Financial Performance and Position



Financial Performance and Position

Overview of the company - Vodafone

Vodafone a Public limited company is one of the known British telecommunication company which founded in and second largest mobile 1991 by Racal Telecom which was already largest maker of UK military radio technology. The company headquarter in London and in Newbury, Berkshire have a registered office. It is second largest mobile telecommunication in terms of subscriber as well as revenue in 2011 following Chinese Mobile companies. The operation of Vodafone is in more than 30 countries with 439 million of subscriber and network partners in more than 40 counties. The global enterprise of Vodafone offers its services i.e. telecommunications and IT in more than 65 countries. 45% of the portion in Verizon Wireless (U.S. largest mobile telecommunication in terms of subscribers) is owned by Vodafone (Vodafone Overview, 2012).

It is listed on London Stock Exchange as well as in the FTSE 100 Index. In 2012, the market capitalization of Vodafone was about £89.1 billion which makes Vodafone second largest company listed on the London Stock Exchange. Secondary listing of Vodafone is on NASDAQ.

Overview of the company - British Telecom (B.T)

Public limited company British Telecom (BT) is the world's oldest telecommunications company. Its origins date back to 1846, with the first commercial telegraph. It was privatized in 1982 and it is one of the world leaders in providing telecommunication solutions and services operating in more than 170 countries. Its principal activities include networked IT services, local telecommunications services, national and international products and broadband services. BT has four lines of business: BT Global Services, Open reach, BT Retail and BT Wholesale. Companies like Unilever, Procter & Gamble, are some of BT's customers.

British Telecom is listed on London stock exchange as well as on FTSE 100 index. In 2011, the market capitalization of B.T was about£15 billion which makes B.T 27th largest company listed on the London Stock Exchange. Secondary listing of B.T is on NASDAQ (British Telecom (B.T) Overview, 2012).

Financial Performance and Position

To know Financial Performance and Position information of a business, one need to gather basic data and this is easily available in the annual report. The financial condition of the company is the company's ability to survive in the market. Financial condition is characterized by the availability of funding necessary for the normal operation of the business, the appropriateness of their placement and efficiency use, financial relationships with other legal entities and individuals, solvency and financial stability. In this part, the Financial Performance and Position of Vodafone and British Telecom (B.T) will be discussed through financial ratios.

Financial Ratios

Profitability Ratios

Profitability Ratios - Vodafone Group Plc

03/31/2012

03/31/2011

03/31/2010

ROA % (Net)

4.77

5.17

5.58

ROE % (Net)

8.44

8.96

9.79

ROI % (Operating)

2.12

0.43

3.59

Profitability Ratios - BT Group Plc

03/31/2012

03/31/2011

03/31/2010

ROA % (Net)

8.41

5.75

3.55

ROE % (Net)

123.93

AvgEqty<0

AvgEqty<0

ROI % (Operating)

21.59

20.12

14.41

The profitability trend of the Vodafone is constantly diluting from 2010 to 2012 which state that company was not performing after world crisis. In 2012, due to reduction in net income while sales increased company profitability was not so much ...