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Based on these numbers from 2014 and 2015 would Verizon be a good company to inv

ID: 2762145 • Letter: B

Question

Based on these numbers from 2014 and 2015 would Verizon be a good company to invest in? Why? Need 3 points? Also have to include Profitability, Efficiency, Liquidity, and Solvency in the points made?

2015 2014 Retun on Sales 14 .08 Return on Asscts 7.49 3.80 Return on Equity Gross Profit Margin Accounts 124.48 37.65 .60 61 Not given Not given Turnover Inventory Turnover 40 39 Asset Turnover 50 Current Ratio Not given Not given Debt Ratico Not Given Not Given Financial Leverage 14.89 18.92 Times Interest Earned 6.74

Explanation / Answer

Evaluation of Company performance:

Verizon is a good company to invest in because:

1. Its Return on assets has increased to almost double as compared to last year.

2. Its Return on Equity has increased to almost 4 times as compared to last year.

3. Its Financial Leverage has decreased as compared to last year.

Profitability:

Return on Sales has increased from last year. Hence it is Favorable.

Return on Assets has increased from last year. Hence it is Favorable

Return on Equity has increased from last year. Hence it is Favorable

Gross Profit margin has been maintained. Hence it is Favorable

Efficiency:

Inventory turnover has been maintained. Hence it is Favorable

Assets turnover has increased from last year. Hence it is Favorable

Liquidity:

Current Ratio and Debt Ratio are not given.

Solvency:

Financial Leverage has decreased as compared to last year. Hence it is favorable.

Times interest earned has increased as compared to last year. Hence it is favorable.

Evaluation of Company performance:

Verizon is a good company to invest in because:

1. Its Return on assets has increased to almost double as compared to last year.

2. Its Return on Equity has increased to almost 4 times as compared to last year.

3. Its Financial Leverage has decreased as compared to last year.

Profitability:

Return on Sales has increased from last year. Hence it is Favorable.

Return on Assets has increased from last year. Hence it is Favorable

Return on Equity has increased from last year. Hence it is Favorable

Gross Profit margin has been maintained. Hence it is Favorable

Efficiency:

Inventory turnover has been maintained. Hence it is Favorable

Assets turnover has increased from last year. Hence it is Favorable

Liquidity:

Current Ratio and Debt Ratio are not given.

Solvency:

Financial Leverage has decreased as compared to last year. Hence it is favorable.

Times interest earned has increased as compared to last year. Hence it is favorable.

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