Based on these numbers from 2014 and 2015 would Verizon be a good company to inv
ID: 2467032 • Letter: B
Question
Based on these numbers from 2014 and 2015 would Verizon be a good company to invest in? Why?
Can you tell me if they are stronger/weaker, quicker/slower, more or less liquid, and more or less risk based on the industry average? I am not sure how to identify that.
Need 3 points? Also have to include Profitability, Efficiency, Liquidity, and Solvency in the points made?
Please help ASAP! Thank you :)
Industry Ratio Average for 2014 & 2015 Verizon 2015 Verizon 2014 Profitability Ratios Stronger or Weaker Return on Sales 14 Stronger or Weaker Return on Assets 15.06 7.49 3.80 Stronger or Weaker Retura on Equity 373.49 124.48 37.65 Stronger or Weaker Gross Profit Margin 41 .60 Ratios Quicker or Accounts Receivable Turnover 7.56 9.59 9.62 Quicker or Inventory Turnover 14.99 43.71 45.96 Quicker or Asset Turnover 45 .50 Ratios More or Less Current Ratio 7.92 14 12 Solvency Ratio More or Less Debt Ratio 10.24 More or Less Financial Leverage 14.89 18.92 More or Less Times Interest Earned 1.12 6.74 Free Cash Flow USD More or Less 14.5 11,213 13,086Explanation / Answer
Industry
company
status
Profitability Ratios:
Return on sales
0.3
0.14/0.08
weaker
Return on assets
15.06
7.49/3.80
weaker
Return on equity
373.49
124.48/37.65
weaker
Gross profit margin
0.41
0.60/0.61
stronger
Efficiency ratios:
AR turnover
7.56
9.59/9.62
quicker
Inventory turnover
14.99
43.71/45.96
quicker
Asset Turnover
0.45
0.55/0.50
quicker
Liquidity ratios:
Current ratio
7.92
0.14/0.12
Less liquid
Solvency Ratio:
Debt ratio
0.85
10.24/7.44
More risky
Financial leverage
6.33
14.89/18.92
More risky
Times interest earned
1.12
6.74/4.11
Less risky
Free cash flow USD Mil
14.5
11.213/13.086
More risky
Based on the above numbers from 2014/15, the Verizon is not a good company but a very risky and weaker company. With less liquidity through higher profitability and less efficient company.
Industry
company
status
Profitability Ratios:
Return on sales
0.3
0.14/0.08
weaker
Return on assets
15.06
7.49/3.80
weaker
Return on equity
373.49
124.48/37.65
weaker
Gross profit margin
0.41
0.60/0.61
stronger
Efficiency ratios:
AR turnover
7.56
9.59/9.62
quicker
Inventory turnover
14.99
43.71/45.96
quicker
Asset Turnover
0.45
0.55/0.50
quicker
Liquidity ratios:
Current ratio
7.92
0.14/0.12
Less liquid
Solvency Ratio:
Debt ratio
0.85
10.24/7.44
More risky
Financial leverage
6.33
14.89/18.92
More risky
Times interest earned
1.12
6.74/4.11
Less risky
Free cash flow USD Mil
14.5
11.213/13.086
More risky
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