The document is a report from Kuwait Telecommunications Company (VIVA) that answers 10 questions. It provides details from VIVA's 2017 annual report, including the names of the financial statements, the standards used to prepare the statements, VIVA's business activities, its parent company, responsibilities of management and auditors, accounting equations for 2017 and 2016, a comparison of revenue and net profit between years, and current ratio and debt ratio calculations for 2017 and 2016.
The document is a report from Kuwait Telecommunications Company (VIVA) that answers 10 questions. It provides details from VIVA's 2017 annual report, including the names of the financial statements, the standards used to prepare the statements, VIVA's business activities, its parent company, responsibilities of management and auditors, accounting equations for 2017 and 2016, a comparison of revenue and net profit between years, and current ratio and debt ratio calculations for 2017 and 2016.
The document is a report from Kuwait Telecommunications Company (VIVA) that answers 10 questions. It provides details from VIVA's 2017 annual report, including the names of the financial statements, the standards used to prepare the statements, VIVA's business activities, its parent company, responsibilities of management and auditors, accounting equations for 2017 and 2016, a comparison of revenue and net profit between years, and current ratio and debt ratio calculations for 2017 and 2016.
The document is a report from Kuwait Telecommunications Company (VIVA) that answers 10 questions. It provides details from VIVA's 2017 annual report, including the names of the financial statements, the standards used to prepare the statements, VIVA's business activities, its parent company, responsibilities of management and auditors, accounting equations for 2017 and 2016, a comparison of revenue and net profit between years, and current ratio and debt ratio calculations for 2017 and 2016.
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Report BE210 - Solution to the
Answers The TMA Questions Kuwait Telecommunications Company (VIVA)
Answer to question # 1
As mentioned in the Annual Report of the company. The names of the reports mentioned below represents the financial statements of Kuwait Telecommunications Company (VIVA). 1. Statement of financial position. 2. Statement of profit or loss 3. Statement of changes in equity. 4. Statement of cash flows.
In addition to these financial reports, there are the Notes available by the auditors to these report in the Annual Report of the company.
Answer to question # 2
As mentioned in the annual report, the financial statements of the company Kuwait Telecommunications Company (VIVA) for the year 2017 has been are prepared in as per the defined standards of International Financial Reporting Standards (IFRSs) . IFRS Standards internationally defines the policies for the presentation of financial standings of the company. Similarly, Kuwait Telecommunications Company (VIVA) has also obeyed these rules in presenting their financial statements. (Carmona and Trombetta, 2008)
Answer to question # 3
Kuwait Telecommunications Company (VIVA) company performs many business activities in
the field of Telecommunication in its country. Five of them are listed below, as mentioned in the annual report of VIVA 2017; 1. Introducing the new and supplementary services of telecommunication in the country and then managing the services related to telecommunications, so that the company can run its major telecommunication operations. 2. Importing and exporting the telecommunication related tools, machines, devices, equipment and technical parts so that the company can deliver its telecommunication services in the country. 3. Buying and leasing the telecommunication data transfer lines , so that the company can deliver its telecommunication services in the country. 4. Buying the telecommunication related equipment and technical machineries so that the company can deliver its telecommunication services in the country. 5. Research and marketing operations in the field of developing of telecommunications products and services in Kuwait. The company also conduct technical research for improving its currently running projects in Kuwait.
Answer to question # 4
As mentioned in the annual report, Saudi Telecommunications Company (STC) is the parent company of Kuwait Telecommunication Company (VIVA)
Answer to question # 5 A) According to the international standards, the preparation and fair presentation of the financial statements is always the responsibility of Management of the company. It is their duty to provide correct and fraud less income, expense, and all other financial data elements for preparing the financial statements of the company. B) As we known from the annual report of the company VIVA 2017, Talal Y. Al-Muzaini from Deloitte & Touche is the name of the independent auditor of the company for the year 2017 C) According to the international laws, the independent auditors always prepare their opinion following the standards of with International Standards on Auditing (ISAs). Along with the observance of International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants - IESBA Code. This is the duty of the independent auditor to check and to make sure that the company has provided all the financial data figures correctly without any fraud and miss management. The independent auditors assess the rick factor , internal control, effectiveness of the policies of management and material miss management factor from the presented data by the company management. Answer to question # 6
As mentioned in the annual report of the company VIVA 2017:
Total Assets at December 31, 2017 is KD 283,601,000 Total Assets at December 31, 2016 is KD 267,392,000 Accounting Equation: As presented by the Accounting Equation: “Assets=Liabilities + Stockholders’ Equity” At December 31, 2017; KD 283,601,000=KD 115,793,000+KD 167,808,000 At December 31, 2016; KD 267,392,000=KD 134,679,000 + KD 132,713,000
(All figures have been taken from the annual report of the company VIVA 2017 )
Answer to question # 7
As mentioned in the annual report of the company,
Revenue of Kuwait Telecommunications Company for the years 2017: KD 277,593,000 Revenue of Kuwait Telecommunications Company for the years 2016: KD 279,059,000 Comment on the answer: As it is very clear from the presented facts of the report, that the company revenue for year 2017 decreased when compared with the company revenue in 2016. Finding the percentage, (277,593-279,059) /279,059 x 100 = -0.53% Total decrease in the company revenue is = 0.53%
(All figures have been taken from the annual report of the company VIVA 2017 )
Answer to question # 8 As mentioned in the annual report of the company, Net Profit for the year 2017: KD 40,092,000 AND Net Profit for the year 2016: KD 39,808,000 Comment on the answer : As it is very clear from the presented facts of the report, that the company net profit for year 2017 increased when compared with the company net profit in year 2016.
Finding the percentage, the net profit was increased by (40,092-39,808)/39,808 * 100 = 0.71% (All figures have been taken from the annual report of the company VIVA 2017 )
Answer to question # 9 As per the formula, Current Ratio = Current Assets/Current Liabilities Finding the Current Ratio for company VIVA at December 31, 2017: 89,506,000/112,163,000 = 0.8 Finding the Current Ratio for company VIVA Current Ratio at December 31, 2016: 82,229,000/119,883,000 = 0.69
(All figures have been taken from the annual report of the company VIVA 2017 ) Comments on the answer: Currently the current ratio of the company is less than 1, this shows that the company has less amount of assets as compared to its payable liabilities. However as calculated in the year 2017, the current ratio improved and got closer to the value of one. This showed that company has improved its performance for paying its liabilities. (Edmister, 1972)
Answer to question # 10 As per the formula, Debt Ratio = Total Debt/ Total Assets Finding the Current Ratio for company VIVA as of December 31, 2017: (9,036/283,601) = 0.03 Finding the Current Ratio for company VIVA as of December 31, 2016: (35,501/267,392) = 0.13 (All figures have been taken from the annual report of the company VIVA 2017 ) Comments on the answer: As long as the value of debt to assets ratio is lesser, the company has to pay lesser debts out of its assets. The company has improved its debt ratio in the year 217 by improving its value of assets and by lessening its value of debts in the year 2017. (Smyth and Hsing, 1995)
References Carmona, S. and Trombetta, M., 2008. On the global acceptance of IAS/IFRS accounting standards: The logic and implications of the principles-based system. Journal of Accounting and Public Policy, 27(6), pp.455-461. Edmister, R.O., 1972. An empirical test of financial ratio analysis for small business failure prediction. Journal of Financial and Quantitative analysis, 7(2), pp.1477-1493. Smyth, D.J. and Hsing, Y., 1995. In search of an optimal debt ratio for economic growth. Contemporary Economic Policy, 13(4), pp.51-59.
