Analysis of Verizon Communications

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Analysis of Verizon Communications Verizon Communications formed by the merger of two big and successful companies, Atlantic Corp. and GTE Corp., is the largest telecommunication company. The company serves large part of the market in United States. However the company faces certain strengths and weaknesses which affect the way company formulate its strategies. Internal Analysis: The IFE (Internal Factor Evaluation) matrix summarizes the major strengths and weaknesses of Verizon Communications. KEY INTERNAL FACTORS WEIGHTS RANKING SCORE Strengths 1. Employee satisfaction. .05 3 .15 2. Well positioned company. .15 3 .45 3. Increase in revenue and EPS. .10 3 .30 4. Offering fiber-optic lines. .20 4 .80 5. Largest directory publisher. .05 4 .20 Weaknesses 1. Not much emphasis on R&D. .05 3 .15 2. Not yet achieved its goal. .05 2 .10 3. Global coverage. .10 3 .30 4. Poor financial position. .20 4 .80 5. Technological competencies. .05 2 .10 TOTAL 1.00 3.35 Strengths 1. Verizon communications has announced salary raise and job security for their employees which will result into increase in employee morale (management). 2. Verizon serves 49 out of the top 50 markets in United States which implies that the company is well positioned among its competitors (marketing). 3. There is increase in the company's revenue and Earnings per share (EPS) which will attract investors to invest their money in the company (finance/accounting). 4. Verizon's plan to offer extended fiber-optic lines to homes and businesses will give the company competitive advantage against cable companies (production/operations). 5. Verizon Communications is the largest telephone directory publisher in the world. Weaknesses 1. Veri... ... middle of paper ... ...s an insignificant change in Avon's sale figures (finance/accounting). FINANCIAL RATIOS FINANCIAL RATIOS 2002 2001 Liquidity Ratios Current Ratios 1.03 1.29 Quick Ratios 0.72 0.87 Leverage Ratios Debt to Total Asset Ratio 1.03 1.02 Debt to Equity Ratio -27 -43.3 Long Term Debt To Equity Ratio 0.23 0.38 Times Interest Earned Ratio 16.06 9.7 Activity Ratios Inventory Turnover 10.03 9.72 Fixed Asset Turnover 3.98 3.84 Total Asset Turnover 1.85 1.87 Accounts Receivable Turnover Average Collection Period Profitibility Ratios Gross Profit Margin 0.14 0.12 Operating Profit Margin 0.13 0.11 Net Profit Margin 0.08 0.07 Return On Total Assets 0.16 0.13 Return On Stockholders' Equity 0.16 0.13 Earnings Per Share 2.26 1.87 Price-Earning Ratio Growth Ratios Sales 0.03 Net Income 0.2 Earnings Per Share 0.2 Dividend Per Share

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