Maria G. Rodriguez
Financial Statement Analysis
Professor Wendy Achilles
August 19, 2011
Executive Summary The following is financial analysis comparing the most recent three years of data from communications company Verizon. The competitor to be compared is the most recent year of at&t. The most recent year will begin at 2010 and go as far as 2008. This includes an analysis of both financial ratios and common size percentages. In the analysis for ratios will be included an analysis to compare industry averages. Verizon demonstrates to be favorable when comparing the competitor of at&t and the industry average in most categories. These two competitors lead in their industry of communications. The ratios and common size statements can be found at the end of this analysis for comparison of numbers as an excel attachment.
Verizon is a company that provides telecommunications services. The services include both voice and data networks. In the recent years the company has moved towards focusing on selling more data services such as netbooks, tablets and data cards to connect other Wi-Fi enabled devices. Amongst the voice services includes landline phone and cable where permitted. Verizon Employs over 85,000 employees nationwide and runs over 2,000 company operated stores. There are also telesales, Technical support and customer service departments nationwide in call centers. Basic company information can be found on Verizonwireless.com in the “About Us” section.
The company prides itself in having “the nation’s most reliable network”. This statement is backed by many third party tests done every year. When it comes to consumer reviews, it is agreed that the company provides a reliable signal and in a real world environment they also have the fastest speeds. For the landline side, Verizon is recognized for quality in services for cable and internet. The company has adapted to the changing industry with the decline in home phone services requested in the consumer sector.
In recent years Verizon purchased a spectrum referred to as LTE or Long Term Evolution. This new network is the next generation in technology to provide more reliability and faster speeds. It was purchased to have a competitive advantage upon its completion. It is set to cost one fifth to maintain compared to the current CDMA network. The data speeds are expected and have been tested to be ten times faster than the current network. The new LTE network has been launched in many markets already but is not expected to be complete until the year 2013.
Operations and Products/Services The key products or services for Verizon are the data services for wireless, the cable and internet offered for communications and the landline phone services for the business sector. The competitor for Verizon is at&t. They compare the closest in the industry because both have a wireless sector and similar services for communications. Both companies have similar key services offered. Those same key services are the key managers for either company. Both companies remain strong in the industry and compete highly. It is difficult for other competitors to do as well due to these two companies having both a wireless and landline sector. Every year they compete closely with the number of customers both companies have. In recent years Verizon purchased ALLTEL, which put them at a higher number of customers. In the past year at&t purchased T-mobile, making for now more customers than Verizon when the purchase is complete. At&t is already a combination of the old Cingular and at&t plus the landline sector. The purchase of ALLTEL had a smooth transition in combining into Verizon as far as employees, customers, billing systems and networks. The transition for T-mobile has not been determined since that process has not begun yet. The purchase for at&t can be good