Vodafone Group PLC - Essay Example

We will use the same conduct fundamental analysis of the company to assess whether the stock is likely to increase or decrease in value in the short- and long-term and whether the stocks current price is an accurate reflection of its value (Street.com, Inc.,2007) Revenues exhibited growths within the range of 10% to 33% for the last five year period except for the decline from 2004 to2005 by 21%. Despite the decline in 2005 from 2004, gross margins were noticeably high from 29% for the years 2003 and 2004 respectively and still high at 22% and 21% respectively for the years 2005 and 2006 respectively.

This means that decline in company revenues for a given year which could have been an indication of lower output did not cause the company to suffer the decline in terms of productivity or efficiency since the gross margins were still high, although the decline was still felt since the gross margin from2004 to 2005 also declined from 29% to 22%. The apparent decline in mark up due to decline in revenues from 2004 to 2005 was remarkably offset by the increase in bet profit margin relative to the years where changes were noted.

The lower gross margin for the year 2006 and 2006 as against 2004 and 2003 did not necessarily resulted to lower net profit margin for the corresponding years under study, since net profit margin for the years 2006 and 2005 stood at both similar rates of 22% which were surprisingly higher than for 2004 and 2003 respectively. This difference in the results could only mean better efficiency for the years 2006 and 2005 over the year 2004 and 2003. Viewed from perspective of improving management performance in terms of efficiency, the management has indeed shown resiliency and disciple for the latter years as compared against the earlier years.

This is however not to lose the remarkable achievement net profit margin 1n 2002 which got reflected at 69%. What clearly showed an increasing trend without sign of going down are the