Presented to: Dr. Ashraf Ibrahim

Case Study 2005-2006

Mobinil ProfileMobinil Profile

Since its inception in May 1998, Mobinil has strived to maintain its position as the leading Mobile service operator in Egypt. Mobinil is committed to being the leading Mobile service provider in Egypt, providing the best quality service for the customers, the best working environment for the employees, top value for the shareholders, and proudly contributing to the development of the community.

Common Size analysisCommon Size analysis

• The Assets Inventory: ↑ 30% in 2006.

Accounts receivable: ↑ 43% in 2006.

Cash on hand & in bank: ↓ 35% in 2006.

Total current assets: ↑ 5% in 2006.

Fixed assets: ↑ 26% in 2006.

Projects under construction: ↑ 28% in 2006.

Investments: ↓ 13% in 2006.

Total fixed assets: ↑ 16% in 2006.

Total assets: ↑ 14.5% in 2006.

The Balance Sheet

Common Size analysis Common Size analysis (cont.)(cont.)

• The Liabilities: Accounts payable: ↑ 27% in 2006.

Accrued expenses: ↓ 50% in 2006.

Total current liabilities: ↑ 14% in 2006.

Long term liabilities: ↑ 24% in 2006.

• Long liabilities / total liabilities and shareholders’ equity ↑ 2.15% in 2006.

The Balance Sheet

Common Size analysis Common Size analysis (cont.)(cont.)

• The shareholders’ equity: Retained earnings / total liabilities & shareholders’ equity: ↑ 0.11% in 2006.

Reserves / total liabilities & shareholders’ equity: ↑ 0.36% in 2006.

Total shareholders’ equity / total liabilities & shareholders’ equity: ↓1.7% in 2006.

Total equity: ↑ 6% in 2006.

The Balance Sheet

Common Size analysisCommon Size analysis

Operating revenue: ↑ 19% in 2006.

Cost of service: ↑ 25% in 2006.

Gross profit: ↑ 17% in 2006.

Depreciation: ↑ 30% in 2006.

General & administrative expenses: ↑ 50% in 2006.

Operating profit: ↑ 5% in 2006.

Other incomes: ↓ 30% in 2006.

Other expenses: ↓ 8% in 2006.

Profit before tax & interest: ↑ 10% in 2006.

Interest expenses: ↑ 29% in 2006.

Taxes: ↑ 19% in 2006.

Net profit after tax: ↑ 5.7% in 2006.

The Income Statement

THE FINANCIAL RATIOSTHE FINANCIAL RATIOS

1. Liquidity1. Liquidity2005 2006

Current ratio 29% 27%

Quick ratio 28% 25%

Cash ratio 14% 8%

Horizontal analysis

2005 2006

Inventory 100% 129.23%Accounts receivable 100% 142.60%

2. Assets Management2. Assets Management

2005 2006

Inventory turnover 22.62 21.88

Inventory days on hand 15.92 16.45

Accounts receivable turnover 12.18 10.13

Average collecting period 29.55 35.52

Accounts payable turnover 1.02 1.00

Average paying period 354.42 359.18

Fixed assets turnover 0.97 0.99

Total assets turnover 0.83 0.86

3. Debt3. Debt2005 2006

Debt ratio 0.76 0.78Debt / equity ratio 0.86 1.09Times interest earned 14.40 12.31

Horizontal analysis2005 2006

Total assets 100% 114.44%Long term liabilities 100% 134.44%Total liabilities 100% 117.02%Total Shareholders' Equity 100% 106.22%

Vertical analysis2005 2006

Retained earnings 0.38% 0.49%Reserves 3.06% 3.40%

4. Profitability4. Profitability2005 2006

Gross profit margin 0.82 0.81

Horizontal analysis

2005 2006

Operating Revenue 100% 118.61%Cost of Service 100% 125.00%Gross Profit 100% 117.21%

Operating profit margin 0.52 0.46Horizontal analysis

2005 2006

Depreciation & Amortization 100% 129.94%General & Administration Expenses 100% 150.07%Operating Profit 100% 104.81%

Net profit margin 0.27 0.24Horizontal analysis

2005 2006

Interest expenses 100% 128.38%Taxes 100% 118.90%

Return on total assets 0.22 0.21Return on equity 0.94 0.93Earning per share 13.48 14.20

CONCLUSION CONCLUSION

problems

• Inventory increase.• Accounts receivable increase and collection decrease.• Liquidity.• Poor conversion of current liabilities into current assets.• Long term liabilities exceeded the equity.• Profitability reduction in 2006.

solution

• Increasing the accounts receivable collection rate.• Monitoring inventory consumption in 2007. • Increasing the reserved amounts of the net profit in

future.• Stimulating the sales in 2007.• More investments in other companies or activities.

Thank you