(BUSS PROJECT)Financial Ratio Analysis ((TAQA Vs AEP) companies)

Abu Dhabi National Energy Company( TAQA) History
Abu Dhabi National Energy Company (TAQA) is a UAE energy company based in Abu Dhabi but also operates in around 11 other countries across the world. TAQA is considered to be a new firm in the industry. It is listed in the Abu Dhabi Securities Exchange (ADX) under TAQA.

2005
2006
2008
2012

TAQA was founded by the Abu Dhabi government as a public joint stock company

TAQA expanded quickly making several key acquisitions in Africa and North America.

TAQA acquired several North Sea assets from Shell U.K. Limited and Esso Exploration and Production (UK) Limited


TAQA launches a new business
stream focusing on alternative energy
Technologies such as creating energy from
waste in Abu Dhabi
Timeline
AEP History
The American Gas and Electric Company was incorporated in Dec. 20, 1906. The company was formed from a utility holding company, Electric Company of America, which was organized in 1899. The company acquired its first utility properties Jan. 2, 1907. These properties provided electric service, gas, water, steam, transit, or ice service in communities in New Jersey, New York, Pennsylvania, West Virginia, Ohio, Indiana, and Illinois. The company became American Electric Power in 1958 and merged with Central and Southwest Corporation in 2000.
Timeline
 




1906
1911
1917
1922-1949
2000

In its earliest years, AEP – then known as American Gas and Electric Company (AG&E) - was an assortment of small, struggling utilities scattered across a number of states, stretching from the Atlantic Ocean to Illinois.
AEP's interconnected power system got its start in 1911, when power plants in Marion and Muncie were connected by a 33,000-volt line across some 30 miles of Indiana farmland so they could support each other and improve reliability.
AEP's first "super" power plant began operation on the Ohio River in Wheeling, it was the first major steam plant .
-began simultaneous construction of three, very large generating stations. In 1924, AG&E purchased control of American Electric Power Company with no relation to the present AEP.
.

AEP merged with Central and South West Corp. based in Dallas, Texas, on June 15, created one of the largest utilities in the nation, with combined revenues of $12.5 billion, electricity sales of 200 million megawatt hours, $35 billion in assets, and nearly 9 million customers across the globe.
Financial Ratios
Assess the capability of a company to fulfill its debt commitments. Gives an idea of number of times a corporation can cover its interest payment on a pre-tax base.
Liquidity ratio sorts companies according to their ability to payback short-term obligations. The higher it is, the stronger financial status of the company and the more better the company is in accomplishing its liability.
Time Interest Earned = -
 
Current Ratio = -
 
The higher the better
The higher the better
Financial Ratios
This ratio is important to investors to know whether it is risky or safe to invest in a particular company, and it identifies firms that are highly leveraged i.e. use borrowed capital for an investment.
Evaluate to what extent a company' is leveraged. As it becomes higher, it indicated more leveraged the company and consequently larger risk.
Debt-Equity Ratio = -
 
Total Debt Ratio = -
 
The lower the better
The lower the better
Financial Statement for AEP
Comparing 2 firms within the UTILITIES INDUSTRY
Financial Ratio Analysis
VS

Eman ALQawasmi
100038650
Noorulhuda Al Mihyawi
100038619
Fatima Ghanim
100038623
Outline

Utility Industry History
TAQA History (UAE)
AEP History (USA)
Financial Ratio Comparison
Share Price Variation Chart
Conclusion
References
History of the Utilities Industry
After the invention of light bulb which was introduced by Thomas Edison in 1880, the revolution of supplying the world with electricity has just started.
On December 17, 1886, Edison founded the Edison Illuminating Company. The company established the first investor-owned electric utility on Pearl Street Station, New York City.

Thomas Edison
Financial Statement for TAQA
Financial Ratios
A measure of the average number of days that a company takes to collect revenue after a sale has been made.
measures a company's ability to generate net sales from fixed-asset investments - specifically property, plant and equipment
* DSO= 365-
 
Fixed Asset TO= -
 
The higher the better
Financial Ratios
A measurement of the company's liquidity (short-term). The quick ratio denotes to a company's capacity to achieve its short-term adherence through its most liquid possessions.
Demonstrate how fast a company consume its supply of merchandise over a given time period. Small inventory turnover ratio implies that company has modest sales or extravagant inventory.
Quick Ratio = -
 
Inventory Turnover= -
 
The higher the better
The higher the better
Financial Ratios
Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.
Measures a business's ability to generate profit from conducting its operations. Earnings power is used to analyze stocks to assess whether the company is worthy of investment.
Profit Margin= -
 
Basic Earning Power= -
 
The higher the better
The higher the better
References



[1]
"Thomas Edison," Wikipedia, 23 November 2014. [Online]. Available: http://en.wikipedia.org/wiki/Thomas_Edison#Electric_power_distribution. [Accessed 17 April 2015].
[2]
"Electricity," AEP Energy, [Online]. Availablehttp://www.aep.com/investors/FinancialFilingsAndReports/AnnualReportsProxies/. [Accessed 17 April 2015].
[3]
"Annual Reports and Accounts 2013," taqaglobal, 31 Decmber 2013. [Online]. Available: http://www.taqaglobal.com/~/media/Files/T/Taqa-Corporate/reports/taqa-ar2013-web.pdf. [Accessed 17 April 2015].
[4]
"Annual Report 2009," taqaglobal, 2013 December 2009. [Online]. Available: http://www.taqaglobal.com/~/media/Files/T/Taqa-Corporate/reports/en-annual-report-2009.pdf. [Accessed 20 Aprit2015].
[5]
"Share Price Table," taqaglobal, [Online]. Available:http://www.marketwatch.com/investing/stock/taqa/charts?chartType=interactive&countryCode=AE [Accessed 20 April 2015].
[6]
"American Electric Power Co. Inc. .," MarketWatch, [Online]. Available: http://www.marketwatch.com/investing/stock/aep [Accessed 17 April 2015].
[7]
Investopedia, [Online]. Available: www.investopedia.com. [Accessed 18 April2015].
[8]
YahooFinance, [Online]. Available: http://finance.yahoo.com/q?s=aep [Accessed 18 Aril 2015].
[9]
"A selection of line workers tools from 1930," elster, 15 August 2013. [Online]. Available: http://www.elp.com/articles/slideshow/2013/08/a-look-back-at-electric-utility-history/pg001.html. [Accessed 20 April 2015].
[10]
Historical view , AEP https://www.aep.com/about/history/. [Accessed 24 April2015].


Conclusion and Remarks

Overall, AEP is doing better in 2013 than 2009, while on the other hand, TAQA is totally the opposite.
In 2009, TAQA was doing better in profitability and liquidity ratios. Additionally, the stock value had an increase.
For the year 2013, AEP was in general performing better in all aspects except the operating margin ratio that implies they should decrease their costs.
AEP had recovered from the 2008 economic crisis as the stock price had grown, whereas the other company remained almost at the same stock value before the drop in 2013.
The graph of the stock price is a confirmation for our financial ratios analysis.



Financial Ratios
measure of a company's ability to use its assets to generate sales or revenue. A higher number is preferable, since it suggests that the company is using its assets efficiently to make money
measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc.
Total Asset TO= -
 
Operating Margin = -
 
The higher the better
The higher the better
Share Price Variations 2009-2013
Financial Ratios
The high value of PE indicates that investors are expecting higher revenue growth in the future which is good.

A high equity multiplier indicates that a larger portion of asset financing is being done through debt and vice versa
Price/Earning = h -
 
Equity Multiplier = -
 



The higher the better
The lower the better
Financial Ratios
indicates the efficiency of management in generating earnings

ROE measures how much profit a corporation generates with the money shareholders have invested.
Return of Asset= -
 
Return of Equity= -
 
The higher the better
The higher the better

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www.investopedia.com
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https://www.aep.com/about/history/.
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http://www.taqaglobal.com/investors/share-price-information/share-price-table?sc_lang=ar-ae
Share price
http://www.taqaglobal.com/~/media/Files/T/Taqa-Corporate/mtn-documents/2010-ac-31-dec-taqa-english.pdf
Interest
http://www.taqaglobal.com/~/media/Files/T/Taqa-Corporate/sustainable-development/2012/en-sustainable-development-report.pdf

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http://www.elp.com/articles/slideshow/2013/08/a-look-back-at-electric-utility-history/pg001.html
http://en.wikipedia.org/wiki/Thomas_Edison#Electric_power_distribution

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