Finanacial Research of Vodafone Plc 2012 Essay

Financial Analysis of

Vodafone Group Plc


AC4907 Assignment

This is a financial evaluation of Vodafone Group Plc based on

the group's twelve-monthly report pertaining to the economic year finished 31st Drive 2012.

Shane Gaughan


Student ID 0173061

Lecturer: Orla Lenihan


Vodafone Group Plc who in 1985 made its initial mobile phone call is today a global sales and marketing communications company serving over 404 million buyers in more than 30 countries across a few continents through which they work in. 20 years ago Vodafone allowed the first international mobile roaming contact and to support that Vodafone have companions in a further 40 countries which let it extend it is network beyond its fairness interests. Vodafone is one of the planet's largest suppliers with about 14, 1000 stores and the brand is rated as the utmost valuable telecoms brand in the world valued in $30bn, company rating AAA+ (Brand Finance). Vodafone's head office is in Paddington, London and employs above 86, 1000 worldwide. Vodafone Group Plc (VOD) shows up on the Greater london Stock Exchange and the NASDAQ (ADR) in New york city and contains a current reveal price of 158. 70 as of 25/11/2012 on the London Stock Exchange (LSE).

Highlights 2012

• Revenue for 2012 was over 46 billion sterling and Operating profit 14. 5 billion dollars sterling • Gross Personal savings of 12% on Euro costs above two years

• One source chain with £4. 8bn in cumulative saving over 6 years • Dividends every share growth of 7%

• Gained business in 5/7 markets

• Service income growth of 15%

• Free Cash flow of £6. 1bn

• Share £6. 8bn buyback plan nearing completion

• Special Dividend 4p per talk about from Verizon Wireless 44% stake • EPS 13. 74 pence basic and 13. 66 pence diluted (special dividend excluded) • Dividend growth forecasted in 7% intended for 2013

• Consensus amongst 35 expenditure analyst is that Vodafone can outperform marketplace • 89% of Euro Population at this point covered by Vodafone 3G

• Data customer grown to 108 , 000, 000 and info revenue by simply 22%

• £6bn per year invested attaining 4G Variety Licenses investing in IT and R& G • Earnings in emerging markets grew by 13. 2%

Economical Analysis

To get full list of ratios you should refer to appendix

Activity and Liquidity

Receivable days to get Vodafone is at 30. fifty four days for 2012, which is a noticable difference of 3 days and nights 2011 It truly is which

well worth noting that 81% of Vodafone's consumers are on prepaid representing 28% of support revenue consumers


and 12% of customers are on agreement representing 33% of assistance revenue. Payable days have remained consistent at 52 days, Inventory days unchanged at 3. 65 days and nights although not highly relevant Inventory

as majority of Vodafone revenue comes from providers rather than handset sales ( 92% 2012, 93% habits

2011). Each one of these are in comparison in chart 1 listed below against Telefonica SA one among Vodafone's opponents.


Receivable, Payable & Inventory Days





Vodafone 2012


Vodafone 2011

forty five

Telefonica 2011


Telefonica 2010




Recievable Days and nights

Inventory Days

Payable Days

Chart one particular Vodafone Vs Telefonica

Using these three ratios, the Cash Cycle rate at twenty-five. 47 displays strong cashflow generation. Even more these

emphasising this is the Top quality of earnings ratio by 1 . 1: 1, though down coming from 2011 it is nevertheless a critical indicator of Vodafone's capacity to generate money from its trading activity. Current ratio is at 0. 83 up from 0. 62 in 2011 a good improvement although even now under you and some approach off the advisable 1 . 5. However receivable days and payable times ratios are excellent and products on hand is low, which reduces any concern with the current percentage. See stand 1 for comparison with competitor Telefonica ny

Money Cycle

Current Ratio

Top quality of Revenue

Cash Cover




25. 47

3. 1

0. 83

0. 62

1 ) 14

installment payments on your 14

0. 53

zero. 44




24. forty eight

23. 64

0. sixty four

0. 62

1 . 73

1 . 01

0. 53

0. forty-nine

Table 1 Vodafone Vs Telefonica

Since 2010, Vodafone identified six non...

Bibliography: Vodafone Group Plc (2012) ‘Vodafone Annual Report 2012' [online] obtainable:

port_12. pdf [accessed 10/10/2012]

Telefonica SA (2012) ‘Annual Report' [online] offered:

Financial Occasions (2012) Vodafone Group Plc VOD Group Performance FT. com, illus, [accessed 16/11/2012]

Economical Times (2012) Vodafone Group Plc VOD Group Performance FT. com, illus [accessed 16/11/2012]

Moody's (2012)' Long Term Ranking Scale, Ranking Scale and Definitions' [online] available: [accessed


Standard & Poor's (2012) ‘Ratings Definitions' [online]: available:

Fitch (2012) ‘Definition of Evaluations and other types of opinion' [online] available:

[accessed 17/11/12]

Brand Fund (2012) ‘Top 500 Telecommunications Brands 2012' [online] obtainable: [accessed 17/11/12]

Davy Wealth Managing Ireland (2012


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