Financial Ratio Summation
Vodafone Financial Ratio Summation Analysis
A financial ration is a crucial instrument that aids companies and business
organizations in analyzing and, comparing financial information in all sectors of the company
or the whole business empire. Conversely, they are numbers drawn from the income
statement and cash flow of a company that allows one individual to have a calculation of
different types of financial ratio for all kind of business. Commercial ration is a tool that can
be used is assessing the overall success of a business. The financial ratio encompasses some
key areas such as leverage ratio, efficiency ratio, profitability ration, liquidity ratio and
market value ration. A leverage ratio is a tool that measures the capital within the debt, often
called a debt ratio. The efficiency entails how a company is using its resources and assets
well. The profitability ratio covers the general profit of a company and liquidity the ability of
a company to meet its short term and long-term objectives and obligation (Kadam, 2020).
However, it is important to note financial ration analysis is applicable regardless of the size of
the company or firm. This paper seeks to analyze and look into the Vodafone commercial
ration in recent previous years.
Vodafone is a British telecommunication company with its headquarters spread across
all continent with main offices based in London. Annually, the Vodafone company provide
information and report on their financial matters to the general public, and this usually
happens in April of every year (Ang, 2016). The Vodafone fiscal analysis is generally on
comprehensive coverage and detailed. The profitability ratio of Vodafone is what the paper
will major in, the profitability ration is what is used in the company to look on how the
profitable the business is operating. In 2019 report, Vodafone recorded an increment in their
profit outcome as compared to the previous years. The profitability rank distribution ranked
them at number seven, though this concept cannot be used as a measure of company strength.
The gross profit stood at an increase of 1.4%, the gross profit in 2018 was at 39.22%
VODAFONE FINANCIAL RATIO SUMMATION ANALYSIS 3
compared to the one in 2019 that rose to 40.62%. The increase was linked to the widespread
of their mobile money transfer that is now almost applicable in all nations. The net profit is
also another factor of consideration when calculating profitability ration. The net profit is
accrued after the company has paid for all other expenses. The net profit is a tool that the
company can use in making a comparison with the previous years. The net profit of
Vodafone as at 2019 shows a trading loss of 0.1 billion dollars as compared to the previous
years. The slight drop could be blamed on the prevailing world pandemic of coronavirus,
which affected several operations of the business in the world.
In conclusion, the financial ratio is a useful tool for measuring the success of a
business operation. The success of any business operation will be dependent on the booking,
keeping in terms of functional analysis of the financial ratio. Hence, it is prudent for any
business to analyze and calculate their financial rates annually.
VODAFONE FINANCIAL RATIO SUMMATION ANALYSIS 4
Ang, R. (2016). Vodafone Global Telecommunications: Optimizing Operations. IUP Journal
of Operations Management, 15(4), 46.
Kadam, A. N. (2020). Research Paper on Corporate Social responsibility With Special
Reference to Telecommunication Industry Airtel And Vodafone Literature
review. Studies in Indian Place Names, 40(27), 1170-1179.