Financial Statement Analysis Case Vodafone Group plc Vodafone is based in the United Kingdom. Selected data from Vodafone’s 2012 annual report follows

(pounds in millions).

In its 2012 annual report, Vodafone states, “Our leading performance is based on 3 core strengths . . . .
The successful implementation of our strategy to generate liquidity or free cash flow from non-controlled interests.”
Instructions

(a) Compute the percentage change in sales, operating profit, net cash flow, and net earnings from year to year for the years presented.

(b) Evaluate Vodafone’s performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for Vodafone’s strategy? Explain.

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2012 2011 2010 Revenues 46,417 45,884 Gross profit % 32.04% 32.84% 44,472 33.80% Operating profit 11,187 5,596 9,480 Operating cash flow less capital expenditures 8,459 9,173 9,145 Profit (loss) 7,003 7,870 8,618