Activity 3 - Vodafone profit margin
Use the database in this section of this site to find the data you need to calculate the gross and net profit margins for Vodafone plc ... be ready, there are some losses to deal with here.
You use this table to enter your results.
| Vodafone plc | ||
|---|---|---|
| Profitability | 31 Mar 2002 | 31 Mar 2001 |
| Gross Profit Margin | ||
| Net Profit Margin | ||
Did you get this?
Let's discuss what these results mean.
Firstly, Vodafone has, compared to the Carphone Warehouse, an apparently healthy gross profit margin: Vodafone's gross profit margin is around 40% compared to the Carphone Warehouse's gross profit margin of around 25%.
However, look at the net profit margin: something strange is happening to Vodafone because it has made a net loss for both of the two years. Take a look at Vodafone in the database for more information on what might have gone wrong. Vodafone's operating expenses have increased by £8 billion over the year whilst turnover has increased by £6.2 billion; and the cost of sales has increased by £4.7 billion. The net effect of these changes is that losses have gone from -6.9 billion to -12.7 billion: a huge increase in the net loss.
So, even though the businesses are in the same industry, they have very different results, we can say they have very different 'profiles'.
Why not try some more profitability questions?
Additional notes are available on advanced profitability or you can move on to the Rate of Return section.
Source:
http://www.bized.co.uk/
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