Analytic Evaluation of Financial Results for the NMG and The Observer in FY 2015
The Observer
Information was collected from The Nation
Media Group(Namwongo) and The
Observer(Kamwokya)
Results
Nation Media Group
NMG organization structure
Chairman
Abstract
CEO
The paper presents empirical analytic
evaluation of the financial result of Operations
of the Nation Media Group, NMG, and The
Observer in the Financial Year 2015.
. In the paper the scope for replacing a ratio in
paper sector country and time effects by
observed variables and the limitations were
instrumental. This study was for the award of
a higher degree in Agribusiness, “Analytical
evaluation of Financial Results of NMG and
The Observer.
The results indicate that total factor relatively
stagnated for NMG despite its regional size,
productivity increased at an average rate t,
accounting period considered (2015) for The
observer itself being a product of the Observer
Group considering overall growth. Most of the
remaining gains stem from large inflows of
fixed capital into from subsidiaries associates,
and joint ventures. The results also suggest
possible constraints to hostile environment,
competition and management lapses in Kenya
the major market for NMG among a
multiplicity other.
Key word:
Media, Agribusiness, Finance,
NMG, The
Observer, Management lapses’, Associates,
joint venture
Introduction
Nation Media Group was founded by Agha
khan in 1959 in Kenya and The Observer
newspaper was founded in 2004 by American
Observer Media Ltd .
Methodology
Director
Finance
Director
Marketing
Director
Investments
Director Mgt
Services
Director
Research
.
DividendsThe directors have recommended
for shareholders’ approval, the payment of a
final dividend for the year of Shs 7.50 (300%)
per share on the issued share capital as at 31st
December 2015, which ,together with the
interim dividend of Shs 2.50 (100%) per share
paid out on 30th September 2015, makes a
total dividend payout ofShs 10.00 per share
(400%) for the year ended 31st December
2015. The proposed dividend payout has been
maintained at the same level as that of the
previous year
Discussion of Results.The profits of the group
have shown slight decline and hence a course
to worry in the profit trends shown above
though relatively low. Such trend should be
arrested before it begins to jump in multiples
of base year profitability if NMG is Going
concern anyway
NMG Liquidity
Receivables are recognized initially at fair
value and subsequently measured at amortized
cost using the effective interest method less
provision is established when there is objective
evidence that the Group or Company will not
be able to collect all the amounts due
according to the original terms of receivables.
Conclusion
Board of Directors of Nation Media Group
The observer- Organogram
Current Asset ratio=C A= 7524.9= 2.1(2015)
CL
3591.1
= 7375.0=2.(2014)
3118.8
Quick assets Ratio=C A-Inv=6431=1.8(2015)
CL
3591.1
=6430.5=2.1…....(2014)
3118.5
Accounting method used
The NMG uses accrual accounting method
under which it consolidates financial results of
all subsidiaries, Associates and joint activities
using the acquisition method.
The company and the group comply with
International Accounting Standards Board
(IFRSB).
However IASB published a new Standard,
IFRS 15 Revenue from Contracts with
Customers (‘the new Standard’) yet to be
complied with. According to the Directors the
impact is insignificant!!!
Financial statements of Nation Media
GroupThe financial statements were prepared
in complete compliance with IFRS, under the
historical convention as modified by the
revaluation for building and stated in the
groups functional currency, (Kshs). Rounded
nearest million (M).
Management has been assumed judgement1 in
the application of group accounting policies
especially where complexity is significant.
Profitability
NMG
The observer
2015
2014
2015
2014
NMG
The Observer
2015 2014
2015 2014
G P ratio =0.80 0.81
0.76
0.57
N P Ratio =0.18 0.18
0.11
0.12
Oper. Ratio =0.81 0.77
0.54
0.43
Oper.P ratio =0.19 0.23
0.22
0.16
Expense rati =0.61 0.58
0.77
0.73
EPS
= 11.8 13.1
10.12
14.10
Leverage Ratio
NMG
The Observer
2015
2014
2015
2014
D/E 0.42
0.36
0. 55
0. 47
P. R. 0.42
0.36
0.55
0.48
S.R. 3.39
3.76
5.11
4.88
CA/NW 0.84
0.84
0.85
0.81
CL/NW 0.02
0.017
0.12
0.16
CGR 0.0008 0.00781
0.004 0.000453
Debt serv. 0.004 0.005
0.005 0.006
D C R 0.69
0.59
0.12
0.13
Activity Asset utilization Ratios
NMG
Observer
2015 2014
2015
2014
Debt. turn 1.01
1
1.03
1
Cred. Turn1.03
1
1.04
1
The group has significant concentrations of
effort of credit risk. It has policies in place to
ensure that sales are made to Customers with
an appropriate credit history.
The Observer still grapples with competition
in this highly competitive sector and substitute
A single paper portfolio for The Observer
with it’s absence in the digital portal hurts its
revenues prospect.
Recommendations-NMG needs Turn round
strategies and plan Focus on the analysis and
design of workforce and their process. Rethink
how they do their work in order to
dramatically improve readership.The Observer
needs restructuring plan of the tabloid
company is required to address top
management, business area responsible for the
process being addressed, technology groups
References
N.A. Saleemi Advanced Financial Accounting Text CPA paper (Pg
424-455) ,N.A. Saleemi Publishers, Nairobi Kenya
Bitange Bogonko Financial Accounting
Kenya,Fountain Publisher, Kenya.
Pg 16-45 CPA
Author – Oluoch Onyango George Bsc. CPA FM 0772683705
0703730744 jabilloinvestments@yahoo.com
Analytic Evaluation of Financial Results for the NMG and The Observer in FY 2015
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