Financial analysis of bSKYb 2012(only profitability ratio analysis Essay

Financial analysis of bSKYb 2012(only profitability ratio analysis part see instruction) - Essay Example U.K: Intellect Books 10 1.0 Executive summary This present paper is a report that has been prepared from the standpoint of financial analysts working for a Merchant Bank. In the report, the financial analysts provide advice to the pension fund managers in regards to whether it is a viable or a good strategic business decision to make a considerable investment in BSkyB Corporation. The size of the investment is still a matter of discussion but if the report recommends for the investment in BSkyB then the pension fund managers will seek to purchase up to a maximum of 3% of the total issued share capital of the corporation that are listed at the London Stock Exchange. The report will include historical data of the BSkyB Corporation and it will focus on the future prospects for the company. Other details that will be contained in the report include a brief description of the company, the company’s mission, and strategic direction, the balance of skills and experience of the Board of Directors, and the SWOT analysis of the company. 2.0 BSkyB Corporation According to Horsman (1997), The British Sky Broadcasting Group plc (BSkyB), which is commonly referred to as Sky is a British corporation that mainly deals in satellite broadcasting, broadband, and telephone services. The company was originally formed in the year 1990 after the merger between the British Satellite Broadcasting and Sky Television, which were at that time facing financial constraints because of the increased competition between them and other rival television companies (Horsman, 1998). Presently, the company, which has its headquarters located at London, operates in both the Republic of Ireland and the United Kingdom. By operating in these two markets, the company has been able to have 10,742,000 customers of which majority of them are TV customers. Other significant customers are the Sky HD customers, the Sky Talk customers, and the Sky broadband customers. It is of essence to note that beside s the residential customer base, the company operates other businesses that target a different consumer segments, these businesses include Sky Business, Sky Media, Sky Betting & Gaming, and Sky Sports Digital Media. This wide customer base has propelled the company to be largest pay-TV broadcaster in both the Republic of Ireland and the United Kingdom (BSkyB Corporate, 2013). 2.1 BSkyB Corporation’s mission and strategic direction BSkyB mission is to offer the best to the customers, and other stakeholders, and even to positively contribute to the lives of people both in the Republic of Ireland and in the UK. Secondly, the company also aims at creating value for their shareholders whilst achieving lasting success by focusing on long-term sustainability. The company’s strategic direction is based on the idea of always seeking to improve on their offerings to their customers, and this involves coming up with new innovative products for satellite broadcasting, and improvin g the quality of broadband and telephone services. 3.0 Balance of skills and experience of the board of directors The BSkyB Corporation’s board of directors is made up of fourteen members of whom the Chairman is Mr. Nicholas Ferguson who is a non-executive director of the company. Mr. Ferguson brings into the board exceptional