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This report will examine the cellular industries top four competitors: Sprint, Verizon, T-Mobile and AT&T. We will review the criteria which were used to select these competitors, such as the market capitalization, revenue, gross margin, operating margin, earnings per share, return on equity and market trends. We will further analyze each company, carefully reviewing their history, corporate structure, financial statements, historical stock trends covering a five year period and a complete ratio analysis. In the end we will present the industry leader and our recommendation for future investments in this company.
The cellular industry is one that continues to expand as new products and services continually make their way to the market place cause intense competition among the top players. On the surface it seems easy enough to pick out the industry leader but as we have learned from fallen companies that seemed too big to fail, careful analysis and educated projections are the best criteria to use when selecting an investment.
In selecting the companies to consider for investments we looked for cellular companies that have a market capitalization of 5 billon or higher. Revenue was important in our decision and we were looking for large revenues in excess of 30 billion but we focused on gross margin and operating margin to get a better picture of how the company is utilizing its funds. We added earnings per share and price-earnings ratio to get a sense of what shareholder could expect. We were looking for a high P/E ratio compared it the industry average which seems to be between 40-60%. The ROE and ROA helped us get an understanding of how the company is investing their assets. The operating cash flow tells the big picture about the company, it is essential that the company keep enough cash on hand to pay expenses, dividends and unexpected expenses. We...
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