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Accounting and Finance

Name

Professor

Institutional Affiliations

Course

Date
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Introduction

In this project, the focus is specifically on Batelco, which is one of the major firms in the
telecommunication industry. We have investigated how Batelco stands financially and
strategically. We will also try to find insights on its operations and market position from its
financial documents and performance metrics. Financial analysis is important, as it helps grasp
more than just the numbers, revealing how Batelco competes, makes money, and takes care of
resources. Therefore, the study will critically review Batelco's income statement, balance sheet,
and financial ratios for one year.

The findings shall be compared with standards in the industry to establish Batelco's
performance. This, however, approach will not at all show any light on financial health in
isolation; instead, it will even show light on those areas that need to be strengthened and others
that need to be improved. From this detailed analysis, we aimed to present a comprehensive
overview of Batelco's current standing and its potential to grow. This is essential for
understanding Batelco's place in the competitive landscape of telecommunications.

Profile of the Company

Batelco, short for Bahrain Telecommunications Company, has become the highest
example of modern evolution in the Middle East telecommunications sector. Batelco was started
in the Kingdom of Bahrain but has extended its services far beyond the borders of any nation.
Today, it is regarded as one of the key and serious players on the global map of
telecommunications services providers.

The company started with the central idea of providing telephone services across
Bahrain; however, they soon realized that in this ever-globalizing world, many opportunities
were beckoning. This gives an overview of the diversification of services offered by Batelco
over the years (Fayyad & Al-Nazir, 2023). The company offers a range of telecommunications
services, including fixed-line, high-speed internet, and digital television services.

The Batelco decision was based on strategic initiatives. Expansion and moving into
several countries have been sought through mergers and acquisitions by forming different
partnerships (Naim & Al, 2021). This has expanded Batelco's market reach geographically and
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diversified its revenue stream, making the company less vulnerable to market fluctuations in any
single region. Further, from its very inception, Batelco has invested in the latest technologies to
enhance the provision of its services through improved customer service and operational
efficiency. The company's innovation has also set it up as the regional leader in deploying new
technology and 5G services.

Understanding Batelco's journey and strategic positioning is essential for analyzing its
financial performance. It sets a solid base for the possibility of financial strength and growth of
the possibility in terms of the ability of the company to adjust to the dynamics of the markets,
driven by technology changes at a rapid pace, and along with the strategic investment to explore
potential international markets and focus on customer-centric services. The setting will help one
evaluate the financial figures of Batelco with more sense added to the operational strengths and
challenges.

Financials

Our analysis is bound to the financial landscape of Batelco and is based on the three pivot
areas: statement, balance sheet, and financial ratio analysis. Our analysis is bound to give a
unique look into the company's fiscal health and operational effectiveness.

Income Statement Analysis

To calculate the percentage increase in profit and basic earnings per share (EPS), you can
use the following formulas:

Percentage Increase = ((New Value - Old Value) / Old Value) * 100

Percentage Increase in Profit:

Old Profit (2021) = BD 65,891,000

New Profit (2022) = BD 70,324,000

Profit Growth (%) = ((70,324,000 - 65,891,000) / 65,891,000) * 100

≈ (4,433,000 / 65,891,000) * 100

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≈ 0.067 * 100

≈ 6.73%

Percentage Increase in Basic Earnings per Share (EPS):

Old EPS (2021) = 39.8 fils

New EPS (2022) = 42.5 fils

Percentage Increase = ((42.5 - 39.8) / 39.8) * 100

≈ (2.7 / 39.8) * 100

≈ 0.067 * 100

≈ 6.78%

Balance Sheet Analysis

The analysis of the balance sheet shows an increase in non-current assets from BD
517,656,000 in 2021 to BD 566,334,000 in 2022, equating to an absolute increase of BD
48,678,000.

Increase in Non-current Assets from 2021 to 2022

Non-current Assets for 2021: BD 517,656,000

Non-current Assets for 2022: BD 566,334,000

Percentage Increase = ((566,334,000 - 517,656,000) / 517,656,000) * 100

≈ (48,678,000 / 517,656,000) * 100

≈ 0.094 * 100

≈ 9.40%

Financial Ratio Analysis

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Current Ratio for 2022

Calculation:

Current Ratio= Current Assets/ Current Liabilities

Given:

Current Assets for 2022: BD 231,630,000

Current Liabilities for 2022: BD 230,105,000

Current Ratio= 231,630,000/ 230,105,000

= 1.007

Accounts Receivable Turnover

Accounts Receivable Turnover= Total Credit Sales/Average Accounts Receivable

Given Total Credit Sales (hypothetical): BD 300,000,000

Average Accounts Receivable= Accounts Receivable 2021 + Accounts Receivable 2022

=83,201,000 +91,203,000

= BD 87,202,000
Accounts Receivable Turnover =300,000,000

87,202,000

= 3.44
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Here’s a table summarizing the calculated financial ratios and key figures based on the
provided financial information for Bahrain Telecommunications Company BSC for the year
2022:

Financial Metric Value Unit Remarks

Income
Statement
Analysis
Profit for 2022 70,324,000 BD Indicates net profit attributable to equity holders
Profit Growth 6.73% Percentage growth in profitability
from 2021 to
2022
EPS for 2022 42.5 Fils Earnings per share

EPS Growth 6.78% Percentage Increase in earnings per share

from 2021 to
2022
Balance Sheet
Analysis
Non-current 566,334,000 BD Increase suggests capital investments
Assets in 2022
Increase in Non- 48,678,000 BD Growth in non-current assets
current Assets
Percentage 9.40% Percentage Indicates investment or asset acquisition
Increase in Non-
current Assets
Financial Ratio
Analysis
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Current Ratio for 1.007 Ratio Measures short-term liquidity

2022
Accounts 3.44 Times Efficiency in collecting receivables
Receivable
Turnover

Conclusion

A complete and detailed study that defines an overall appraisal in detail of the financial
performance of Batelco under herein entered frameworks is out of the scope of the study format
as follows. At this level, either in the academic or professional realm, because it requires depth,
the only observable ideals, we would only be able to systematically analyze data using scholarly
methodologies and frameworks to build a strong and comprehensive evaluation.

Against this backdrop, the different analyses of the Batelco annual reports of the
company, the leading industry standards, and the financial trends will be included in the present
study, along with a critical analysis of the findings.

This would lead to the analysis of the income statement, at the start of which comes a check on
revenue growth and how effectively Batelco manages to churn its profit. Where the balance sheet
gives insights into the stability of a company through its asset management and how much
portion of the total money comes from the various sources, ratio analysis would, therefore, give
quantified results of benchmarking its operational efficiency, liquidity, solvency, risk, and
overall health of Batelco against these metrics. Such a relative measure of Batelco will be
compared with industry standards.

Besides, the review should allow for determining strategies concerning their consistency
and relationship and examine how strategies reflect the company's strength. This will include a
comparison of the varied strategies regarding diversification, technological investments, and the
efforts to resume market expansion in the company. The other environmental conditions to check
are regulatory, competitive dynamics, and economic conditions, which shape financial
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performance. Based on the above aspects in the conclusion, a synthesis will offer a clear
perspective regarding Batelco's financial well-being and strategic placement.

As such, the strong areas under consideration will be outlined, and the issues through
consideration of which focus of light and future research or some other strategic demands is
likely to get in the conclusion will be flagged and suggested. These would clear off a reflection
on a deep engagement with Batelco's financial data but also point towards the markets and larger
inclination of industries, leading to much more informed and critical debate with prospective
challenges that face the company regarding its prospects within the said industries. With an
analysis so broad in perspective, such collaboration with areas of expertise in finance, experts
from the industries, and best-of-breed from academia would certainly add to giving the work
quality and depth of analysis that the evaluation may have for keeping a balanced and well-
rounded perspective of what Batelco is all about in its financial and strategical passage.

REFERENCES
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Awadhi, J., Obeidat, B., & Alshurideh, M. (2021). The impact of customer service digitalization
on customer satisfaction: Evidence from telecommunication industry. International
Journal of Data and Network Science, 5(4), 815–830.
https://m.growingscience.com/beta/ijds/5335-the-impact-of-customer-service-
digitalization-on-customer-satisfaction-evidence-from-telecommunication-industry.html

Fayyad, M. I., & Al-Nazir, R. (2023). Inequality of bargaining power in cellular

telecommunication services agreements. Telecommunications Policy, 102540.
https://doi.org/10.1016/j.telpol.2023.102540

Naim, L. M., & Al, E. (2021). The Effects of Switching Barriers on Customer Loyalty in
Telecommunication Services in the Kingdom of Bahrain. Turkish Journal of Computer
and Mathematics Education (TURCOMAT), 12(9), 3272–3281.
https://doi.org/10.17762/turcomat.v12i9.5478

Ng, E., Tan, B., Sun, Y., & Meng, T. (2022). The strategic options of fintech platforms: An
overview and research agenda. Information Systems Journal, 33(2).
https://doi.org/10.1111/isj.12388

Zhang, Y., Lu, Y., Mao, H., Huang, J., Zhang, C., Li, X., & Dai, R. (2023, April 1). Company
Competition Graph. ArXiv.org. https://doi.org/10.48550/arXiv.2304.00323
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