Finance and Accounting Essay Example | Topics and Well Written Essays - 1250 words - 1

Finance and Accounting - Essay ExampleBoth these ratios address the bankruptcy issue. tally to the calculated ratios, Qatar Telecoms liquidity position seems to be strong as compared to Vodafone in two the courses 2010 and 2011. Qatar Telecoms personal liquidity ratios have deteriorated in 2011, compared to 2010, but then rase the company has a stronger position as compared to Vodafone, which almost has ratiod proportion between its latest liabilities and its current assets. Vodafones personal current and acid test ratio has reduced in the year 2011 and it before long has a ratio of 0.491 and a 0.481 current and acid test ratio. appurtenance Ratios Gearing ratios analyze the proportion of debt to equity at heart the financing of a company. These ratios illustrate as to how much a company is financed via and how much via equity. A company having more loans and less equity is said to be super geared and is considered to be more risky but having said that, it can never be sta ted that a low geared company is good, since it is considered to be taking less initiative, whence a balance is to be maintained. According to the calculated ratios, Qatar Telecom is highly geared as compared to Vodafone. The ratios clearly illustrates that the Qtels debt financing is 1.59 times its equity financing. Qtel has reduced its debt financing by paying off some of its debt as compared to the year 2010 but this has not been a significant reduction. Qtels debts almost amount to 61% (0.61) of their total assets, hence it can be seen that the company has heavily relied upon debts. Vodafone on the other hand has too little debt financing and it can be seen from the ratios that the company prefers equity financing over debt financing. As...By June 2008, Vodafone received was awarded telecom operating certify within the country, making the company as the second mobile phone service provider within the country. Vodafone started its services within Qatar on 1st March 2009.This r atio provides an idea to the investors as to the return that that would condense from the company. The return on investing for Qtel has betterd and has increased by 1.79% (5.82-4.03). Vodafones return on investment has also improved but the companys losses would not be able to film them give any good to their investors.Since both the companies operate within the same sector, a fair equivalence between the surgical procedures of the two would be more fruitful. The best technique available to analyze the financial performance of both the companies would be to use ratio analysis. There are various ratios which can be apply to evaluate the performance. Following are the ratios which have been calculated to assess the financial performance of both the telecom service providers. From the ratios, it can be derived that the financial performance of Qtel is way better than Vodafone but it can be argued that Vodafone is still within its early and growing phase and that the company has s hown good prospects, hence it can improve with the passage of time.