FINANCE 231 MANAGERIAL FINANCE
FINANCIAL ANALYSIS OF CYTA
Prepared for: Dr Loukia Evripidou
Prepared by: Margarita Englezou
Reg. no: F2004638
Course: FIN 231
Date:19/12/2007
FINANCIAL ANALYSIS OF CYTA
For the purpose of this project the company of my concern is CYTA. By using the annual report of 2004-2005 I will try to analyze the financial flotation of CYTA and I will also try to make industry analysis in order to compare the company with the rest of the industry.
Furthermore I will conduct an extended ratio analysis for the last two years of the company operations (based on the auditors and financial reports of 2004-2005) and finally I will criticize the company’s performance and end up with recommendations upon specific problems that I will define as crucial for the survival of the company.
Theory of the subject matter
CYTA AS A MONOPOLY
As Cyta has always been a monopoly in the telecommunications services in Cyprus, it found itself in a very crucial position once Cyprus was about to enter the European Union. Being a monopoly means 100% market share. It also meant that the rates of calls for mobile as well as for fixed telephony were controlled and decided only by the State. Cyta was making millions of profit, however, since there was no competition it was operating as any monopolist - having developments and changes certainly not as a number one goal. Cyta was reluctant to any pressures for reduction of call charges and updates.
CYTA showed millions of profits the last years. Although other companies entered the market the last three years, Cyta managed to boost up their profits importantly.
Revenue from other activities increased by £5m or 16.7% due to increased revenue f ...