Question

Vodafone is based in the United Kingdom. Selected data from Vodafone’s 2012 annual report follows (pounds in millions).

		2012		2011		2010
Revenues		$46,417		$45,884		$44,472
Gross profit %		32.04%		32.84%		33.80%
Operating profit		11,187		5,596		9,480
Net cash flow less capital expenditures		8,459		9,173		9,145
Net earnings		7,003		7,870		8,618

In its 2012 annual reports, Vodafone states, " Our leading performance is based on 3 core strengths. The successful implementation of our strategy to generate liquidity or free cash flow from non-conrolled interest.'

(a) Compute the percentage change in sales, operating profit, net cash flow less capital expenditures, and net earnings from year to year for the years presented.

(b) Evaluate Vodafone's performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for vodafone's strategy? Explain.

Answer 1

Answer :-

(a).percentages:-

Given information,

	2012	2011	2010
Rrevenues	$46,417	$45,884	$44,472
Gross profit %	32.04%	32.84%	33.80%
Operating profit	11,187	5,596	9,480
Net cash flow less capital expenditures	8,459	9,173	9,145

Net earnings

7,003

7,870

8,618

• Here, we need to find the percentages in change in sales, operating profit, net cash flow less capital expenditures, and net earnings from year to year for the years presented.

	2012	2011	2010
% change in sales	1.16%	3.18%
% change in operating profit	- 9.991%	4.097%
% change in net cash flows less capital expenditures	7.783%	- 3.06%
% change in net earnings	- 1.101%	8.674%

NOTE:-

Here, we need to use this formula for finding the percentages ,

percentage = (previous year value - present year value) / (previous year value * 100)

percentages in 2012:-

change in sales = (45884 - 46417) / (45884 * 100)

= (- 533) / (45588400)

Change in sales = 1.16%

• similarlly ,do the same process for remaining ons's.

here ,we are not finding the percentage for 2010 year why because we don't have the previous year values .

(b).Performance of vodafone's:-

• Vodafone's execution as far as likelihood has not been honorable.
• Net income have been diminishing year on year somewhere in the range of 2010 and 2012. there was a lukewarm development in free trade streams out 2011, trailed by a sharp decline in 2012.
• Deals development has been extremely humble in 2012 when contrasted with 2011.
• Working benefits which had dove by 41% out of 2011,has seen an exceptionally solid bounce back in 2012.
• On the off chance that we disregard the unusual working benefit execution in 2011,the rate increment in working benefit in 2012 When contrasted with 2010 was 18% that is ideal.