Analyse the Financial Situation of Singapore Telecommunications Limited
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1.1 Topic Chosen and Its Context
The topic of this report is analysis of the financial situation of Singapore Telecommunications Limited (SingTel). The analysis is primarily based on SingTels consolidated annual reports for the past three years from the FY2004 to FY2006.
I will analyse the companys financial situation by using some ratio analysis, such as profitability analysis, liquidity analysis, return on investors etc. I will try to find the underlying trends through the past and current performance, and take into account the non financial factors, competitors situation, economic environment and future forecast, to see the whole picture of the financial situation of SingTel. However, this report also has some limitations which will be discussed later.
Reasons for Choosing the Topic
The main reasons for me to choose to analyse the financial situation of Singapore Telecommunications Limited as my research topic were:
It is very important for the accountants to provide the financial information to the stakeholders for their decisions making. The selection, evaluation and interpretation of financial data and other pertinent information to assist in evaluating the operating performance and financial condition of a company or an industry. ( Peterson and Fabozzi ,1999 ) Financial situation analysis and forecast will provide investors the most important information about a company.
The study of ACCA provides me with a strong knowledge to do this financial situation analysis. The knowledge I have acquired in paper 2.4 (Financial Management and Control), paper 2.5 (Financial Reporting) and paper 3.6 (Advanced Corporate Reporting) would assist me to do a proper analysis. This report gave me a good chance to practice and help me to get a better understanding of the knowledge and also benefit me in my future career.
Singapore Telecommunications Limited is Asias leading communication group, operations and investments in more than 20 countries and territories around the world. SingTel is the largest company listed on the Singapore Stock Exchange (SGX).
The financial information of SingTel could be obtained easily from its website and SGX. The financial statements of SingTel have been audited by one of the leading international audit firm Deloitte & Touche, and thus considered reliable. This would make my analysis much easier and more accurate.
As one of the SingTels customers, its service was more familiar to me than other listed company. It was closer to my real life, so I have the interest to find out more about the financial situation of the company.
This report could help me to get a better knowledge of Singapores economic environment, especially