Appraisal of Financial Performance of PTCL over the Period of 2005-2008

Abstract

Telecom industry of Pakistan has witnessed an extraordinary growth in last few years. Be they large or small, local or multinational, each organization is geared towards making its marks in highly competitive environment that is an outcome deregulation of telecom sector. For judging this, financial statement analysis with a focus on changes in ratios over time, ratios analysis and using these tools for horizontal and vertical analysis can yield important information about trends and relationship, the quality of a company’s earning, the strength and weaknesses of its financial positions. The current study selected PTCL for the purpose of applying varies tools of judging its performance covering a period of 4 years on the basis of data collected from annual reports, manuals and relevant books and publications .The major objective was to determine the nature and extent of the so-called pivot role which PTCL is expected to play as a lead firm in an oligopolistic market and thus setting bench-mark standards for other firms in the industry. The study employed a number of tools such as index analysis and common size analysis to assess and compare the performance of PTCL from year to year. These tools helped in judging the profile of PTCL with respect to liquidity, solvency, profitability position and market value over the study period of four years. Based on the application of these tools of financial analyses, the study revealed that the performance of PTCL has had major changes (turning points) in trends, amounts and relationships by calculation and comparison of ratios which are derived from the information in a company's financial statements.