Introduction to Financial Accounting

Bahrain Telecommunications Company (BATELCO)

The Batelco Group is headquartered in the Kingdom of Bahrain and listed on the Bahrain Bourse {Bahrain Telecommunications Company (BATELCO)}. Batelco has played a pivotal role in Bahrain's development as a major communications hub and today is the leading digital communications' provider, continuing to lead and shape the local consumer and enterprise markets. As well as serving the consumer, corporate and wholesale markets in Bahrain, Batelco Group also delivers cutting-edge fixed and wireless communication services to its customers across its countries of operation. Batelco's overseas operations continue to add value to the Group and in 2015 contributed 59% of revenues and 55% of EBITDA (Batelco, Annual Report 2015).

You can download the 2015 annual report for Batelco directly from the following web page:

http://www.batelcogroup.com/media/60887/batelco_ar_2015_english.pdf

Instructions:

Use the annual report to answer the following questions:

1- What are the main components of Batelco's "Consolidated Financial Statements 2015"?

2- What are the standards and requirements that govern the preparation of the consolidated financial statements 2015?

3- Batelco ("the Company", "the Parent") is a public shareholding company, what are the subsidiaries and associate of the Group included in these consolidated financial statements? And what is its main function and industry?

4- Go through the "Independent Auditors' Report to the Shareholders" and answer the following questions:

a. Who is responsible for the preparation and fair presentation of these consolidated financial statements?

b. What is the name of the independent auditor and what is their responsibility?

5- What are Batelco's total assets at 31 December 2014 and at 31 December 2015? Write Batelco's accounting equation at 31 December 2015, by filling "Assets=Liabilities Stockholders' Equity".

6- Identify Revenues for the years 2015 and 2014. Did Revenues increase or decrease in 2015 compared with 2014? Comment.

7- Identify Net Profit (Net Income) for the years 2015 and 2014. Did Net Profit Increase or decrease in 2015 compared with 2014. Based on this, was the year 2015 better or worse than the year 2014?

8- Compute Batelco's current ratio at December 31, 2015 and December 31, 2014. Did the company's ability to pay current debts improve or deteriorate or did it remain the same. Comment briefly on your findings.

9- Compute the debt ratio for Batelco as of December 31 2015. Comment on your answer.