Financial Analysis - Vodafone & Spring

In: Business and Management

Submitted By hanumica
Words 5042
Pages 21
Financial Statement Analysis
The income statement for Sprint Nextel Corp. ( whose fiscal year is January – December, with all stated values in USD) for the years 2009, 2010, and 2011 shows a small increase in sales growth (3.43%) with a larger amount of gross income growth (11.14%) meaning that the cost of goods sold, as well as depreciation and amortization expenses must have decreased. Also, net income fell from 2009 to 2010 by 42.24%, explained by increased income tax and equity in affiliates. Total current assets grew due to an increase in cash and accounts receivables turnover Meanwhile, Vodafone Group PLC (with a fiscal year of April – March, with stated values in GBP) has had a relatively constant net income and EBITDA in 2010 and 2011.Its balance sheet shows an increase in current assets with a decrease in total assets due to a reduction in long-term investments. Consequently – current and total liabilities for Vodafone also fells during the years (Marketwatch, 2012).
Financial Performance: Financial Ratios, DuPont Analysis, Additional Factors
One of the basic measures of liquidity – the current ratio, displays that both Vodafone’s and Sprint Nextel’s liquidity has been rising in the past three fiscal years with Vodafone’s current ratio increasing from 0.47 in 2009 to 0.50 in 2010 and ending at 0.63 in 2011 while Sprint Nextel’s current ratio in 2009 was 1.27 with a drop to 1.25 in 2010 and growing to 1.59 in 2011. In this regard, Vodafone’s current ratio is extremely low compared to the IT industry average of 1.67 for 2011. Sprint’s liquidity is reasonably consistent in comparison to the industry. On the subject of debt – Vodafone has lowered its ratio over the past three fiscal years while Sprint’s level of indebtedness has risen. Vodafone’s debt ratio fell from 44.5% in 2009 to 41.3% in 2011 while Sprint’s rose from 69.4% in 2009 to 77.8% in 2011. The…...

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