CentumU

IGNOU Assignment
Principal of Accounting

2011

NAZIA PARVEEN (NAAZ)

Enrol. No-112162599

Principles of Accounting
Instructions: Students would carry a Plagiarism Check of the submitted document on VIPER and submit the report alongwith the assignment. He/She would also sign the Plagiarism Check statement on the cover page. Weightage will be given to critical evaluation or reflection on the problem / issue being analysed.

Questions:1(a):- Identify any two companies within a particular industry sector (Retail, Telecom or Media & Entertainment) such that one of the chosen companies is the Market Leader. Collect data about the two companies from secondary sources. Carry out a strategic financial analysis and make a Report giving analysis of the financial statement of the companies for FY 2009. The analysis should include:(100 Marks) A brief background of the industry sector in India, and of each of the two companies A SWOT analysis of each of the 2 companies Vertical Analysis of the financial statement Horizontal Analysis Analyse the companies on liquidity, profitability and solvency ratios (benchmark against the industry leader)

Part I.

Introduction:In India, Telecommunications network with 621.28 million connections is the third largest in the World and the second largest in Asia. Out of this the share of wireless subscribers stood at 584.32 million as compared to 391.76 million a year before. The growth was 192.56 million or 49.15% year on year. The rural market has reached the 190.88 million mark as against 111.63 million in the previous year excluding CDMA which works out to a growth of about 71% over last year. It was reported that 32.67% of total wireless subscribers are now in rural areas. The total numbers of wireline connections were 36.96 million while in the rural areas it stood at 9.93 million. The wireline segment has been stagnating or declining in the last few years but a positive aspect is that the decline has reduced from -3.69% to -2.65%. During the last year, though BSNL and MTNL have registered decline, private operators have jointly had a growth of 11.51% increasing the connections from 5.04 million to 5.62 million. The growth of subscriber base during the past decade (2000-2010) is indicated below.

Source: - Telecom Regulatory Authority of India

Telecom Industry has a big market potentiality and is a fast growing sector. Government of India is eager to reconstitute this telecom industry by enacting effective policies for more investments from foreign companies, which result in a very competitive and deregulated market in the world, there has been moderate growth.

Major achievements during the financial year 2009-2010 The total wireless subscriber base {GSM, CDMA and WLL (F)} stood at 584.32 million on 31st March 2010. The number of wireline subscribers on 31st March 2010 was 36.96 million. On an average, more than 15 million telephone subscribers were added every month during the financial year. The total number of PCOs in the country as on 31st March 2010 was 4.59 million and the number of VPTs was 0.58 million. The overall teledensity at the end of March 2010 was 52.74% as compared to 36.98% ending March 2009. The rural teledensity at the end of March 2010 was 24.29% as compared to 14.93% at the end of March 2009. There were 16.18 million Internet subscribers on 31st March 2010 as compared to 13.54 million on 31st March 2009. Besides the internet subscribers mentioned above, there are 117.87 million wireless data subscribers who are accessing internet through wireless (GSM and CDMA) networks. The number of Broadband connections on 31st March 2010 was 8.77 million compared to 6.22 million as on 31st March 2009. Source: - Telecom Regulatory Authority of India

History of Telecommunication Industry:History of Indian Telecommunications started in 1851 when the first operational land lines were laid by the government near Calcutta. Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control. The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year. The Government of India is now more focused on faster connectivity of rural-telephony in rural India and drafted its latest telecommunication policy to attract investments for the growth of Indian telecommunication industry. The latest telecommunication policy of India offers host of fiscal incentives and tax rebates to attract investors, both domestic and foreign investors. The era of post Liberalization of Indian Telecommunication Sector, witnessed formation of 'Department of Telecommunication' (DOT) and the 'Telecom Regulatory Authority of India' (TRAI). These two independent bodies operate in sync and under the guardianship of the Ministry of Telecommunication Government of India. These independent bodies have earned good reputation for transparency and competence of governance.

Source:images

http://www.aiu.edu/ /telecommunication.jpg

The main service providers in the Indian telecommunication sector are as follows State owned telecommunication companies like - VSNL, BSNL and MTNL Private Indian telecommunication companies like - Tata Tele services and Reliance communication, Bharti Airtel etc. Foreign telecommunication companies like - Idea Cellular, BPL Mobile, Spice Communications, Hutchison - Essar, Bharti Tele-Ventures, Escotel, etc

Objective:The main objectives of the telecommunication industry after the Liberalization of Indian Telecommunication Sector are as follows Creating world class telecommunication infrastructure to meet the requirements of growing Indian industries. Easy and affordable access to basic telecommunication services across India Establishing a modern and efficient telecommunication infrastructure to meet the requirements of modern industrial nation Modernization of the Indian telecommunication industry Provisions for entry of private players into the Indian telecommunication industry Provide an equal opportunity for all the telecommunication service providers operating in India

Source:http://image.shutterstock.com/display_pic_with_logo/168430/168430,1251651492,1/stock-phototelecommunications-industry-with-a-dark-world-map-36174772.jpg

Strengthening R&D in telecommunication sector

Efficient and transparent spectrum management Enabling efficient protection of the defence and security systems of the country Facilitating the Indian telecommunication companies to be at par with other global players Facilitate world class services at affordable prices Institutionalize the Department Of Telecommunication, to help them function as an independent corporate bodies To make telephone available on demand Facilitate reliable media to all telephone exchanges Facilitate high-speed data and multimedia connections Facilitation of world class service to all uncovered and rural areas of

The Company chosen is Bharti Airtel as a market leader and 2nd company is Tata Communication both are From Telecom Sector. Introduction Bharti Airtel:Bharti Airtel Ltd is a leading global telecommunications company with operations in 19 countries across Asia and Africa. It was founded in 1995, and the founder of the company is Sunil Bharti Mittal and now Chairman & managing director of the company is Sunil Bharti Mittal. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. Bharti Airtel has been ranked among the six best performing technology companies in the world by business week. bharti airtel had 200 million customers across its operations.

Source: - www.airtel.in

Bharti Airtel is the flagship company of Bharti Enterprises. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. It has recently forayed into the DTH space. All these services are provided under the Airtel brand. Bharti Infratel provides passive infrastructure services and has a 42% stake in Indus towers.

Background of Bharti Airtel:Bharti Airtel Ltd was incorporated in the year 1995 with the name Bharti Tele-Ventures Ltd. The company was promoted by Bharti Telecom Ltd, a company incorporated under the laws of India. The name of the company was changed from Bharti Tele-Ventures to Bharti Airtel Ltd with effect from April 24, 2006. In 1995-96, the company launched mobile services under the brand name 'Airtel' for the first time in Delhi and Himachal Pradesh The company and Videsh Sanchar Nigam Ltd entered into an agreement to share the company's national long distance network for a period of 15 years for a consideration of Rs. 5,000 million. In 2005-06, they entered into an agreement with Nokia to expand their managed GSM/ GPRS/ EDGE networks in eight circles. In 2006-07, the company incorporated seven wholly owned subsidiaries namely Bharti Airtel (USA) Ltd, Bharti Airtel (UK) Ltd, Bharti Airtel (Hong Kong) Ltd and Bharti Airtel (Canada) Ltd, Bharti Infratel Ltd, Bharti Telemedia Ltd and Bharti Airtel Lanka (Pvt) Ltd. In March 2007, they introduced BlackBerry 8800TM business phone. With this, the company has become the first Indian brand to go truly global with a footprint that covers over 1.8 billion people. Also, the company has become a major Indian MNC with operations in 18 countries across Asia and Africa with a customer base of over 180 million.

Part II S.W.O.T. Analysis of Bharti Airtel:Strengths: Bharti Airtel has more than 65 million customers. It is the largest cellular provider in India, and also supplies broadband and telephone services as well as many other telecommunications services to both domestic and corporate customers. Airtel have its own towers, which is a particular strength of some of the company. Towers are important if the company wishes to provide wide coverage nationally. Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world. The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.

Weaknesses: An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field. The fact that the Airtel has not pulled off a deal with South Africas MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.

Opportunities: The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian for Google. Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions. Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.

Threats: Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors. Bharti Airtel could be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market. Airtel comes to you from Bharti Airtel Limited, India's largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU's) - Mobile Services, Airtel Telemedia Services & Enterprise Services.

The 2nd Company chosen by me is Tata Communication from Telecom Sector.

The global reach and industry expertise of Tata Communications drives and delivers a new world of communications. The company leverages its Tata Global Network, vertical intelligence and leadership in emerging markets to deliver value-driven, globally managed solutions. Source:- Tata website

Introduction Tata Communication:Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. The Tata Global Network includes one of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and colocation space worldwide. Tata Communications' depth and breadth of reach in emerging markets includes leadership in Indian enterprise data services, leadership in global international voice, and strategic investments in operators in South Africa (Neotel), Sri Lanka (Tata Communications Lanka Limited), and Nepal (United Telecom Limited). Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and its ADRs are listed on the New York Stock Exchange. Source:- Tata website

Background of Tata Communication:Tata Communications Ltd is a part of the Tata Group, Tata Communication is an Indian company, its headquarters at Mumbai. It was established in 1868 and the founder of the company was Jamsetji Tata and it was incorporated in 1986 as Videsh Sanchar Nigam Ltd. Ratan Tata is the Chairman of Tata Sons and Tata Promoter Company. In 1994, the company had a co-operation with British Telecom,

UK and launched the Concert Packet Service (CPS) for Indian customers. The company started providing Internet access services in August of the year 1995, provided access to the Internet in Mumbai, Chennai, New Delhi, Calcutta, Bangalore and Pune and also a dominant commercial provider of access to the Internet in India. Tata Communications has introduced the Universal Connect' services jointly with TMI (Tele Media International) a wholly owned subsidiary of Telecommunications Italia. The Company introduced a video conferencing service (both domestic and international) through studios located at the Company's international gateways at Mumbai, New Delhi, Calcutta and Chennai.
In 1996, The Company is the exclusive provider of public

international telecommunication services in India, linking the domestic Indian telecommunications network to 236 territories worldwide. The Company has marked out a capital expenditure of Rs 2,000 crore for 2001-02 which will be broadly allocated among it's direct-to-home and domestic long-distance projects as well as acquisition of extra bandwidth among other areas. Tata Communications, a leading provider of the new world of communications, today announced the launch of its IP Exchange (IPX)solution, which will enable mobile service providers to seamlessly and efficiently route all communication traffic, including voles, IP and signalling solutions, via one IP pipe while supporting end-to-end QoS, security, multilateral connectivity, and cascading payments.

SWOT Analysis of Tata Communication:Strengths: resources and capabilities (People and Raw Material) vast experience (steel and automobiles) The business model. (TBEM is a model determining the quality movement in the

Weaknesses: Distribution value chain innovation macro environment In order to serve the global markets with high quality and low price.

Opportunities: new markets exports Acquisitions e.g. jaguar and land rover

Threats
Indias recent mergers of global mergers of global markets E.g. Vodafone, Reliance

Part III... Vertical Analysis of the Financial Statement (Bharti Airtel)

Balance Sheet of Bharti Airtel

Mar '09 Sources Of Funds Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Mar '10 % of total assets/liabilities 2009 2010

1,898.24 1,898.77 116.22 186.09 0 0 25,627.38 34,650.19 2.13 2.13 27,643.97 36,737.18 51.73 39.43 7,661.92 4,999.49 7,713.65 5,038.92 35,357.62 41,776.10

78.184 87.938 0.146 0.094 21.670 11.967 21.816 12.062 100.000 100.000

37,266.70 12,253.34 25,013.36 2,566.67 11,777.76 62.15 2,550.05 153.44 2,765.64 5,602.83 2,098.16 10,466.63 0 13,832.49 634.4 14,466.89 -4,000.26 0.09 35,357.62

44,212.53 16,187.56 28,024.97 1,594.74 15,773.32 27.24 2,104.98 54.89 2,187.11 6,276.12 761.86 9,225.09 0 12,183.25 658.75 12,842.00 -3,616.91 0 41,776.12

105.399 105.832 34.655 38.748 70.744 67.084 7.259 3.817 33.310 37.757 0.176 0.065 7.212 5.039 0.434 0.131 7.822 5.235 15.846 15.023 5.934 1.824 29.602 22.082 0.000 0.000 39.122 29.163 1.794 1.577 40.916 30.740 -11.314 -8.658 0.000 0.000 100.000 100.000

Vertical Analysis of the Financial Statement (Tata Communication)

Balance Sheet of Tata Communications

Mar '09 Sources Of Funds Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Mar '10 % of Total Assets/Liabilities 2009 2010

285 0 0 6,513.05 0 6,798.05 1,288.82 1,039.05 2,327.87 9,125.92

285 0 0 6,995.78 0 7,280.78 1,281.76 1,357.15 2,638.91 9,919.69

74.492 14.123 11.386 25.508 100.000

73.397 12.921 13.681 26.603 100.000

Application Of Funds Gross Block 5,890.00 Less: Accum. Depreciation 1,792.06 Net Block 4,097.94 Capital Work in Progress 536.38 Investments 2,723.67 Inventories 1.56 Sundry Debtors 1,342.22 Cash and Bank Balance 109.21 Total Current Assets 1,452.99 Loans and Advances 3,209.51 Fixed Deposits 263.16 Total CA, Loans & Advances 4,925.66 Deffered Credit 0 Current Liabilities 2,869.12 Provisions 288.61 Total CL & Provisions 3,157.73 Net Current Assets 1,767.93 Miscellaneous Expenses 0 Total Assets 9,125.92

6,820.94 2,316.14 4,504.80 386.15 2,501.30 1.25 632.29 102.9 736.44 4,042.38 7.96 4,786.78 0 2,084.67 174.67 2,259.34 2,527.44 0 9,919.69

64.541 19.637 44.904 5.878 29.845 0.017 14.708 1.197 15.922 35.169 2.884 53.974 0.000 31.439 3.163 34.602 19.373 0.000 100.000

68.762 23.349 45.413 3.893 25.216 0.013 6.374 1.037 7.424 40.751 0.080 48.255 0.000 21.015 1.761 22.776 25.479 0.000 100.000

Horizontal Analysis of the Financial Statement (Bharti Airtel)

Balance Sheet of Bharti Airtel

Mar '09 Sources Of Funds Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Mar '10
Change in Assets/Liabilities

1,898.24 1,898.77 116.22 186.09 0 0 25,627.38 34,650.19 2.13 2.13 27,643.97 36,737.18 51.73 39.43 7,661.92 4,999.49 7,713.65 5,038.92 35,357.62 41,776.10

-9093.210 12.300 2662.430 2674.730 -6418.480

-32.894 23.777 34.749 34.675 -18.153

Application Of Funds Gross Block 37,266.70 Less: Accum. Depreciation 12,253.34 Net Block 25,013.36 Capital Work in Progress 2,566.67 Investments 11,777.76 Inventories 62.15 Sundry Debtors 2,550.05 Cash and Bank Balance 153.44 Total Current Assets 2,765.64 Loans and Advances 5,602.83 Fixed Deposits 2,098.16 Total CA, Loans & Advances 10,466.63 Deffered Credit 0 Current Liabilities 13,832.49 Provisions 634.4 Total CL & Provisions 14,466.89 Net Current Assets -4,000.26 Miscellaneous Expenses 0.09 Total Assets 35,357.62

44,212.53 16,187.56 28,024.97 1,594.74 15,773.32 27.24 2,104.98 54.89 2,187.11 6,276.12 761.86 9,225.09 0 12,183.25 658.75 12,842.00 -3,616.91 0 41,776.12

-6945.830 -3934.220 -3011.610 971.930 -3995.560 34.910 445.070 98.550 578.530 -673.290 1336.300 1241.540 0.000 1649.240 -24.350 1624.890 -383.350 0.090 -6418.500

-18.638 -32.107 -12.040 37.867 -33.925 56.171 17.453 64.227 20.918 -12.017 63.689 11.862 0.000 11.923 -3.838 11.232 9.583 100.000 -18.153

Horizontal Analysis of the Financial Statement (Tata Communication)

Balance Sheet of Tata Communications

Mar '09 Sources Of Funds Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Mar '10
Change in Assets/Liabilities

285 0 0 6,513.05 0 6,798.05 1,288.82 1,039.05 2,327.87 9,125.92

285 0 0 6,995.78 0 7,280.78 1,281.76 1,357.15 2,638.91 9,919.69

7280.780 1281.760 1357.150 2638.910 9919.690

107.101 99.452 130.615 113.362 108.698

Application Of Funds Gross Block 5,890.00 Less: Accum. Depreciation 1,792.06 Net Block 4,097.94 Capital Work in Progress 536.38 Investments 2,723.67 Inventories 1.56 Sundry Debtors 1,342.22 Cash and Bank Balance 109.21 Total Current Assets 1,452.99 Loans and Advances 3,209.51 Fixed Deposits 263.16 Total CA, Loans & Advances 4,925.66 Deffered Credit 0 Current Liabilities 2,869.12 Provisions 288.61 Total CL & Provisions 3,157.73 Net Current Assets 1,767.93 Miscellaneous Expenses 0 Total Assets 9,125.92

6,820.94 2,316.14 4,504.80 386.15 2,501.30 1.25 632.29 102.9 736.44 4,042.38 7.96 4,786.78 0 2,084.67 174.67 2,259.34 2,527.44 0 9,919.69

6820.940 2316.140 4504.800 386.150 2501.300 1.250 632.290 102.900 736.440 4042.380 7.960 4786.780 0.000 2084.670 174.670 2259.340 2527.440 0.000 9919.690

115.805 129.245 109.928 71.992 91.836 80.128 47.108 94.222 50.684 125.950 3.025 97.180 0.000 72.659 60.521 71.549 142.960 0.000 108.698

Part V.......

Benchmark Analysis of Bharti Airtel & Tata Communication

2009 Profitability Ratios
Operating Profit Margin(%) of Bharti Airtel Operating Profit Margin(%) of Tata Comm. 38.74 22.7 39.08 23.32 28.04 5.26 28.15 5.46 35.25 15.38 35.25 15.38 26.36 14.47 26.36 14.47 23.86 2.98 25.79 6.63

2010

Profit Before Interest And Tax Margin(%) of Bharti Airtel 29.12 Profit Before Interest And Tax Margin(%) of Tata Comm. 10.94 Gross Profit Margin(%) of Bharti Airtel Gross Profit Margin(%) of Tata Comm. Cash Profit Margin(%) of Bharti Airtel Cash Profit Margin(%) of Tata Comm. Adjusted Cash Margin(%) of Bharti Airtel Adjusted Cash Margin(%) of Tata Comm. Net Profit Margin(%) of Bharti Airtel Net Profit Margin(%) of Tata Comm. Adjusted Net Profit Margin(%) of Bharti Airtel Adjusted Net Profit Margin(%) of Tata Comm. Return On Capital Employed(%) of Bharti Airtel Return On Capital Employed(%) of Tata Comm. Return On Net Worth(%) of Bharti Airtel Return On Net Worth(%) of Tata Comm. 29.33 11.36 36.96 15.42 36.96 15.42 22.58 13.25 22.58 13.25 28.4 6.23 28.13 7.58

2009 Profitability Ratios

Adjusted Return on Net Worth(%) of Bharti Airtel Adjusted Return on Net Worth(%) of Tata Comm. 33.74 2.57

2010
23.27 -0.84 96.24 255.47 96.25 255.47 24.36 3.02

Return on Assets Excluding Revaluations of Bharti Airtel 145.01 Return on Assets Excluding Revaluations of Tata Comm. 238.53 Return on Assets Including Revaluations of Bharti Airtel 145.02 Return on Assets Including Revaluations of Tata Comm. 238.53 Return on Long Term Funds(%) of Bharti Airtel Return on Long Term Funds(%) of Tata Comm. 29.01 6.67

Liquidity And Solvency Ratios

Current Ratio of Bharti Airtel Current Ratio of Tata Comm. Quick Ratio of Bharti Airtel Quick Ratio of Tata Comm. Debt Equity Ratio of Bharti Airtel Debt Equity Ratio of Tata Comm. Long Term Debt Equity Ratio of Bharti Airtel Long Term Debt Equity Ratio of Tata Comm. 0.69 1.31 0.65 1.52 0.28 0.34 0.26 0.26 0.68 2.01 0.72 2.08 0.14 0.36 0.12 0.35

Analysis:After calculating the benchmark analysis we found that the financial performance of Bharti Airtel is very high according to Tata Communication. In Net Profit Margin there is big distance in both companies. See in all the ratios there is not any competition because the performance of Bharti Airtel is very high and it is a market leader company in their industry.

Market Share of wireless service provider (as on 31st march, 2010)

Source: - Telecom Regulatory Authority of India The market share of telecom industry indicates that the Bharti Airtel have 21.84% share (highest market share) & Tata Communication have only 11.29% share (appox. Half of the Airtel) it shows that Bharti Airtel is the biggest telecom industry in rural & urban market.

Conclusion:In conclusion, Bharti Airtel is the biggest company in Indian market and it has highest market shares. Bharti Airtel has been ranked among the six best performing technology companies in the World by business week. The performance of Tata Communication is also good but not more than Bharti Airtel. The Bharti Airtel is the largest cellular provider in India, and also supplies Broadband and telephone service. Bharti Airtel had 200 million customers across its operation and have its own tower, thats why it have good network according to others. In my analysis the Bharti Airtel is the Indias largest telecom company.

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Books:Management Accounting (Text problem & cases) by M.Y. Khan & P.K.Jain Accounting for Manager by horngren