A study on financial evaluation of performance of telecommunication sector with reference to Omantel and Nawras

Omantel and Nawaras are two major telecommunication companies that together having approximately 90% of market share in Sultanate of Oman, This study attempts to examine and compare financial performance of these companies in terms of liquidity and profitability-return on capital employed, growth of sales and profit, operating profit to sales, turnover to investment and market share of these two companies. Appropriate financial tools such as ratios and correlation technique have been used to measure the relationship between two variables and examine the financial position of the companies. Methodology and data used for this study are secondary ones and they are collected from the annual report of the respective companies. Five years data from 2009 to 2013 have been analyzed and examined the study shows that the growth of sales and profit percentage are volatile and showing negative trend in both the companies. The percentage of EBITDA in Omantel is relatively higher comparing to Nawaras, however it is evidenced that EBITDA in both the companies is in declining trend from 2012 onwards. Short term liquidity position of Nawaras Company is very critical, where as the short term liquidity status of Omantel is sufficient enough to meet its short term obligations. It is also observed from the study that both the company is falling short of percentage of growth in sales and profit. Debt capital in Omantel is completely missing and therefore it might lose the benefit of not having debt capital in the total capital.