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Airtel vs Vodafone Financial Ratios Analysis

The document compares the financial ratios of Airtel and Vodafone across various categories like liquidity, efficiency, profitability, solvency and working capital. It analyzes ratios like current ratio, quick ratio, inventory turnover ratio, asset turnover ratio, debt-equity ratio and concludes that Airtel performs better than Vodafone on most financial metrics.

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saihitesh adapa
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19 views2 pages

Airtel vs Vodafone Financial Ratios Analysis

The document compares the financial ratios of Airtel and Vodafone across various categories like liquidity, efficiency, profitability, solvency and working capital. It analyzes ratios like current ratio, quick ratio, inventory turnover ratio, asset turnover ratio, debt-equity ratio and concludes that Airtel performs better than Vodafone on most financial metrics.

Uploaded by

saihitesh adapa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Liquidity Ratio:

Current Ratio= Current Asset/Current liability.


Airtel(0.66)>Vodafone(0.37)
Interprets:- Airtel is more capable of paying liabilities than vodafone.

Quick Ratio=(Current Assets-Inventory)/Current Liabilities


Airtel(0.58)>Vodafone(0.35)
Interprets:- Airtel can pay liabilities without selling inventories better
than Vodafone.
Efficiency Ratio: Profitability Ratio:
Inventory Turnover Ratio = (Cost of Goods Sold)/(Avg Inventory) Operating Profit=revenue - operating expenses - cost of goods sold
Airtel(26500)<Vodafone(29800) Airtel(42.1)>Vodafone(32.3)
Interprets:- Airtel’s low turnover implies weak sales and possibly Interprets:- Increasing operating margin over a period of time
excess inventory, while Vodafone’s high ratio implies strong sales . indicates Airtel profitability is improving more compared to Vodafone.
Asset Turnover= Net Sales/Avg Total Assets.
Net Profit(%)=Net Income/Revenue.
Airtel(0.22)> Vodafone(0.17) Airtel(10.04)>Vodafone(-80)
Interprets:- Airtel is more efficient company at generating revenue
Interprets:- Airtel’s Profit margin is more compared to Vodafone.
from its assets than Vodafone.
Working Capital Ratio:
Solvency Ratio:
Account Payable Ratio= Net credit purchases/Avg accounts payable.
Debt-Equity Ratio=(Total Liabilities)/(Total Shareholders’ Equity Total)
Airtel(1.01)<Vodafone(3.32)
Inventory Days Ratio= (Cost of Avg Inventory)*365/Cost of goods sold
Interprets:-Vodafone has been aggressive in financing its growth with
debt compared to Airtel.

Equity Ratio=Total Equity/ Total Assets.

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