Financial Eveluation of Vodafone Essay

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Finance analysis of the performance of Vodafone Group Plc.

Current Position
Chief Executive Comments
Ratio Analysis Profitability Liquidity and Control of Working Capital Return on Capital Investors' Ratios
Sources of long-term finance
Shareholders wealth
Dividend Policy
Mergers and Acquisitions
Efficient Market – are Vodafone's share priced fairly
Future prospects


This project sets out to give an overview of the current financial position of Vodafone Group plc and its prospects. The position is analyzed by looking at accounting ratios over the last few years, and by an examination of sources of long term finance, gearing, shareholders wealth, dividend policy and
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These pressures have been added to by interventions from the regulator requiring the company to cut charges to consumers.
Vodafone is the market leader in the UK. In terms of retail revenue market share in the first quarter of this year the company had 32.5% of the market compared to its rivals Orange (25.7%), O2 (22.4%), and T-mobile (19.4%). Oftel the telecommunications regulator states that demand is strong and still growing for mobiles. UK mobile subscribers exceeded 50 million during the period April to June 2003, and in May 75% of UK adults owned or used a mobile phone. Call volumes increased by 5% and messaging volumes by 4% in the first quarter. However, the Klondyke period of growth in the UK, during which people were buying and using mobile phones for the first time is clearly over with sales year on year change down from the heady height of 90% to still very substantial level of 32 % in 2003. The expectation must be that the company will find it difficult to maintain even this level of growth in a highly-competitive market that is moving towards stability.

Financial Performance

In his latest annual report the Chief Executive of Vodafone, Sir Christopher Gent commented:

"These figures demonstrate continued strong operational performance and are in line with or slightly better than our expectations when we provided our
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