Vodafone Accounting Ratios

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Submitted By cescfabregas4
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Accounting Project FAC210 / Dr.Doaa Abdu * Liquidity Ratios: 1. Current Ratio =Current AssetsCurrent Liabilites = 13029/27947 = 0.47 (2009) = 14219/28616 = 0.50 (2010) Comment: Current Ratio shows the company's ability to pay its short term obligations by its current assets. The ratio is better when higher and it improved from 2009 to 2010 2. Quick Ratio =Current Assets-InventoryCurrent Liabilites = (13029-412)/27947 = 0.45 (2009) = (14219-433)/28616 = 0.48 (2010) Comment: Quick Ratio shows the company's ability to pay its short term obligations by its easy to convert to cash assets, which the inventory isn't. The ratio is better when higher and it improved from 2009 to 2010 * Activity Ratios 1. Inventory Turnover =Cost of goods soldInventory = 25842/412 = 63 times (2009) = 29439/433 = 68 times (2010) Comment: A ratio showing how many times a company's inventory is sold and replaced over a period. The higher the better and it improved from 2009 to 2010 2. Average Collection Period =Accounts RecievableSales per day = 7662/ (41017/365) = 68 days (2009) = 8784/ (44472/365) = 72 days (2010) Comment: This is a ratio that shows how much time it is taking the company to collect its payments owed from customers. The lower the better which means that it deteriorated from 2009 to 2010

3. Asset Turnover =SalesTotal Assets = 41017/152699 = 0.27 (2009) = 44472/156985 = 0.28 (2010) Comment: This is ratio showing the amount of sales generated for every dollar's worth of assets. The higher the better which means it improved from 2009 to 2010 * Debt Ratios 1. Debt Ratio =Total LiabilitesTotal Assets = 67922/152699 = 44.5% = 66175/156985 = 42.2% Comment: A ratio that indicates what proportion of debt a company has relative to its assets. The lower the better…...

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