Complete 9 pages APA formatted article: Wireless Phone Services Provider Vodafone. According to Reuters (2005) analysts’ opinion, the company is outperforming currently (financial ratios provided can be seen in Appendix 1).
The group turnover was 34,133 m on the year ended March 31, 2005, which was 33,559 in 2004 and 30,375 in 2003 (Vodafone Annual Report, 2005, p. 78). Presented in percentage, the growth of turnover in 2003/04 was 10.4% and in 2004/05 it was 1.7%. The rise of group turnover represents the addition of new customers and the increase in revenue from value added services. Looking at the five-year annual growth of turnover given in diagram 1 it can be easily seen that the company’s rate of expansion is decreasing. During previous years the company was rapidly expanding due attraction of new customers. now the customer audience of Vodafone is stable. The interim results of six months ended September 30, 2005, show that the group turnover has increased 9% to 18,250 m (Reuters, 2005).
Reasonably the cost of sales in 2005 has increased along with the group turnover, leading to the gross profit of 13,380 m. In 2004 gross profit was 14,098 m and in 2003 it was 12,479 m (Vodafone Annual Report, 2005, p. 88). This gives us the ability to evaluate gross profit margin providing us with the information on how much of the group turnover can cover the non-operational costs by dividing gross profit on group turnover. The following diagram shows a three-year perspective. As can be seen, there is hardly a trend can be outlined, but it can be concluded that the gross profit margin has fallen to 39.19%, indicating the rise in operating costs.
Diagram 2: Gross profit margin (%)
The group’s operating loss was 5,304 m, 4,842 m, 5,052 m in 2005, 2004, and 2003 respectively (Vodafone Annual Report, 2005, p. 78).