A financial statement analysis of adc telecommunications

Sincethe company has successfully weathered the tumultuous transformation process of technology.

A financial statement analysis of adc telecommunications

Sincethe company has successfully weathered the tumultuous transformation process of technology. Today, ADC Telecommunications exclusively focuses on manufacturing computer-networking equipment.

The company currently focuses on enabling communications service providers to deliver high-speed services to residential and commercial customers. The following is an annual analysis of ADCT's financial ratios of years This dramatic increase indicates current investors are placing more value on future earnings as compared to previous years.

One-reason ADCT investors pay more to own the stock is the growth potential in the communication equipment sector. For example, Internet traffic doubles every days, illustrating the growth potential for ADCT's sales and bottom line earnings Annual Report, Investors are currently willing to buy the stock at an inflated price due to two main reasons, the company's future earning potential and present growth rate in the industry.

This decline indicates that ADCT may not be utilizing its assets properly. One explanation for the decrease is ADCT's acquisitions. Recent acquisitions require additional long-term debt and are reflected in the ROA reduction in However, this trend is recent and may be viewed only as a temporary adjustment until the financial statements are released.

One explanation for this is found on ADCT's income statement. There is a significant drop in net income in verses Non-reoccurring charges were , and 9, for years and respectively. These increased expansion costs decrease net income, thus reducing the ROE ratio for ADCT must focus on revenue generation from these recent acquisitions to improve the return on shareholders equity.

The industry comparisons of gross margin averages are One reason for exceptional gross margin performance is ADCT's sales mixes, sales volume, lower component costs and consolidation through acquisitions.

A financial statement analysis of adc telecommunications

ADCT's gross margin is 10 percent higher than the industry average, illustrating another aspect of the company's high profitability. ADCT's profit margins are 9. This sudden drop in can be attributed to the previously mentioned decrease in net income in due to non-reoccurring charges.

This drop in can be viewed as a temporary decline until compared to the financial statements for ADCT. The EPS trend is a gradual increase from and a sudden drop in These figures reflect ADCT's reduced net income due to increased non-reoccurring expenses and the issuance of 45, shares on the NASDAQ market to raise additional revenue for expenses.

Despite expansion expenses, ADCT still remains very profitable. Both gross margins and EPS indicate strong profitability. A weak profitability margin in reflects increased expansion expenses and can be viewed as temporary until the Annual Report is available.

A financial statement analysis of adc telecommunications

Industry asset turnover ratios are 1. ADCT's asset turnover ratio trend remains constantly lower than industry averages. This suggests that ADCT is not properly using its assets to generate sales revenues. Competitors are more efficient by creating more revenues with fewer assets, as compared to ADCT.

An increased profit margin would improve the current use ofMark Chorazak is a partner in the Financial Services Group. Mark represents financial institutions on a wide range of bank regulatory, transactional and compliance matters.

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ADC TELECOMMUNICATIONS INC Quarterly Report (Q) NOTES TO THE Analytics: Enter your Email for a Free Trial: The following is an excerpt from a Q SEC Filing, filed by ADC TELECOMMUNICATIONS INC on 9/14/ and Management's Discussion and Analysis of Financial Condition and Results of Operations prior to the record dates of the.

as financial statement elements, 46– in FX market, – Analysis, Recommendations, and Actions [Standard of Professional Conduct V]) ADC Telecommunications, – AD curve. see aggregate demand curve Additional Compensation Arrangements. Essay about ADC Tellecommunications Financial Ratio Analysis - ADC Tellecommunications Financial Ratio Analysis Corporate Background ADC Telecommunications (ADCT) is a communication equipment manufacturer located in Minneapolis, Minnesota, USA.

The SWOT analysis includes the in-depth analysis of company’s operational as well as financial performance, and the industry and country level analysis in which the company operates ((which includes the PEST analysis also).

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Major companies covered In Technology industry, the major companies covered include ADC Telecommunications, AMD. Semi-Annual Financial Statement – as at June 30, Semi-Annual Financial Statementsas at June 30, Statement of Investment Portfolio as at June 30, No.

of Average Fair may differ from this sensitivity analysis and the difference may be material.

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