Essay on Financial Statement Analysis

2399 Words Dec 16th, 2010 10 Pages
Financial Statement Analysis

MBA 6150

Financial Statement Analysis – Verizon Communications

Abstract The process of developing financial statements for a business is to provide supporting documentation to what has been reported as annual or quarterly income. Within the financial statement analysis strengths and weaknesses are identified through the comparison of data from the balance sheet. There are many different ways to interpret the data that is utilized for the analysis; those include but are not limited to comparative statements, schedule of changes in working capital, common size percentages, and ratio analysis. The following paper will be reviewing the financial data from Verizon Communications (VZ). Through the
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Financial Statements and Common Size Statements

The following financial statement shows how Verizon is doing in comparison to their competition AT&T. Based on the data provided by AT&T financial statements they are doing ok with their Income Statement. They are doing well to recognize that on a year over year basis, Verizon’s overall costs are lower than AT&T and Verizon invests heavily in their network. It is through demonstrating adapability to the changing economic times that the company continues to be profitable.

Table 1: Income Statements: amounts in millions Verizon 2008 Verizon 2007 Verizon 2006 Differences: 2008 - 2007 12/31/2008 12/31/2007 12/31/2006 Currency Currency US DOLLARS US DOLLARS US DOLLARS Benchmark 2008 Net Sales 97,354,000 93,469,000 88,144,000 $3,885,000 ($26,674,000)
Cost of Goods 38,902,000 37,547,000 34,994,000 $1,355,000 ($10,993,000)
Gross Profit 58,452,000 55,922,000 53,150,000 $2,530,000 ($15,681,000)
R & D Expenditures - - - -
Sell, General & Admin Expenses 27,003,000 25,967,000 25,232,000 $1,036,000 ($4,184,000)
Income Before Deprec & Amort 31,449,000 29,955,000 27,918,000 $1,494,000 ($11,497,000)
Depreciation & Amortization 14,565,000 14,377,000 14,545,000 $188,000 ($5,318,000)
Non-Operating Income -5,306,000 -4,257,000 -2,870,000

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