Bharti Airtel Limited is the largest provider of mobile telephone services in India. It also offers fixed lines, broad band and subscription television services. The total income of the income grew from ₹ 79,442 million during 2004–05 to ₹ 381,287 million during 2010–11 with a CAGR of 30%. The profit after tax in the same period increased from ₹ 12,107 million to ₹ 77,169 with even a better CAGR of 36%. However due to increased competition, the PAT during 2010–11 actually declined from ₹ 94,262 million in the previous year. The common size balance sheet of the company taking total as the base and common size profit and loss account taking service revenue as the base is given as follows:

Common Size Balance Sheet as on 31st March

Common Size Profit and Loss Account for the Year Ended 31st March

Questions for Discussion

1. Based upon the aforesaid information comment on the following:

1. Change in the capital structure of the company.

2. Composition of assets.

3. Composition of revenue and expenses.

2. Analyse the profitability of the company based upon the above and identify the reasons for decline in profitability in the year 2010–11.

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Particulars Shareholders' funds Borrowed funds Deferred tax liability Current liabilities Total Fixed assets (Net) Investments Deferred tax assets Current assets, loans and advances Miscellaneous expenditure (Not written off) Total 2005 2006 2007 32.50 38.60 42.64 51.92 35.80 25.20 19.79 0.72 0.99 0.88 15.77 0.42 30.97 35.20 36.69 31.06 100.00 100.00 100.00 100.00 80.65 80.79 55.87 3.78 2.63 77.14 6.68 28.09 2008 2009 2010 56.29 67.26 15.71 9.23 0.01 0.04 28.00 23.51 100.00 100.00 56.16 54.23 23.98 28.88 0.67 15.52 16.57 16.03 19.19 16.89 17.99 100.00 100.00 16.85 0.16 0.01 0.00 2011 61.30 16.53 0.73 0.00 21.43 100.00 65.59 16.42 100.00 100.00 100.00 100.00 100.00