Financial Project
Verizon vs. Sprint:
A Financial Comparison
Mark Burrus
Accounting 210, TR 2:00
Dr. Jeffrey J. Quirin
April 27, 2010
Introduction The telecommunication industry has experienced substantial growth during the last 20 years, and offers frequent technological upgrades that has enabled these companies to find new revenue sources and growth opportunities. The telecommunication industry is responsible for radio, television, and broadband services, but the biggest factor of their business is through the cellular telephone market, which has also grown at an incredible rate over the past 20 or so years. In this report, I will be comparing two of the biggest competitors in this industry, Verizon and Sprint. Verizon Wireless, the largest cell phone provider in the country, was founded in 1983 as Bell Atlantic and adopted the name Verizon in 1997 after the merger with NYNEX. Sprint Nextel Corporation, the third largest cell phone provider, was founded in 1898 but became Sprint Nextel in 2005 after the purchase of Nextel Communications by Sprint Communications. It is based out of Overland Park, KS. After a brief comparison, Sprint was cheaper and offers a comparable service area. Verizon was slightly more expensive but had a better service area and customer care. I will be comparing the financial statements of the two companies over the past three years in order to determine which company would become a better investment.
Ratio Explanations and Figures * Price/Earnings Ratio: The P/E ratio, one of the most important ratios to investors, relays to investors the relationship to dividends and the market price. Investors look for higher P/E ratios, but a rate that is too high could indicate that a stock is underpriced, but a rate that is too low could indicate that a stock is overprices. Price/ Earnings Ratio | Verizon | Sprint | 2009 | 22.944 | -1.274 | 2008 | 15.033 | -0.178 | 2007 | 25.782 | -4.469 |
* Times Interest Earned Ratio: The times
A Financial Comparison
Mark Burrus
Accounting 210, TR 2:00
Dr. Jeffrey J. Quirin
April 27, 2010
Introduction The telecommunication industry has experienced substantial growth during the last 20 years, and offers frequent technological upgrades that has enabled these companies to find new revenue sources and growth opportunities. The telecommunication industry is responsible for radio, television, and broadband services, but the biggest factor of their business is through the cellular telephone market, which has also grown at an incredible rate over the past 20 or so years. In this report, I will be comparing two of the biggest competitors in this industry, Verizon and Sprint. Verizon Wireless, the largest cell phone provider in the country, was founded in 1983 as Bell Atlantic and adopted the name Verizon in 1997 after the merger with NYNEX. Sprint Nextel Corporation, the third largest cell phone provider, was founded in 1898 but became Sprint Nextel in 2005 after the purchase of Nextel Communications by Sprint Communications. It is based out of Overland Park, KS. After a brief comparison, Sprint was cheaper and offers a comparable service area. Verizon was slightly more expensive but had a better service area and customer care. I will be comparing the financial statements of the two companies over the past three years in order to determine which company would become a better investment.
Ratio Explanations and Figures * Price/Earnings Ratio: The P/E ratio, one of the most important ratios to investors, relays to investors the relationship to dividends and the market price. Investors look for higher P/E ratios, but a rate that is too high could indicate that a stock is underpriced, but a rate that is too low could indicate that a stock is overprices. Price/ Earnings Ratio | Verizon | Sprint | 2009 | 22.944 | -1.274 | 2008 | 15.033 | -0.178 | 2007 | 25.782 | -4.469 |
* Times Interest Earned Ratio: The times