Executive Summary
The following is an analysis of a variety of ratios for Ten Network Holdings. The results of several ratios are used to compare Ten Network Holdings against its competitors, Seven Network Limited, Publishing and Broadcasting Limited, Prime Television Limited, and Southern Cross Broadcasting. These comparisons are then used to determine the investment potential of Ten Network Holdings.
By using financial statements from Ten Network Holdings, Seven Network Limited, Publishing and Broadcasting Limited, Prime Television Limited from 2002-2006 a series of ratios were calculated. Debt to Asset, debt to equity, sales growth, days receivable outstanding, quick and current, days payable outstanding, return on assets, return on equity, and net profit margin ratios were calculated for each company and used in determining the investment potential of Ten Network Holdings.
From the analysis of the above ratios, it was determined that Ten Network Holdings has underperformed in relation to its competitors. Ten Network Holdings can be described as an unappealing investment with insecure and unreliable returns.
Table of Contents Objective of Report 4
Company and Industry 4
Industry 4
Ten Network Holdings 5
Publishing & Broadcasting Ltd. 5
Seven Network Limited 6
Prime Television Limited 6
Southern Cross Broadcasting 7
Limitations in Analysis 8
Company Performance 8
1.0 Liquidity Ratios 8
1.1 Debt to Asset 8
1.2 Debt to Equity 9
2.0 Efficiency Ratios 10
2.1 Sales Growth 10
2.3 Expense Management 11
3.0 Activity Ratios 11
3.1 Days Receivable Outstanding 11
4.0 Liquidity Ratios 12
4.1 and 4.2 Quick and Current Ratios 12
4.2 Days Payable Outstanding 13
5.0 Profitability Ratios 14
5.1 Return on Equity 14
5.2 Return on Asset 15
5.3 Net Profit Margin 16
Future Prospects and Investment Potential 17
Conclusion 18
References 19
Appendices
1.0 Excel ratios- Profitabilty Systems for all Companies 20-24
2.0 Financial Data For Ten Network Holdings 25-33
3.0 Ten Corporate Global Takeover Offer 34
4.0 PBL Media Shake Up 35-36
5.0 Ten CEO Television Review 37-40
6.0 Ten Eyecorp Review 41-44
7.0 Student Analysis 45
Objective of Report
The objective of this report is to examine a series of accounting financial statements from Ten Network Holdings Limited over the last five years and note the usefulness of these statements in making investment decisions. The report will provide an in-depth evaluation and explanation of the financial results of Ten Network Holdings compared to its competitors, Prime Television Limited, Publishing and Broadcasting Limited, Seven Network Limited, and Southern Cross Broadcasting and the Television and Broadcasting industry as a whole. The key factors that will have an effect on the future operations of the Ten Network Holdings its competitors and the industry will also be assessed. This will allow us to demonstrate our understanding of financial statement analysis techniques which include ratio analysis, common size analysis and trend analysis. The relationship between the return on shareholders funds and the other ratios will be addressed in order to verify Ten Network Holdings as a good investment or not.
Company and Industry
Industry
Ten Network Holdings Limited belongs to the Media sub-industry of the Consumer Discretionary industry1Ten Network Holdings is among the big players in its industry. With competitors such as Publishing and Broadcasting Limited and Seven Network Limited above Ten in market capitalization and Southern Cross Broadcasting and Prime Television Limited below TEN in market capitalization, the company finds itself right in the middle of the competition. The companies in the media industry provide television broadcasting, radio broadcasting, gaming and entertainment and distribution
Ten Network Holdings
Ten Network Holdings was established in 1964 and operates the Ten Network stations in Sydney,
