This quick snapshot gives us some idea of Vodafone. Taking a look at the Beta figure of 1.3, This tells us something of the volatility of the firm in relation to the market. It is a measure of how Vodafone shares react to changes in the market. A Beta of 1.0 says that a share's price is well correlated with the market.

Multiple Regression Analysis

R Square

The R square value of 0.9952 shows a very high level of fit. 88.85% of the variation of the dependent variable RoA is explained by the independent variables EPS normalised, PE Ratio and Dividend Growth.

Significance Levels F and P statistics

Significance level F indicates the statistical significance of the Multiple Regression analysis. The significance F value is 0.007059. This is less than 0.05, therefore the F level is statistically significant. Similarly, considering the P values, EPS Norm is less than 0.05, so this metric is statistically significant. PE and DividendGrowth are greater then 0.05, so these values are not statistically significant.

Regression Equation and the Coefficients

The equation of this regression analysis is RoA = EPSNormalised + PERatio + DividendGrowth. Inserting our calculated coefficients this becomes RoA = EPSNormalised * 16.05444 + PERatio * -0.03626 + DividendGrowth * 0.062689. This indicates a very large positive relationship between RoA and EPSNormalised, a negative relationship between RoA and PERatio (for each single unit increase in PERatio the RoA will decrease by 0.03626), and a positive relationship between RoA and DividendGrowth. Don't forget the P values of PE and DividendGrowth.

Sources

http://financials.morningstar.com

Vodafone balance sheets

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