Full solution to ICAN CASE STUDY-NOV 2015

Report
To: The Finance Director, Magic Network Communications Limited
A (draft) Report on The Strategic Performance and the Call Centre of Magic Network Communications Limited
Prepared by: Phoenix-Adele Global Partners
Date: 19 November, 2015
Disclaimer
The report has been produced for the sole use of Magic Network Communications Limited . No liability is accepted except to the Directors of Magic Network Communications Limited.
1.      Strategic Performance of Magic Network Communications Limited
i.                    Wider context
MNC is an un-listed company. Therefore, it is not subject to pressure from the stock market to increase its profits. There is also a lower amount of pressure on it to pay dividend from it earnings.
This will change when it obtains a stock market listing.
ii.                  Financial Perspective
a.       Net profit margin (Appendix (number/letter/roman numeral-whatever you use to number your appendix)) e.g Appendix 1
MNC’s net profit margins were 5.5% and 8.1% in 2015 and 2014 respectively. This represents a fall. (sometimes, there may be different marks for stating the ratio and stating whether or not it increased or decreased)
This fall is probably due to the fall in MNC’s service rating form 7.9 in 2014 to 5.7 in 2015.(justify every figure)
b.      Current Ratio
MNC’s current ratios were 0.5:1 and 0.8:1 in 2015 and 2014 respectively. Its current ratio fell. This implies that MNC’s liquidity was poorer in 2015.
The fall was probably due to the sharp rise in MNC’s current liabilities from N73.41bn in 2014 to N105.67bn in 2015.
c.       Gearing
MNC’s gearing was 32.2% and 0% in 2015 and 2014 respectively.  The gearing rose.
A possible reason for this is that MNC took on some debt to finance its investment projects.
d.      Operational Cashflows
MNC’s operational cashflows were N134.34bn and N55.35bn in 2015 and 2014. This represents an increase.


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