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Vodafone Group PLC

Vodafone Group PLC

Overview of the Company

Vodafone Group Plc is one of the largest British multinational telecommunications mobile network companies that headquartered in Newbury in England. In term of subscribers and revenues, Vodafone has been second-largest mobile telecommunications in the world.

Vodafone has been operating in more than 30 countries and has network partners in 40 additional countries. Company has been listed on London Stock Exchange and also a part of FTSE 100 index.

During 2012, company was able to generate revenues of £46,417m while it was £45,884 in 2011. Moreover, in 2012 EPS of Vodafone Group PLC was 13.74 while it was higher in 2011 due to higher net income in 2011 £7,870 as in 2012, net income was £7,003 (Vodafone group PLC annual report, 2012, p. 7)

Part A: Accounting Ratios

Ratios Analysis

Ratios

Formula

2012

2011

Liquidity Ratios

Current Ratio

Current assets/ Current Liabilities

0.83

0.63

 

 

Gearing Ratios

Debt to Equity Ratio

Total Debt / Total equity

0.45

0.44

Time Interest Coverage

EBIT / Interest Expense

329.1

72.25

 

 

Profitability ratios

Profit Margin

Net Income / Net sales

15.09%

17.15%

Return on Equity

Net Income / Total Equity

8.96%

8.99%

ROCE

EBIT / (Total Assets - Current Liabilities)

8.26%

7.65%

 

 

Efficiency ratios

Account Receivable Turnover

Net Sales/ Account Receivables

4.320

4.95561

 

 

Investors Ratios

Dividend yield

Dividend per Share/Current Share Price

1.97403

1.79775

Earnings per Share

Net Income/ Shares Outstanding

13.74

15.2

Analysis

Vodafone Group PLC liquidity trend has been increasing, but as it is lower than 1 which state that company is not so much sufficient to overcome their short term obligations. In 2012, it was 0.83 while it was 0.63 in 2011. The reason for this increase is due to the increase in receivable as well as in cash on hand. Hence, liquidity position of Vodafone Group PLC is not supportive for company to pay off their short-term obligation on time. As far as gearing ratios are concern which indicates company debt management, in 2012 Debt to Equity Ratio was 45% while it was 44% in 2011. This is due to reduction in ...