Free Accounting Dissertations - Bt Group, Going Forward, Has A Slightly Lower Pe Ratio Than The Sector. This
BT Group, going forward, has a slightly lower PE ratio than the sector. This is because most of the other companies in the Telecom sector are expected to show a turnaround this year. BT’s earnings are now more or less stabilised. Also most of the other companies are smaller and hence have a potential to grow faster.
Vodafone and O2 are comparable in market size to BT but both are in mobile telecommunication, a business still not as mature as landline communication. They both have higher progressive PE ratio as compared to BT reflecting the growth potential in their earnings.
Appendix 1: Summary consolidated balance sheet of BT Group plc
£m
31-Mar-04
31-Mar-03
Fixed Assets
16,068
16,661
Current Assets
10,550
11,556
Creditors amount due within one year
Borrowings
1,271
2,548
Other creditors
7,277
7,132
8,548
9,680
Net Current Assets/(Liabilities)
2,002
1,876
Total assets less current liabilities
18,070
18,537
Creditors amount due after one year
Borrowings
12,426
13,456
Total creditors due after one year
12,426
13,456
Minority Interest
46
63
Provisions for liabilities and charges
Deferred taxation
2,191
2,017
Other
313
359
Total provisions for liabilities and charges
2,504
2,376
Total Equity Shareholders interests
3,094
2,642
Source: BT Group Annual Report 2004, http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm
Appendix 2: Summary consolidated cash flow statement
£m
2004
Net cash inflow from operating activities
5,392
Net cash outflow from return on investments
-527
Taxation
-317
Net cash outflow from capital expenditure
-2,477
Net cash inflow before acquistions and disposals
2,071
Net cash inflow from acquistions and disposals
-60
Equity dividends paid
-645
Net cash inflow before financing
1,366
Management of liquid resources
1,123
2,489
Financing
Issue of ordinary share capital
0
Repurchase of share
-144
New loans
1,326
Repayment of loans
-3,627
Net cash outflow from financing
-2,445
Increase in cash in the year
44
Source: BT Group Annual Report 2004, http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm
Appendix 3: Earnings per share
2000
2001
2002
2003
2004
Basic, p
27.6
-25.7
12.0
31.2
16.4
% change
-
-
160.0%
-47.4%
Before goodwill amortisation and exceptional items, p
29.8
17.5
6.1
14.2
16.9
% change
-41.3%
-65.1%
132.8%
19.
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