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Financial Management Analysis of Vodafone Plc | Report

   

Added on  2019-09-16

18 Pages3248 Words145 Views
Financial Management Analysis1

ContentsIntroduction......................................................................................................................................3Financial Performance Analysis......................................................................................................4Liquidity analysis.........................................................................................................................5Profitability analysis....................................................................................................................7Efficiency analysis.......................................................................................................................9Capital structure.........................................................................................................................10Stock market performance.........................................................................................................11Limitation of analysis....................................................................................................................13Recommendations..........................................................................................................................15Conclusion.....................................................................................................................................16References......................................................................................................................................172

Introduction Financial management analysis can be referred to as a process of analysing of financialperformance of an organisation. Main objective of such analysis is to determine the financialhealth and future prospective of an organisation. Financial management analysis is an importantbusiness tool as it helps management of an organisation in strategy development. It also helpsstakeholders such as shareholders, government, creditors, lenders etc. to evaluate theirinvestment in the organisation (Brigham and Ehrhardt, 2013). There are various techniqueswhich can be used for financial management analysis such as vertical analysis, horizontalanalysis, ratio analysis, etc. Financial statements of an organisation play a very important role inthis process as this analysis is done on the basis of financial statement prepared by theorganisation. All the above mentioned techniques of financial management analysis are based onfinancial statements (Van Horne and Wachowicz, 2008). In this report we will try to understanddifferent aspects of financial management analysis with the help of financial analysis ofVodafone Plc. Vodafone Plc. is an British multinational telecommunication company withsubsidiaries in Asia, Africa and Europe. As of 2016, Vodafone is eight largest company listed onUK stock exchange with a market capital of approximately £52.5billion. Vodafone ownsnetwork in around 26 countries and has partnership networks in more than 50 countries. Hence itcould be said that Vodafone of among one of the largest telecommunication companies in theworld. In this report we will analyse financial statement of the company of last 3 years todetermine its financial health and future prospective.3

Financial Performance AnalysisIn this part of the report we will try to analyse the financial performance the company over thelast five years. For proper and efficient evaluation this category has been divided into five subparts i.e. Liquidity, profitability, efficiency, capital structure and stock market performance. Allthe data for the calculation has been taken from the annual reports published by the company atthe end of the financial year (Healy and Palepu, 2012.). Relevant financial data- Financial data on which majority of ratio analysis is based on is as follows- Particular 2016 2015 2014 Revenue 40,973.00 42,227.00 38,346.00 Gross profit 10,538.00 11,345.00 10,404.00 PBT -449.00 1,095.00 -5,270.00 PAT -3,818.00 5,917.00 59,420.00 EPS -basic -15.08 21.53 42.10 -diluted -15.08 21.42 41.77 Non-current assets 1,05,569.00 1,02,726.00 97,118.00 Goodwill 22,789.00 22,573.00 23,315.00 Other intangible assets 23,979.00 20,953.00 23,373.00 Current assets 28,144.00 19,847.00 24,722.00 Inventory 565.00 482.00 41.00 Equity 67,317.00 67,733.00 71,781.00 Non-current liabilities 33,001.00 25,943.00 25,020.00 4

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