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Verizon Communications Inc. (VZ) | Profitability Analysis

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Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).


Ratios (Summary)

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Verizon Communications Inc., profitability ratios

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Return on Sales
Gross profit margin % % % % %
Operating profit margin % % % % %
Net profit margin % % % % %
  Return on Investment
Return on equity (ROE) % % % % %
Return on assets (ROA) % % % % %

Source: Based on data from Verizon Communications Inc. Annual Reports

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Verizon Communications Inc.'s gross profit margin deteriorated from 2008 to 2009 and from 2009 to 2010.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Verizon Communications Inc.'s operating profit margin deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Verizon Communications Inc.'s net profit margin deteriorated from 2008 to 2009 and from 2009 to 2010.
ROE A profitability ratio calculated as net income divided by shareholders' equity. Verizon Communications Inc.'s ROE deteriorated from 2008 to 2009 and from 2009 to 2010.
ROA A profitability ratio calculated as net income divided by total assets. Verizon Communications Inc.'s ROA deteriorated from 2008 to 2009 and from 2009 to 2010.

Gross Profit Margin

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Selected Financial Data (USD $ in millions)
Gross profit
Operating revenues
   
Gross profit margin1 % % % % %

Source: Based on data from Verizon Communications Inc. Annual Reports

2010 Calculations

1 Gross profit margin = 100 × Gross profit ÷ Operating revenues
= 100 × ÷ = %

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Verizon Communications Inc.'s gross profit margin deteriorated from 2008 to 2009 and from 2009 to 2010.

Operating Profit Margin

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Selected Financial Data (USD $ in millions)
Operating income
Operating revenues
  Operating Profit Margin, Comparison to Industry
Verizon Communications Inc.1 % % % % %
  Industry, Telecommunications % % % % %

Source: Based on data from Verizon Communications Inc. Annual Reports

2010 Calculations

1 Operating profit margin = 100 × Operating income ÷ Operating revenues
= 100 × ÷ = %

Ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Verizon Communications Inc.'s operating profit margin deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010.

Net Profit Margin

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Selected Financial Data (USD $ in millions)
Net income (loss) attributable to Verizon
Operating revenues
  Net Profit Margin, Comparison to Industry
Verizon Communications Inc.1 % % % % %
  Industry, Telecommunications % % % % %

Source: Based on data from Verizon Communications Inc. Annual Reports

2010 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to Verizon ÷ Operating revenues
= 100 × ÷ = %

Ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Verizon Communications Inc.'s net profit margin deteriorated from 2008 to 2009 and from 2009 to 2010.

Return on Equity (ROE)

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Selected Financial Data (USD $ in millions)
Net income (loss) attributable to Verizon
Equity attributable to Verizon
  ROE, Comparison to Industry
Verizon Communications Inc.1 % % % % %
  Industry, Telecommunications % % % % %

Source: Based on data from Verizon Communications Inc. Annual Reports

2010 Calculations

1 ROE = 100 × Net income (loss) attributable to Verizon ÷ Equity attributable to Verizon
= 100 × ÷ = %

Ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders' equity. Verizon Communications Inc.'s ROE deteriorated from 2008 to 2009 and from 2009 to 2010.

Return on Assets (ROA)

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Selected Financial Data (USD $ in millions)
Net income (loss) attributable to Verizon
Total assets
  ROA, Comparison to Industry
Verizon Communications Inc.1 % % % % %
  Industry, Telecommunications % % % % %

Source: Based on data from Verizon Communications Inc. Annual Reports

2010 Calculations

1 ROA = 100 × Net income (loss) attributable to Verizon ÷ Total assets
= 100 × ÷ = %

Ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Verizon Communications Inc.'s ROA deteriorated from 2008 to 2009 and from 2009 to 2010.

February 8, 2012

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