Financial analysis of Czech Telecom (Český telecom, a.s.)

21 May

Using the figures of fiscal years 2000–2002 the analysis summarizes the key financial indicators and predicts their changes in the consequent periods. It considers two alternative scenarios of future developments distinguished by Czech Telecom’s (CTc’s) successful acquisition of the residual share in the mobile operator Eurotel. CTc’s stock price at the Prague Stock Exchange is also examined. The CAPM coefficient beta is estimated using simple regression on PX50 index. DDM and FCFF models are used for stock valuation. Furthermore, the analysis compares CTc’s results to those of other major telecommunication operators.

Please note, that the assignment focuses on the analysis of financial statements, ratio comparison and application of valuation models rather then the regression. A solid regression would necessarily require a verification of assumptions and a prospective use of appropriate robust methods.

Contents

Core spreadsheet

Financial statements survey

  • Income statement
  • Balance sheet
  • Cash flow statement

Profitability, liquidity and financial structure ratios

  • Past, current and projected
  • Graphs comparing two alternative scenarios

Stock market and price ratios

Comparison of CTc with other telecoms

  • Price ratios: Overview and methodology
  • Price ratios: Charts
  • Other ratios: Overview and methodology
  • Other ratios: Evaluation
  • Other ratios: Charts

DuPont Diagram

Free Cash Flow to the Firm (FCFF) and Dividend Discount Model (DDM)

Regression

Commentary, Part 1 (PDF)

  • General information
  • Analysis of external environment
  • SWOT analysis

Commentary, Part 2 (PDF)

  • Assumptions
  • Financial statements projection 2003–2006
  • Ratios projection 2003–2006
  • Valuation ratios and models

Files

Financial analysis of Czech Telecom (core spreadsheet)
Title: Financial analysis of Czech Telecom (core spreadsheet) (839 clicks)
Caption: Financial analysis of Czech Telecom (core spreadsheet)
Filename: financial_analysis_ctc.xls
Size: 920 KB

Financial Analysis of Czech Telecom (commentary, part 1)
Title: Financial Analysis of Czech Telecom (commentary, part 1) (1045 clicks)
Caption: Financial Analysis of Czech Telecom (commentary, part 1)
Filename: financial_analysis_ctc_1.pdf
Size: 155 KB

Financial Analysis of Czech Telecom (commentary, part 2)
Title: Financial Analysis of Czech Telecom (commentary, part 2) (926 clicks)
Caption: Financial Analysis of Czech Telecom (commentary, part 2)
Filename: financial_analysis_ctc_2.pdf
Size: 95 KB

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