Orca Share Media1513508711305

Philippine Long
Philippine Long Distance

Distance Telephone
Telephone(PLDT)
(PLDT)Inc.
Inc.
About PLDT Financial Financial Statements
Statements Analysis
PLDT vs. Globe PLDT vs. AT&T Recommendation

to Management
Philippine Long Distance Telephone (PLDT) Inc.
Statements Analysis

to Management
Comparative Financial Statements from 2015 to 2016
Statements Analysis

to Management
FINANCIAL STATEMENTS COMPARISON
( in PHP million)2016 and 2015
2016 2015
REVENUE (in PHP million) 165,262 171,103
GROSS MARGIN 74.5% 75.5%
Operating income (in PHP million) 36,989 42,841
Operating margin 22.4% 25.0%
Net income (in PHP million) 22,075 20,162
Earnings per share (PHP) 92.33 101.85
Dividends (PHP) 106 126
Payout ratio 114.8% 123.7%
Shares (in million) 216 216
Operating cash flow (in PHP million) 48,976 69,744
Capital spending (in PHP million) (42,418) (43,132)
Free cash flow (in PHP million) 6,558 26,621
Working capital (in PHP million) (96,049) (67,225)
KEY RATIO COMPARISON

LIQUIDITY RATIO 2016 2015
Current ratio 0.47 0.58
Quick ratio 0.36 0.46
Current ratio and quick ratio tells that the company has lowered its
capability to pay its current liability by its current assets/quick assets by 0.11x
and 0.10x.

PROFITABILITY RATIO 2016 2015
Return on assets 4.29 4.94
Return on equity 18.07 17.82
The return on assets has declined by 0.65 due to the fact that the
company decreases its net income this year and increases it total assets, so the
efficiency of the use of the assets is low. The return on equity increases by 0.25
since the net income decreases and its equity decreases, so the efficiency of the
company to generate profit out of the money invested by the shareholders
increases.
EFFICIENCY RATIO 2016 2015

Asset Turnover 0.35 0.38
Receivables Turnover 6.7 4.0
DSO 53.73 90

SOLVENCY RATIO 2016 2015
Total Debt to Equity 1.783 1.486
Total Debt to Assets 40.60 36.92
TIE 3.41 11.59

MARKET VALUE RATIO 2016 2015
Price to Earnings Ratio 15.96 28.98
Statements Analysis

to Management
PLDT Inc. & Globe Telecom Inc.:
PLDT Inc. Globe Telecom Inc.

REVENUE P 165,262 P 126,183
GROSS MARGIN 74.5% 82.9%
Operating income (million) P 36,989 P 21,937
Operating margin 22.4% 17.4%
Net income (million) P 22,075 P 15,878
Earnings per share P92.33 P115.27
Dividends P 106 P 88
Payout ratio 114.8% 85.3%
Shares (in million) 216 133
Operating cash flow (in PHP million) 48,976 37,463
Capital spending (in PHP million) (42,418) (36,745)
Free cash flow (in PHP million) 6,558 718
Working capital (in PHP million) (96,049) (29,379)
LIQUIDITY RATIO PLDT Inc. Globe Telecom Inc.
PROFITABILITY RATIO PLDT Inc. Globe Telecom Inc.

EFFICIENCY RATIO PLDT Inc. Globe Telecom Inc.

Total Asset Turnover .35 .57
Receivable Turnover 6.7 4.69
Daily Sales Outstanding 53.73 75.76
SOLVENCY RATIO PLDT Inc. Globe Telecom Inc.

Debt-Equity 178.34 167.10
Debt-Asset 40.60 42.43
Times Interest Earned 3.41 6.69
MARKET VALUE RATIO PLDT Inc. Globe Telecom Inc.

Price to Cash Flow Ratio 6.24 5.93
Statements Analysis

to Management
(in PHP million) PLDT Inc. and AT&T Inc.
AT&T PLDT
REVENUE (in PHP million) 8,122,312 165,262
GROSS MARGIN (%) 53.1 74.5
Operating income (in PHP million) 1,207,392 36,989
Operating margin (%) 14.9 22.4
Net income (in PHP million) 643,493 22,075
Earnings per share (PHP) 104.14 92.33
Dividends (PHP) 95.71 106
Payout ratio (%) 81.3 114.8
Shares (in million) 6,189 216
Operating cash flow (in PHP million) 998.76274 48,976
Capital spending (in PHP million) 1,951,108 43,082
Free cash flow (in PHP million) -1,111,235 6,558
Working capital (in PHP million) 839,873 (96,049)

LIQUIDITY RATIO AT&T PLDT
PROFITABILITY RATIO AT&T PLDT

EFFICIENCY RATIO AT&T PLDT

Asset Turnover .41 0.35
Receivables Turnover 8.92 6.7
DSO 40 53.73
SOLVENCY RATIO AT&T PLDT

Total Debt to Equity 1.31 1.783
Total Debt to Assets 30.59 40.60
TIE 4.48 3.41
MARKET VALUE RATIO AT&T PLDT

Statements Analysis

to Management
Recommendation to Management
As for the Company’s Operation (between 2016 and 2015):
The comparison for the telecommunications company of PLDT for the

years 2015 and 2016, we have observed that there was a decline in the ratios
as discussed above. This decline can be mitigated or refrained from if the
company did not give out great dividends because the revenues for the years
2016 and 2015 were not sufficient enough, in addition to that, the pay-out
ratio exceeded 100 percent. Also, the great number of dividend given for year
2015 may have affected the following year causing its cash flows to reduce its
operations. A bigger reduction in the pay-out ratio may have been
implemented than that of the original.
With regards to the key ratio component the company became more
unstable and it can be visibly seen that they are being financed through debt,
creating more and more of it instead of reducing it. They may change their
financing strategy by reducing loans which turns into debts and a great way to
continue having funds is to find investments producing assets instead of
liabilities. In this way they can start focusing more on making their assets more
efficient than finding ways to make up for their debts. If they have lesser debts
to take care of they can focus on the utilization of their assets and see how it
can help them finance the company through it.
The management must see the option of adopting policy or by

benchmarking with the competitor’s policy that will lower the dividend
payments in order to increase the availability of funds that may be invested for
future expansion; still the company is able to pay its dividends from its current
operating sources. The company utilizes its operation without much spending
in capital investment, if the company would’ve spend more for capital with
proper management could result to an increase in revenue. The market also
shows that the markets are reacting unfavourably to the firm.
The decrease in current ratio might indicate a negative effect in the

company’s financial situation. Though the current assets could still cover its
current liabilities, a declining ratio could indicate a failing financial quiet current
asset. Management should use the declining result in ratio to oppose the
possibility of acquiring the same result for the next year, wherein they can
already make a strategy to eliminate the possibility. The rising trends with
regards to the short term debs must be viewed by the management, producing
more asset and investment and utilizing it without acquiring more debts. Lower
asset turnover indicates that there is a less efficiency in management’s ability
to earn profit from sales or they might be too focused on placing more fixed
assets.
A negative ratio with regards to the firm’s capital structure in terms of

relationship between the funds supplied by creditors and investors,
management must acquire or have more investors than acquiring more debts.
It seems that, PLDT Inc. is well-positioned for future growth. They financed
much of its expansion with borrowings, and so far, its shareholders have
benefited with it. However, the company should be aware and cautious of the
greater risks associated with debt financing.
Operation against competitor in the same Industry (Globe Telecom Inc.):
PLDT’s ratio compared with GLOBE shows PLDT has a lower debt-
paying ability. PLDT management should look up for a strategy that will
increase the efficiency in managing their total investment in assets and in
generating return to its shareholders. Net investment must or profit earned
must be relatively higher than their investment in total assets and in common
shareholder. They should be able to utilize their given assets and investment
while producing profit higher than Globe. PLDT can benchmark the GLOBE’s
ability to generate lower dividends payment while having available funds.
Operation against competitor in the same Industry (Globe Telecom Inc.):
A higher net income by the PLDT indicate a good standing though

they still have to be aware of their lower price earnings ratio which is relatively
lower that Globe’s, this indicates that Globe has a higher market price of
ordinary share than of with the PLDT. PLDT should maintain its standing of
having lower risk by satisfying their creditors before acquiring assets, the
company has a good standing in paying their debts, because they were able to
satisfy fixed charges and interest charges in acquiring assets.
Operation against International Company (AT&T Inc.):
For the comparison on international level as for the

telecommunications company in the Philippines which is PLDT and the one in
the United States which is the AT&T. We can freely observe that the biggest
problem of PLDT is the way it manages its dividends and how it does its
financing which is through debts based on the comparison beforehand. While
for this comparison we can see that PLDT does better than international
company AT&T in terms of return on asset and return on equity though it still
lacks in terms of quick ratio especially current ratio. Although it is a good sign
that the company is able to generate a great return on asset and equity despite
the low current ratio.
They also are in a better position in terms of free cash flow as

compared to AT&T this means that they are better in investments than the
other company which they should more dwell on to be able to improve their
current and quick ratios. Again, they should lessen their debts and focus on
investments seeing that they have some idea as to how to handle capital
expenditures and generate cash back to the company. We should also take into
account the negative working capital of PLDT, it is a good sign that such aspect
is negative because this generally arises when you are able to generate cash
before you should even have to pay. The resultant negative working capital is
due to their capital structure and they can maintain this when they have timely
transactions maximizing their efficiency and cash basis business with high turn-
over ratios.
PLDT has a good standing with regards to their gross margin, having
more profit after considering cost of goods sold. Thought AT&T has relatively
higher operating income, still PLDT were able to effectively incorporate their
operating expenses in association with their normal business activities
compared with AT&T. PLDT’s free cash flow resulted from more movements in
operating activities indicates that they were more focused in their operation
rather than using cash for investment and dividends, on the contrary AT&T is
more concern in having investment and dividend distribution or financing more
for their basic needs than having an excess for operation.
PLDT has a good standing with regards to their gross margin, having
more profit after considering cost of goods sold. Thought AT&T has relatively
higher operating income, still PLDT were able to effectively incorporate their
operating expenses in association with their normal business activities
compared with AT&T. PLDT’s free cash flow resulted from more movements in
operating activities indicates that they were more focused in their operation
rather than using cash for investment and dividends, on the contrary AT&T is
more concern in having investment and dividend distribution or financing more
for their basic needs than having an excess for operation.
AT&T’s EPS indicates that they have an edge over PLDT when it comes
to the investment return of ordinary shareholders, still PLDT were able to
create return for their shareholders. PLDT’s ability to pay dividend is good while
still having a fund for future investments. More investor will rather choose
PLDT for its Dividends yield than with AT&T which indicates that if that investor
chooses to invest in AT&T it would’ve been because they see AT&T for its long
term capital appreciation. PLTD’s current and quick ratio is lower than with
AT&T, in connection with this because PLDT has a lower percentage of assets
than with AT&T, it is surprisingly PLDT was still able to generate higher net
profit and net income as a result of higher return on assets. PLDT must focus on
how to increase their efficiency ratio; they should be able to generate more
sales after considering expenses having the given number of assets.
They must also review their collection policy without being too
restrictive, and the length of collection period to lessen the percentage of
possible uncollectible and write-offs. PLDT also has a lower solvency ratio
compared with AT&T, they should focus satisfying fixed charges which could
result into bankruptcy, and they should be able to manage their total liabilities
having a given number of assets and equity. Their TIE is lower than with AT&T
though it is a positive ratio, it is still lower than the international competitor,
we can already see the firm’s ability from its operation to provide protection to
its long-term creditors, Though PLDT were able to cover its interest expense
from its operating earnings, they must still consider their total liabilities not just
the interest expense.
GROUP 3.

Orca Share Media1513508711305

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Orca Share Media1513508711305

Загружено:

Авторское право:

Доступные форматы

Philippine Long

Philippine Long Distance

PLDT vs. Globe PLDT vs. AT&T Recommendation

PLDT vs. Globe PLDT vs. AT&T Recommendation

PLDT vs. Globe PLDT vs. AT&T Recommendation

KEY RATIO COMPARISON

KEY RATIO COMPARISON

KEY RATIO COMPARISON

EFFICIENCY RATIO 2016 2015

KEY RATIO COMPARISON

KEY RATIO COMPARISON

PLDT vs. Globe PLDT vs. AT&T Recommendation

PLDT Inc. Globe Telecom Inc.

PROFITABILITY RATIO PLDT Inc. Globe Telecom Inc.

EFFICIENCY RATIO PLDT Inc. Globe Telecom Inc.

SOLVENCY RATIO PLDT Inc. Globe Telecom Inc.

MARKET VALUE RATIO PLDT Inc. Globe Telecom Inc.

PLDT vs. Globe PLDT vs. AT&T Recommendation

KEY RATIO COMPARISON

PROFITABILITY RATIO AT&T PLDT

EFFICIENCY RATIO AT&T PLDT

SOLVENCY RATIO AT&T PLDT

MARKET VALUE RATIO AT&T PLDT

PLDT vs. Globe PLDT vs. AT&T Recommendation

As for the Company’s Operation (between 2016 and 2015):

The comparison for the telecommunications company of PLDT for the

As for the Company’s Operation (between 2016 and 2015):

As for the Company’s Operation (between 2016 and 2015):

The management must see the option of adopting policy or by

As for the Company’s Operation (between 2016 and 2015):

The decrease in current ratio might indicate a negative effect in the

As for the Company’s Operation (between 2016 and 2015):

A negative ratio with regards to the firm’s capital structure in terms of

Operation against competitor in the same Industry (Globe Telecom Inc.):

Operation against competitor in the same Industry (Globe Telecom Inc.):

A higher net income by the PLDT indicate a good standing though

Operation against International Company (AT&T Inc.):

For the comparison on international level as for the

Operation against International Company (AT&T Inc.):

They also are in a better position in terms of free cash flow as

Operation against International Company (AT&T Inc.):

Operation against International Company (AT&T Inc.):

Operation against International Company (AT&T Inc.):

Operation against International Company (AT&T Inc.):

Вам также может понравиться