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Hi i have been trying to find some company that is not a part of group (As that makes comparison difficult) and is in the same country.I have sorted out two telecommunication companies (Company and comparator) I need advice if my comparator is relevant or not.
The company i have chosen is EE(everything everywhere) a subsidiary of british telecom.And Sky ltd(A subsidiary of Sky group) Both are telecommunication companies in the Uk. and are ranked in top ten.Although I don’t know to which extent that ranking is reliable
Kindly let me know if I can use these.
It sees you are from Pakistan.
Please find the below link of companies industry wise which are listed in Pakistan.
https://www.ksestocks.com/ListedCompanies/SortByName
Regards,
Hammad Ahmed Qureshi – OBU Registered Mentorhello, My question is that i am doing horizontal analysis of my pharmaceutical company on their consolidated financial statements, they have used constant exchange rates in their annual reports to find differences in their % figures, so do i also have to use CER or can i find out the yearly differences in % using normal way?
My second question is that, my competitor has published their annual reports in different currency, so how can i compare my company sales with them?
They are probably using a constant exchange rate so that any changes that would be entirely due to fluctuations in exchange rates are eliminated I.e. the differences and trends shown are completely down to performance. This can often give a truer picture of the results when it comes to judging management performance as by introducing exchange rates a factor totally beyond management’s control could mask the underlying trends especially if the rate has changed significantly. However if a significant part of the operations relies on foreign imports this might be a way of manipulating the figures to make them look better if the rate has changed adversely (e.g. it could make the costs look lower and thereby has made profit higher). It all rather depends on how they have chosen the constant rate, why they are using it and the overall effect on figures. Calculating your own figures, comparing the 2 sets and reading the management policies in relation to currencies might shed more light on the real motives.
For comparator purposes you must compare like with like and use the same basis for your calculations.
Regarding comparing revenues between companies using different currencies focus on the year on year growth and the real factors (strategic and those from the business environment) that have affected performance. Produce line graphs which will show the trend lines and place them close together to assist the marker and DON’T just throw numbers and percentages at them explain the factors!
Read my article on Evaluation and Analysis on our homepage where I set out the way to approach this.
Hello. I just want to ask a simple question. As we have to upload three years financial statements of our primary company, is it necessary to upload three years F/S for our competitor also or should i just upload the latest one year competitors F/S?
Another question is that what should we upload e.g. only Balance sheet and Profit and loss account or Is it necessary to upload statement of cash flows also?
If I want to analyse three years then how many year’s figures should I take? e.g. 2014, 2013, 2012 and 2011 or just 2014, 2013 and 2012?
Whether we should use comparative figures (restated) or should i take the figures from individual annual reports?
Dear Mentors,
I would need your help with the following:
I chose for topic 8 pharmaceutical company Novartis and as a benchmark Roche. They report in different currencies (USD&CHF) but as it was discussed already several times in this forum (thank you very much for that!) its not the issue as i will make ratio analysis. Both report under IFRS but auditors of Novartis indicated in the report that statements are prepared: “…in accordance with IFRS as issued by the International Accounting Standards Board and comply with Swiss law.”
Auditors of Roche (different audit firm) indicated that statements are prepared “….in accordance with IFRS and comply with Swiss law.”
I am confused as in Roche report there is no specification whether it is IFRS as issued by the IASB and auditors just didn’t mention that.
While reading requirements for SEC filing for non-US companies (https://www.iasplus.com/en/resources/regional/sec) I noticed that it was specifically indicated that “a foreign registrant may submit FS that conforms to US GAAP or FS that conform to IFRS as adopted by the IASB (that is, not jurisdictional adaptations of IFRSs), without need to provide a reconciliation to US GAAP”. Now I have concerns whether both companies are using the same variant of IFRS and can be compared easily without need to adjust the FS.
Thank you in advance…!You seem to be comparing like with like so I think you are worrying unnecessarily – stop looking for issues!
I can assure you thiis will be fine (anyway it is not as though you are producing a document that is to be examined in legal proceedings or your life depends on it) – so to use my usual turn of phrase in such situations: Chill baby, chill !… and good luck of course 😀 Trephena
Hi,
I am about to start preparing ratio calculation for my project. I am comparing ryanair vs easy jet. They have different year end, march and sept respectively. Mentor suggest me to compare annual accounts of ryanair to interim one of easy jet. is that correct approach?Thanks
This question has been asked and answered many times before. I suggest you go through ‘Using an Airline for Topic 8’ as you will not only find the answer but probably read lots of other useful information to help you
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My subject company and competitor have different reporting currencies. I do know that it is not a problem when comparing ratios but I still want them to be in the same currency as my subject company. Can someone guide me with how to convert the currency? i.e what rates to use average or year end
Please gu to https://opentuition.com/topic/using-an-airline-for-t8/page/11/
And scroll down to my answer to wynneleong
BTW I actually know of one instance where the student was failed on Understanding for converting currencies -the marker said by translating the student had shown they didn’t understand what the purpose of ratio analysis was…..
hello
I am planning to submit my RAP for this may submission. i have chosen topic 8 mobile telecommunications . Both companies have different year endings
Main company A – December 31
Competitor company B – March 31Should i be doing pro rata in order to analyse the financial data . or any other suggestion ?
Also for Company B – from April 2016 to December 2016 – un- audited financial statements have been produced on its website. but i cant take un – audited as this cant be accurate.
Company A has consolidated financial statements where as company B has Single entity FS. i have tried searching for unconsolidated statements but i am not able to have access. in such a case what should i do ? @Hammad Ahmed Qureshi – OBU Registered Mentor
Regards
NabsHELLO
i had to create a new topic because no one is actually replying to my queries properly. I am submitting project for May topic 8 mobile telecommunications . Main company year end is 31st December. can i take the financial statement of main company from the year 2013 to 2015 , because my comparetor has un audited financial data for nine months period to 31st december 2016. will that be ok ?
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First and foremost, The program requirement is that you use the last 3 financial reports that are available, or will be available, at the start of the submission period (Page-40 OBU information pack).
So you need to choose most recent audited financial data of the both target (main) company and comparator company. In your case, your main company financial data could be 1st Jan 2013 to 31 Dec 2015 (assuming that 31 Dec 2016 audited accounts is not available right now) and comparator company audited accounts is available up to 31 March 2016. Hence, its fine to continuing your analysis based on the above data I think, you don’t need to bother about 9 months un-audited financial data of comparator company.
@faysalrahaman so you mean to say that i can take un audited financial data of comparator . from 1st april 2016 to 31st dec 2016 ? the main company data is audited but it is consolidated . i am trying my level best to acquire unconsolidated data of main company. otherwise i will be having a very tough time. :/
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Agreed but It is more relevant to use audited financial data, though there is an limitation of using both audited and unaudited financial data.
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Just to complete the picture,you can use but need to clearly mention the limitation of used data.Furthermore,need to be aware about the use quantity of unaudited data.
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