Canadian media and communications giant Rogers Communications Inc. is a publicly listed firm. Founded by Edward Rogers in 1960 with headquarters in Toronto, Ontario, the firm is now worth billions of dollars (WSJ, 2023).

The three main divisions that make up Rogers Communications are wireless, cable, and media. In Canada, wireless telecommunications services are provided to both individual customers and commercial enterprises via the Wireless division. The Cable division handles things like cable TV, internet, and phone service (landlines) (Last10K, 2023) for the company. Sports media and entertainment, broadcast television and radio, cable television, specialty channels, omnichannel retail, digital media, and publishing are all part of the Media segment's diversified array of media businesses.

The corporation has one of the biggest and most dependable wireless networks in Canada, serving 97% of the population. Additionally, the Toronto Blue Jays, Citytv, and Sportsnet are all properties of Rogers Communications.

Bell Canada Enterprises (BCE) and TELUS Corporation are two of Rogers Communications' main rivals in Canada. Together with Rogers, they make up the "Big Three" in Canadian telecommunications, vying for customers in the fixed-line, cable, and wireless sectors.

Company	Rogers Communications Inc.	Telus Corporation
Industry	Telecommunications, Mass media	Telecommunications
Founded	1960	1990
Headquarters	Toronto, Ontario, Canada	Vancouver, British Columbia, Canada
Key People	Edward Rogers III (Chairman), Tony Staffieri (Interim President and CEO)	Darren Entwistle (President and CEO), R. H. (Dick) Auchinleck (Chairman)
Services	Cable television, broadband and network access, business solutions, film and television production, broadcasting, sports entertainment	Telecommunications, health care
Revenue (2022)	CAD 15.39 billion	CAD 15.5 billion
Net Income (2022)	CAD 1.68 billion	CAD 1.7 billion
Total Assets (2022)	CAD 55.65 billion	CAD 36 billion
Total Equity (2022)	CAD 10.0 billion	CAD 10.5 billion
Number of Employees (2022)	25,000	75,000

 

Rogers Communications has maintained steady revenue growth over the last several years, improving its financial status. A reliable dividend distribution is another evidence of the company's financial health, making it a desirable investment for those seeking security.

Current Ratio:

The current ratio shows if a company can pay its short-term bills with its available assets. A ratio of 1 or higher is good, meaning the company has enough assets to cover its debts. But if it's below 1, it suggests the company may have trouble paying its immediate bills.

In 2020, the current ratio was slightly above 1, which was good. However, in 2021 and 2022, the ratio fell below 1, indicating potential financial challenges for Rogers Communications.

 Quick Ratio:

The quick ratio is similar to the current ratio but stricter. It looks at the company's ability to pay debts using only its most liquid assets like cash and accounts receivable. It ignores less liquid assets like inventories.

In 2020, the quick ratio was decent, showing the company could cover its short-term obligations. But in 2021 and 2022, the quick ratio declined, indicating the company faced difficulties in paying its short-term debts with only its most liquid assets.

 Accounts Receivable Collection Period:

This measures how long it takes for the company to collect payments from its customers. A lower collection period is better, as it means the company is getting paid quickly.

In 2020, Rogers Communications took around 69 days on average to collect payments, which was reasonable. However, in 2021 and 2022, this period increased to about 83 and 95 days, respectively, suggesting the company faced challenges in getting paid promptly.

 Days Sales in Inventory:

This measures how quickly the company sells its inventory. A lower number of days is better, as it means the company is selling products efficiently.

In 2020 and 2021, Rogers Communications took about 21 days on average to sell its inventory, which was good. In 2022, the number decreased slightly to around 20 days, showing improved inventory management.

In simple terms, Rogers Communications faced some liquidity challenges in 2021 and 2022, and they had difficulty collecting payments from customers promptly. However, they managed to sell their inventory efficiently. As investors or stakeholders, it's important to keep an eye on these financial metrics to understand the company's financial health and how well it manages its short-term obligations, inventory, and cash flow.

 Gross Margin and Gross Margin Percentage 

Gross profit is the monetary value that results from subtracting cost-of-goods-sold from net sales. Gross margin is the gross profit expressed as a percentage. It divides the gross profit by net sales and multiplies the result by 100. The Gross Margin Ratio improved from 2020 to 2021, indicating that the company was able to control its production costs better and generate higher profits relative to its sales. However, in 2022, the Gross Margin Ratio slightly declined, but it is still higher than the ratio in 2020, indicating that the company maintained its profitability despite a small drop

 Operating Margin and Operating Margin Percentage 

The operating margin measures how much profit a company makes on a dollar of sales after paying for variable cost of production, such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company's operating income by its net sales.The company's operating margin and operating margin percentage seem to vary across the years. In 2022, there was a significant improvement in the operating margin, reaching 24.8%, compared to 23.3% in 2020 and 15.7% in 2021. This indicates that the company has become more efficient in controlling its operating costs and generating profits from its core business activities.

Overall, a higher operating margin percentage is generally considered more favorable, as it shows that the company is generating more profit per dollar of revenue. However, it's essential to consider the industry benchmarks and the company's specific circumstances when interpreting these figures.

 Net Profit Margin and Net Profit Margin Percentage 

The net profit margin, or simply net margin, measures how much net income or profit is generated as a percentage of revenue. It is the ratio of net profits to revenue for a company or business segment. Net profit margin is typically expressed as a percentage but can also be represented in decimal form. The net profit margin illustrates how much of each dollar in revenue collected by a company translates into profit. Overall, the net profit margin (expressed both as a ratio and percentage) has remained relatively consistent over the three years. It fluctuated between 10.6% and 11.4%, which indicates that the company has been able to maintain a stable level of profitability in relation to its net sales during this period.

 Asset Turnover

The asset turnover ratio is a financial ratio used to measure a company's efficiency in generating revenue from its assets. It indicates how much revenue your business is generating for every dollar invested in total assets. A higher ratio indicates that the company is utilizing its assets efficiently to generate revenue. Over the three years, we can see that the Asset Turnover Ratio has declined from 37% in 2020 to 36.23% in 2021 and further to 31.45% in 2022. This suggests that the company's ability to generate sales from its assets has decreased over time.In conclusion, the company's Asset Turnover Ratio has been declining over the past three years, which may raise concerns about its efficiency in utilizing its assets to generate revenue.

  Return on Total Assets

Return on Assets (ROA) is a type of return on investment (ROI) metric that measures the profitability of a business in relation to its assets. It indicates how well a company is performing by comparing the profit it's generating to the capital it's invested in assets.  The higher the return, the more productive and efficient management is in utilizing economic resources. The company's ROA and Assets Turnover Ratio fluctuated over the three years. In 2020, both ratios were relatively high at around 8.54%, indicating that the company was effectively using its assets to generate profits and revenue. However, in 2021, both ratios declined to around 5.69%, suggesting a potential decrease in efficiency in utilizing assets to generate profits. In 2022, there was a slight recovery, with the ROA and Assets Turnover Ratio reaching approximately 7.81%

 Debt to Total Asset Ratio:

The debt to asset ratio is a relation between total debt and total assets of a business, showing what proportion of assets is funded by debt instead of equity. The debt ratio showed stability in 2020 and 2021 (0.75) but increased to 0.82 in 2022. The increase in the debt ratio in 2022 might indicate that the company either borrowed more to fund growth initiatives, acquisitions, or other projects, or it could be a result of changes in the company's financial structure.Equity to Total Asset Ratio:

The equity ratio is a measure of solvency and it indicates how much of a company's assets have been generated by issuing equity shares rather than by taking on debt. The equity ratio showed stability in 2020 and 2021 (0.25) but decreased to 0.18 in 2022. The decline in the equity ratio in 2022 might indicate that the company either issued more debt or reduced its equity through share buybacks or other financial activities. The equity ratio is a measure of a company's financial leverage, and a lower ratio generally indicates higher financial risk, as it means the company relies more on debt financing. 

Times Interest Earned Ratio: 

The times interest earned ratio is a measure of a company's ability to meet its debt obligations based on its current income. Based on our data, the company's times interest earned ratio declined from 2021(3.51) to 2022(2.86), denotes that the ability to cover its interest expenses with its operating earnings has been weakening over time. A lower times interest earned ratio means fewer earnings are available to meet interest payments. The potential reason for this decrease is the company's interest expenses have been rising faster than its net income, it put pressure on the times interest earned ratio.

 

Overall Conclusions

Based purely upon the above information , make an overall conclusion of the financial situation of your company: Is it healthy or not? Has it improved or worsened over the three years? What trends do you see?