Managment

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Name: Sara Kh. Mohamed
Date: 19.Feb.13

Finalcial Management Control
Asignment 1

Vodafone Ratio Analysis
What 's the concept of Ratio? involves methods of calculating and interpreting financial ratios to analyze & monitor the firm’s performance
Liquidity Ratios
The liquidity of a firm is measured by its ability to satisfy its short-term obligations as they come due.
Current Ratio
A measure of liquidity calculated by dividing the firm’s current assets by its current liabilities.
Generally, the higher the current ratio, the more liquid the firm is considered to be.
Current ratio

=

Total current assets
Total current liabilities

1968
3877

=

1

2006

better than 2005

= 0.49
1304
2005
2672
A current ratio of 2.0 is occasionally cited as acceptable, but a value’s acceptability depends on the industry in which the firm operates & for vodafone it is not quite acceptable cuz it should have high liquidity rate due to everyday high traffic of transactions…
Quick Ratio (Acide-Test) Ratio
Quick Ratio =

1923 =
3877

0.50

2006

1280 =
2672

Current Assets - Inventory
Current Liabilities

0.48

2005

A quick ratio of 1.0 or greater is occasionally recommended, but as with the current ratio, what value is acceptable depends largely on the industry, So For VODAFONE it is not a quite perfect quick ratio neither on 2005 nor on 2006 due to the high traffic transactions of everyday they should have a higher liquidity ratio.
Inventory Turnover it measures the activity or liquidity of a firm's inventory
Inventory Turnover =

Cost of God Sold
Inventory

2299 =
45

51.1

2006

1660 =
24
As for VODAFONE the inventory turnoveris matching the industry activities

69.2

2005

Average Collection period =

$383.00 =
16.28767

23.5

2006

$364.00 =
$12.05

30.2

2005

Accout Receivable
Average Sales / day

on the average it takes the firm from 30.2 days on 2005 & 23.5 days on 2006, it's

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