VIRGIN MEDIA

Virgin Media (UK) Working Capital



Virgin Media (UK) Working Capital

Introduction

Virgin Media is a provider of broadband internet, television, mobile telephony and fixed line telephony services that provides a variety of entertainment and communications services to residential and commercial customers throughout the United Kingdom. In addition, company provides a portfolio of voice, data and internet services to businesses, public sector organizations and service providers in the United Kingdom through Virgin Media Business. Company has two segments: Consumer, which includes the distribution of television programming over its cable network and the provision of broadband and fixed line telephone services; and Business, which includes the voice and data telecommunication and internet services.

Virgin Media is a leading provider of entertainment and communications services in the UK. It offers quad-play broadband internet, television, mobile telephony and fixed line telephony services. The company primarily operates in the UK. It is headquartered in New York City, New York and employs about 12,400 people.

The company recorded revenues of £3,875.8 million ($5,993.3 million) during the financial year ended December 2010 (FY2010), an increase of 5.8% over 2009. The operating profit of the company was £321.9 million ($497.8 million) in FY2010, compared to operating profit of £132 million ($204.1 million) in 2009. The net loss was £141.4 million ($218.7 million) in FY2010, compared to a net loss of £357.8 million ($553.3 million) in 2009.

The financial performance of Virgin Media shows that the major portion of the company's current assets is comprised of current liabilities; which is not a good indication for the company. However, the company's cash flow per share seems good or satisfactory but it should be high as compare to the liabilities. In addition to this, the revenue to assets reflect that the Virgin Media's assets structure is not in good shape which shows that the company can face difficulty in short term financial obligations that is due to the current liabilities some sort of financial loss may occur. In addition to this, past studies states that the financial analysis are to determine whether there are liquidity problems, the study of working capital determines the evolution of the company and shows the efficient and effective use of working capital.

Key Financials

(In GBP as of 12/31/2011)

Income Statement

Revenue

3,992m

Net Income

76m

EPS from Continuing Operations

0.24

EPS - Net Income - Diluted

0.24

Revenue per Share

12.87

Balance Sheet

Total Assets

7,939m

Total Liabilities

7,300m

Shareholders' Equity

639m

Total Assets per Share

27.69

Net Assets per Share

2.23

Cash Flows

Cash from Operations

1,149m

Cash from Investing

-315m

Cash from Financing

-1,001m

Capital Expenditures

657m

Cash Flow per Share

3.64

Research

The working capital policies of Virgin Media are associated with decisions made by directors of finance in relation to levels of assets and liabilities that are set to perform the operations of the company. These levels have a direct impact on the binomial risk - business profitability. The bases underlying the association of the levels of assets and liabilities with the levels of operation, the contents of each of the working capital policies of Virgin Media, investment and financing in the short term as well as their impact on the alternative risk that is the profitability (Moon and Bates, ...