Group Members Huddie Namo Michael Haapio Wilson Maeriua Sera Vosaroqo George Tasra

Fiji One Online

 Background of Fiji Television Limited Methodology of Research Discussion of Selected Analysis Liquidity Ratio Analysis Asset Efficiency Ratio Analysis Capital Structure Ratio Analysis Profitability Ratio Analysis Market Performances Recommendations/Conclusions

 Formed in 1994 as the first permanent broadcasting television company in the Fiji Fiji TV owns Fiji's channel Fiji One, and the pay TV services Sky Fiji and Sky Pacific Fiji TV also owns two subsidiary companies, Media Niugini Ltd and Communications Pacific Limited who operates the Papua New Guinea's EM TV network Fiji TV was listed as a public company in 1996 on the Suva Stock Exchange, now known as the South Pacific Stock Exchange

 The Group has searched the South Pacific Stock Exchange registry (site) for information on the Fiji Television Limited The Group also collected secondary information about the Company through the internet and annual reports Review the Annual Reports selected critical issues and compute the relevant Financial Ratios

 The Group has convinced that the following ratios are critical to any effective and meaningful analysis of the performance of Fiji TV Limited :
Liquidity Ratio Analysis Asset Efficiency Ratio Analysis Capital Structure Ratio Analysis Profitability Ratio Analysis Market Performances We therefore shall discus them in turn

Liquidity Ratio Analysis

3.50

3.00

Ratio

2.50

2.00

1.50

1.00

0.50

0.00 Current ratio Quick ratio

2006 2.12 1.99

2007 1.68 1.43

2008 2.11 1.88

2009 2.05 1.92

2010 2.96 2.88

Years

Years Current ratio Quick ratio

2006 2.12 1.99

2007 1.68 1.43

2008 2.11 1.88

2009 2.05 1.92

2010 2.96 2.88

Within the past 5 years, Fiji TV has generally recorded current and quick ratios above the generally accepted benchmark of 1.5 and 1respectively which is very good.

Its current ratio stands on average of 2.1, while its quick ratio at 2.0. The above analysis shows that Fiji TV is able to repay its immediate/short term liquidity commitments should is necessary.
Compared to TVNZ, Fiji TV liquidity ratio is more or less similar, which we believe Fiji TV is performing well in the TV industry within the region. NZTV has an average Liquidity ratio of 2.2 also within the given period

120.00

100.00

80.00

Days

60.00

40.00

20.00

Accounts receivables turnover( days)

2006 67.66

2007 75.52

2008 80.18

2009 97.90

2010 68.38

Years

Years Accounts Receivables Turnover (Days)

2006

2007

2008

2009

2010

67.66

75.52

80.18

97.90

68.38

From the accounts receivable ratio analysis, we found that the turn over ratio in number of days is on average 77( 2.6 months) which is very poor for this business type
This is relatively high for this business type. As a rule of thumb accounts receivable should be realized within one month or lesser if no stiff competition This demonstrates that there is poor management in terms of debt recovery. This also means that a lot of current assets are not being recovered in a timely manner to be utilized in the financial operations of the company

Total assets turnover (times)

1.20

1.00

0.80

Ratio

0.60

0.40

0.20

Total assets turnover (times)

2006 0.93

2007 1.02

2008 1.02

2009 0.95

2010 1.12

Years

 The graph for the asset turnover fluctuates from 0.93 in 2006 to 1.02 in 2007 and 2008 respectively. It declines in 2009 to .95 and increases to 1.12 in 2010 This indicates that the Asset Turn over within a given period is estimated at 1:1. Although this is generally Good it would better if the turn asset turn over is greater, meaning the management is able to utilize every 1 $ in asset to generate $1 in profit.

90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 2006 2007 Total debt to equity ratio (%) 2008 Total debt ratio (%) 2009 Total equity ratio (%) 2010

 The debt ratio on average is 25% which is less than 50% therefore most of the companys assets is being funded by equity The total asset to equity fluctuates between 77.40 in 2006 to 79.24 in 2010. This means that a lot of assets being funded from share holders equity

The generally accepted benchmark for this is 50% thus we are of the opinion that the Fiji TV limited is performing very good in funding its assets.

25.00

20.00

Percentage

15.00

10.00

5.00

0.00
Net profit margin (%) [before tax] Return on assets (%) [before tax] Return on equity (%) [before tax]

2006 10.12 9.46 19.98

2007 6.04 6.19 5.00

2008 12.67 12.91 13.99

2009 9.06 8.65 3.49

2010 18.89 21.21 15.59

 The profitability ratio trend of Fiji TV shows a fluctuating pattern. This demonstrates inconsistency in the ability of Fiji TV to maximize profit from the use of its assets. In some years 2007 and 2009 the profitability ratio was on a downward phase as opposed to 2006, 2008 and 2010 where it was on an inclining phase. This demonstrates that although the company has the ability to generate profit from the use of its assets as shown by the increasing revenue, there is no control over expenditure. No adequate control over expenditure is shown by the rising expenditure trend affecting the profitability. We have the opinion that the company is performing well but needs to improve to control its expenses to improve its profitability.

0.40 0.35 0.30 0.25

0.20
0.15 0.10 0.05 2006 2007 Earnings per share (EPS) 2008 2009 Dividend per share (DPS) 2010

 The dividend per share remained constant at 0.18 from 2006 to 2009, it then decline to 0.10 in 2010 The earnings per share fluctuated through out the five year period, in 2006 recorded 0.35 EPS, in 2007 it went further down to 0.08, 0.26 in 2008, dropped to 0.06 in 2009 and recorded 0.31in 2010 This implies there was volatility in the TV industry thus impacted on the inconsistent trend with its market performance analysis

 Although Fiji TV is performing well with its revenue it needs to better manage its expenses and liabilities to ensure its assets yield the maximum profit. It is recommended that Fiji TV should ensure that there is better accounts receivable systems in place. The accounts receivable turnover should be reduced to from current 2.6 months to least one month.