Safaricom Ratio Analysis

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Ratio analysis is the quantitative analysis of information contained in a company’s financial statement. According to NetMBA (n.d.), ratio analysis is usually based on the balance sheet, income statement and cash flow statements of the company. It is used to analyze the financial performance of a company and also to compare different companies in the same industries and also different company’s in different industries, It is usually done on line by line item. The ratios which I have used in my analysis are ; solvency, liquidity, profitability, efficiency, market prospects, investments leverage and coverage in which I have compared the performance of Safaricom company in line with Bharti Airtel in a period of three years.
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It involves specifying the objectives of the business ventures or project and identifying the internal and external factors that are favorable and unfavorable to achieve the objectives (Kathryn, Bartol & David, 1997). Strengths and weakness are internal factors over which a company have a measure of control, while opportunities and threats are external factors which a company have essentially no control. It is a useful method used to understand the strengths and weaknesses of a business as well as identifying opportunities and threats. For businesses, SWOT can help them uncover glorious opportunities in the market; further, by understanding the weaknesses of the business, management can eliminate and/ or manage threats that otherwise can undermine the business goals and objectives of the business ('Mind Tools', 2016).
The factors used in SWOT analysis include:
Strengths describes the positive attributes tangible and intangible that are internal to the organization and are within the organization’s control. It analysis the internal resources a company has for example tangible assets within the organization and the positive attributes of the staff. Strengths give a company a competitive advantage over its competitors (Berry, n.d.). the questions to ask when analyzing strengths include;
• What are the advantages inherent to the organization?
• What does
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The list of items generated by SWOT analysis provides information that needs to look into deeper using other tools such as focus groups; this means SWOT analysis cannot be used independently without using other tools.
2. SWOT analysis generates lists of strengths, weakness, and opportunities and threats facing a company, the items in the list do not carry certain weight that represents how significant each item is to the company. For example management may interpret that shorter list of threats versus longer list of strengths means that the company is doing well when in fact the threats are more significant than the strengths.
3. SWOT analysis helps a company to generate lists of the strengths, weakness, opportunities and threats but the list do not help the company in realizing its goals.
4. It can generate too many ideas but do not help you choose which one is the

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