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Question 1
BT is a public limited company, registered on the London Stock Exchange. It was originally a public corporation regulated by the Government; however, the company was... show full transcript
Step 1
Answer
To analyze BT's financial performance, we need to consider the three key ratios indicated in Exhibit 1:
Gross Profit Ratio: This ratio shows the percentage of sales revenue that exceeds the cost of goods sold (COGS). It reflects how efficiently BT is producing its services.
Profit for the Year Ratio: This ratio indicates how much profit the company generates from its total revenue. For BT, this ratio has decreased to 9% in 2016, which suggests a potential decline in profitability.
Current Ratio: This is a liquidity ratio that measures a company's ability to pay short-term obligations. BT's current ratio of 0.81 in 2016 shows that it is slightly less capable of covering its short-term liabilities compared to its previous years.
Step 2
Answer
Exhibit 2 illustrates BT Retail's product life cycle, which includes:
BT Broadband: The product is at a growth stage, increasing demands as more consumers transition to digital communications.
BT Landline: This segment is in a decline phase as customers move towards mobile and internet services.
BT TV/Sport, BT Mobile Plans: Both categories are at varying stages of growth, demonstrating increasing consumer engagement, while also introducing innovative services to attract new customers.
BT Public Payphones: Reflects a decline phase with the pervasive availability of mobile phones.
Step 3
Answer
According to Exhibit 3, BT's selection process consists of the following stages:
Report Improved Results
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