Figure-2 depicts the Cellular mobile operators share in the telecommunication market. Sample size of her exploration comprised of 20 open constrained organizations from fuel and vitality division recorded at Karachi Stock Exchange and time period comprise years As a company increases debt and preferred equities, interest payments increase, reducing EPS. We find out that high level of leverage creating a high level of systematic risk, leading to high volatility in the stock prices. In return, these individuals and institutions receive promise that they will receive interest periodically and principal amount at maturity. The findings from this research are as follows:
Also to my teachers of my departments and from primarily level respected teachers who understand my mind approach and thanks-full to all of respected teachers they gave chance to learn from them and they converted theirs knowledge and information about study, they always helps me in time of need to ask about any difficulty about study. Cellular mobile services in Pakistan commenced in 90s when two cellular mobile telephone licenses were awarded to Paktel and Pak. EVO was launched which made the company the first 3G Wireless broadband service provider in Pakistan. A high degree of financial leverage means high interest payments, which negatively affect the company’s bottom-line earnings per share. As per Hughes cited in Hughes, Owen E , p.
And it also has a negative impact which means that increase in leverage decrease the growth of the firm. Introduction of PTCL 26 1. The absence of the dividends payable portion of current liabilities in FY05 and its coming back online in FY06was an important contributor to the trend. When a company uses mix of these sources, it is called capital structure. Today total subscribers have reached The number of cell phone subscribers touched nearly The debt pribatization asset ratio of the company had declined considerably in FY05 but the trend reversed in FY06, declining again in FY The new policy is expected to stimulate the industry and to yield even more dividends for the nation.
But revenues grew handsomely due to 41 per cent increase in international rates, from 6. High fixed cost lrivatization adverse impact on firm bottom line which means it reduces net income of the firm. PTCL, a service industry, is the focus of study with data ranging from year to Etisalat, which has 33 million subscribers in 14 countries, has made acquisitions and investments in excess of Dh 30 billion in expanding international operations.
Relationship between Financial Leverage and Financial Performance: According to Reilly and Browninvestment is the current commitment of funds for a period of time in order to derive future payments that will compensate the investor for, the time the funds are committed, the expected rate of inflation and the uncertainty of the future payments.
There are more than four employee classes in PTCL getting different remuneration packages Like a cast system in Hinuds.
The findings 40 3.
Moreover, as explained by Kay and Thompson in cited in Hughes, pp. The money which firms or businesses invest in purchasing land, privatizatlon or other fixed assets is called capital investment.
For the loss of assets due to fire and floods incurred during the year, an privatizatuon of Rs. I do not understand as to why they one of the biggest contributors to Pakistan economy, PTCL, go private with a sour deal and keep it secret.
Privatization of PTCL. An Unforgotten Failure of Governance
The top officers consistently kept hiding the true financial facts and figures bearing losses and public reports kept displaying healthy financial results and profitability, which strengthened the trust of shareholders and partners to keep investing besides helping the share price to grow further in the stock market. In year there is prjvatization leverage ratio in that leads to high change in return volatility 0. The results shows that in manufacturing sector Financial leverage FL has a negative relationship with profitability ROAwhile Size of the firm FS and growth of the firm FG have no impact on financial leverage.
The large debt will decrease the ROE, because in Pakistan economic conditions are poor.
PTCL’s Privatization: The Biggest Financial Scam in Pakistan’s History? – TelecomPK
But international incoming calls fell by Objectives of study 29 Chapter 02 Literature review and Research methodology 30 2. This increase is attributable to the introduction of new services and packages and launching of campaigns to increase awareness of multimedia and broadband.
Capital structure refers to the different options used by a firm in financing its assets. It has to explore the financial ability of the firm by inducing the event. This case study discusses the failure of a corporate governance in form of PTCL privatization and its associated findings were primarily confined and elective bid completion, selection of wining firm who was unaware of PTCL organizational culture, undue concession to make final offer successful, obscurity of financial deal, HR crisis under the voluntary separation programme in which around 32, employees left PTCL 4damaging impact of share value, lower profit margins, ambiguous financial performance, undervalued assets and the inappropriate choice for privatization.
There is in-significant impact of financial leverage on profitability which means that firms have impact of financial leverage on the profitability.
Researcher can also conduct comparative study by taking data from different sectors to check the relationship between financial leverage and financial performance.
Steady growth saw addition of more than two million mobile subscribers every month throughout the last year. To support budgetary expenses, government asked World Bank and International Monetary Fund IMF for more loans who encouraged Pakistan for privatization of public assets under their programme of assistance including the economic reforms.
The statically graphs and techniques are taken from Transport and Communication Industry and Cotton Textiles companies.