Financial Analysis of British Telecommunications

An individual report

Table of Contents
Introduction......................................................................................................................................3
Section-A.........................................................................................................................................3
Development 1: Covid-19......................................................................................................3
Development 2: Italian Accounts Scandal.............................................................................4
Section – B.......................................................................................................................................5
Dividend Policy......................................................................................................................5
Sources of Finances................................................................................................................6
Section – C.......................................................................................................................................9
Ratio Analysis........................................................................................................................9
Conclusion.....................................................................................................................................13
References......................................................................................................................................13
Books & Journals.................................................................................................................13
Appendix........................................................................................................................................15

Introduction
In order to conduct the present study British Telecommunication is taken into consideration.
British Telecommunications plc is a global broadcast communications organization. As one
of the world's driving correspondences specialist service providers, BT takes into account
clients in 180 nations. BT is additionally the United Kingdom's greatest fixed-voice and
broadband supplier, and offers TV and versatile administrations. BT comprises of four
principle business lines: Consumer, Enterprise, Global Services, and Openreach. The
respective company has made the profit amounting to 1.47 billion British pounds in the
financial year of 2020-21. Also, it has been constantly performing well with high level of
efficiency. For the purpose of study, the analysis of the financial performance British
Telecommunications are traced out. Also, the different risks and their management which
are related to the sources of finance and dividend policy has been critically assessed.
Section-A
Critically analyse any two recent developments in context to the financial environment which
has impacted on the performance and development of the company in the future aspect.
Development is a cycle that makes development, progress, positive change or the
expansion of physical, financial, ecological, social and segment parts (Mather, 2019). The
motivation behind improvement is an ascent in the level and personal satisfaction of the
populace, and the creation or extension of nearby territorial pay and business openings,
without harming the assets of the climate.
Development 1: Covid-19
The COVID-19 pandemic maybe more than some other occasion in mankind's set of
experiences has exhibited the basic significance that broadcast communications
framework plays in keeping organizations, legislatures, and social orders associated and
running. In view of the financial and social interruption brought about by the pandemic,
individuals across the globe depend on innovation for data, for social separating, and
telecommuting. British Telecommunication has been performing well as compared to
other business sectors. Although the profits have fell down to 666 million British pound
in the second half of the financial year of 2019-20 and it went up in the financial year to
856 million British pound in the first half of 2020-21.

Impacts on the financial performance of British Telecommunication because of the global
pandemic Covid-19.
Impact Details
Business consequences In the buyer business, incomes of British
Telecommunication declined by 7% as
compared to previous year, while the venture
unit saw a downfall of 9% which reduced the
efficiency as well as the consistency of the
company.
Impact on sales Reported income fell by 2% and adjusted
income fell by 3%. This was basically because
of the effect of guideline, decreases in heritage
items, key decreases of low edge business and
divestments.
Disruption in supply Also, the disruptions in the short term supply
of network equipment became a big hurdle for
the company to accelerate the business
operations on a serious note. The major impact
of this shortage in the supply has resulted into
the suspension of the new construction
projects.
Strategy implementation in order to mitigate the impact of the Covid-19.
British telecommunication immediately reduced its workforce considerably and shifted
from the office premises to work from home so that it can abide by the policies of the
government to tackle the situation of covid 19 (Moreale and Zaynutdinova, 2018). Also, the
respective company has tried to improvise the financial position of the company by reducing
the operating costs in the phase of the global pandemic situation. This helped the company to
lower down the product cost.