Friday, April 19, 2019

Financial Statement Analysis Essay Example | Topics and Well Written Essays - 1500 words

Financial report Analysis - Essay Example occupy see Appendix A. The akin behaviour may be observed in terms of operating margin and gross margins for the same age severally. These are entirely relevant evidence of poor performance for the poor performance of Vodafone. It was only for the years 2004 and 2003 that the company had compulsive gross margin. In other words, the company has in fact been losing money for the years 2003 through 2006.For purposes of examine the companys operating margin of the both companies against the industry medium, Vodafone is performing poorly compared France Telecom where average for operating margin 17% as taken from MSN (2008) under the telecommunication services. France Telecom had actually the same 17% average for the last four years while Vodafones average for the same period, was -29%. Please see Appendix A.Even in terms of Return of Assets (ROA, Vodafone had -8%, -7%, -7%, and -7% for the years 2006, 2005, 2004 and 2003 respectively wh ich faired poorly again compared with France Telecom s 6%, 23%, 19% and 32% for the same years respectively. The results of these ratios further corroborate earlier observation in negative net profit margin for Vodafone. The same less sought after or profitability is further observed in terms of Return of Equity where Vodafone showed -6%, -5%, -6%, -6% for the years 2006, 2005, 2004 and 2003 respectively which are definitely lower than that of France Telecom which showed -6%, 2%, 5%, 3% and4% for the same years respectively. Please see Appendix A. Although France Telecom also reflected negative ROE for 2006, it may be pointed prohibited that years before the company were indeed clearly more profitable.It may be asserted that two ratios have different purposes. ROA measures how efficient management of company was in terms of assets employed in lineage while ROE measures how

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