Accounting for Decision Makers Group Project

Question: Discuss about the Accounting for Decision Makers Group Project Namely Salhia and Zain Mobile. Answer: Reason for conducting an analysis The main reason behind the conduction of the analysis is directly related to the computation of the financial ratios for comparison of two companies namely Salhia Real Estate Company and Zain Mobile Telecommunications. The main intention is to do the analysis from investors prospective which have been shown in the part A of the study and the second part of the study deal with the financial analysis is based on the loan approval from a large Kuwaiti Bank named The National Bank of Kuwait [NBK]. Details of companies Salhia Group of companies was established in the year 1974, which has proved itself to be a leading player in terms of the Kuwaits retail and leisure, hotels and office markets. Kuwait has proved to be a country of core competency and hotbed for development activities, the portfolio of such companies is always on the rise. Salhias first in the Kingdom of Bahrain. The presence of Salhia has been observed to be the main helping hand for UK, investment and development activities are which is conducted through successful joint ventures made in Key Property Investments (Salhia.com, 2016). Zain is considered to be the pioneer of mobile telecommunications in the entire Gulf region. The company started its operations in the year 1983 in Kuwait and it is obsereved as the regions first mobile operator. The fist major commercial foot print of the company was started in 8 Middle Eastern and North African countries with a total employee strength of the 7000 employees. The company is known to provide a wide range of the mobile voice and data related services with more than 46.3 million active customers (About Zain - Zain., 2016). Reason for choosing those companies The rationale for choosing both the companies is due to its establishment in 1974 and 1983 and hence both the companies are considered to hold a strong market position among the Middle Eastern companies. Another rationale for the selection of both the companies is due to the high potential for growth of the company. The objectives of the analysis The main objective of the analysis is based on conducting financial analysis from investors prospective which have been shown in the part A of the study and the second part of the study deal with the financial analysis is based on the loan approval from the The National Bank of Kuwait [NBK]. The computation of the financial ratios will be based on ratio analysis of 2013, 2014 and 2015. Comprehensive analysis The comprehensive analysis is based on the selection of ratios for conducting both investors analysis and getting a loan approval from a bank. The main analysis from the investors perspective is based on Price-to-Earnings Ratio (E/F) Dividend Yield (H/E) Dividend Payout Ratio (H/F) Return on Assets (I/J) Net Profit Margin (D/C) Debt to Equity Ratio (K/J) Current Ratio (A/F) Rationale for choosing the particular ratios The main rational for the selection of the ratios to invest in the stock market has been considered from the different perspective of the investors. The ratios related to Dividend Yield, Price-to-Earnings Ratio and Dividend Payout Ratio will be able to show the different types of the consideration which is to be made for the investment decision in any particular company. Interpretation of the analysis (10) The main interpretation of the analysis in terms of investors point of view has showed has showed that Zain Group of companies is in a better position. This is evident from higher dividend yield, dividend payout ratio, and higher current ratio of the company. Additional factors to be considered Some of the additional factors, which need to consider for both the companies, is related to the inclusion of the components related to intangibles and the rise in the goodwill amount of the company. In such a case the rise of goodwill will be able to show a positive change in terms of investment decisions. Financial decision for making the final investment The financial decision for the first case that is a better choice in investing in the stock market is seen in terms of Zain Group. Comprehensive analysis The comprehensive analysis has been shown with the consideration of the ratios the analysis for the choice of the loan application, which is to be financed from the National Bank of Kuwait [NBK], is based on the ratio consisting of: Leverage Ratio (J/K) Operating Margin (L/C) Current Ratio (A/G) Rationale for choosing the particular ratios The main rationale in the companys ability is based considering the banks perspective for financing both the companies is based on the Leverage/ Debt-Equity ratio, which will be able to assess the different types of the debts in compare to the equity maintained by both the companies. This is particularly important for the considering whether the companies are using the right amount of to finance its assets relative to the amount represented in terms of shareholdersequity. Interpretation of the analysis In terms of the decision related to bank loan it has been clearly observed that Salhia Realestate is a better choice. This is evident from higher leverage ratio than of the company than Zain Group. The operating margin of the company has been further seen to be significantly high of Salhia Realestate. Hence, it is a better position for receiving financial credit from The National Bank of Kuwait [NBK]. Additional factors to be considered The company should be aware of the different types external factors which may the economic situation of a company. Loan recommendations Based on the comparison of the various types of the data the loan approval should be made for Salhia Reastate References About Zain - Zain. (2016).Zain.com. Retrieved 14 December 2016, from https://www.zain.com/en/about-us/ Salhia.com. (2016).Introducing Salhia | Salhia Realestate. [online] Available at: https://www.salhia.com/introducing-salhia/ [Accessed 14 Dec. 2016].