the organization.

LIQUIDITY OF BUSINESS (Rs in Lakhs)

2.5

Year 2005
2
Year 2006
1.5 Year 2007
Year 2008
1
Year 2009
0.5 Year 2010

0
Current Assets to Current Liabilities

Liquidity has come down to the lowest of 6 years in 2010. Though the current level seems

healthy for a normal profit making business, in the case of BSNL, reading together with

declining revenue, declining profit increasing Expenditure, and non productive investments,

this indicates future liquidity crisis if trend reversal is not happened.

THE WRITING ON THE WALL……… (FIGURES IN Rs)

7000

6000

5000

Year 2005
4000
Year 2006
Year 2007
3000
Year 2008
Year 2009
2000
Year 2010

1000

0
Revenue Per Total Expenditure Net Profit Per
Subscriber Per Subscriber Subscriber
-1000
SUBSCRIBER BASE (In Numbers)
12000000

10000000

80000000 Year 2005

Year 2006
60000000
Year 2007
Year 2008
40000000
Year 2009
20000000 Year 2010

0
DEL Wireless Total Subscribers
(Basic & Wireless)

ICING ON THE CAKE – RETURN ON INVESTMENT (%)

16
14
12
Year 2005
10
Year 2006
8
Year 2007
6
Year 2008
4
Year 2009
2
Year 2010
0
-2 Return On Investments

-4