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Financial Ratio Analysis for Xerox
Xerox Corporation is company in the field of technology and services, which is currently developing, manufacturing, marketing, and financing a whole range of document equipment, software, integrated solutions and services. They have a global network, with branches in more than 130 countries all over the world. In America, its products are distributed through divisions, subsidiaries and third-party distributors. In the rest of the world (Europe, Africa, Asia), Xerox is represented by Xerox Limited and by other companies wherewith Xerox has concluded distribution agreements. Xerox's customer pool is very diverse, both from a geographical and a demographical point-of-view, and ranges from low-end users, such as small and middle market businesses to high-end, high quality users like graphic arts shops, governmental entities, educational institutions and large corporate accounts.
The marketing strategy for Xerox currently concentrates on the new tendencies on the market: color and digital products. These…… [Read More]
This means that Apple is generating more cash internally than Google. Further, given the increase in cash flows from operations in the case of Apple means that the company could have an enhanced value of net income in future. hen it comes to cash flows from investing activities, there is an increase in the same in the case of Apple in the current financial year in comparison to the previous financial year. This means that the company is using more cash to enhance its competitiveness and facilitate efficient operation. Further, given that this figure is higher than that of Google in both years under consideration, it is clear that Apple is spending more on capital expenditures and/or other monetary investments than Google. In comparison to the previous financial period, Apple has also registered an increase in the figure for cash flows from financing activities. However, using the company's latest financial…… [Read More]
financial ratio analysis, a tool that shows how figures between the balance sheet and the income sheet are related. atios are used to appraise a company's past financial performance and its potential for the future. A company's financial statements are of interest to creditors, investors, financial analysts and internal accountants. Using ratios helps them to analyze the overall financial health of a business. By computing financial ratios, one is better able to evaluate a company's financial status and operating performance for a given time period.
Here are some of the advantages of ratio analysis:
It simplifies the comprehension of financial statements.
It facilitates comparisons between firms.
It highlights the factors associated with strong firms and weak firms.
It provides a helpful tool in investment decisions.
Here are some limitations of ratios analysis:
It is susceptible to personal bias by the people interpreting them.
It analyzes historical data, making its predictive…… [Read More]
Ratio analysis is not used in as widespread a manner in government as it is in the private sector. hile they are very necessary, they have to be adapted specifically to the unique problems of the public sector which is not based upon profit. These primary issues include the weaknesses in the way that the key information elements needed for the assessment financial condition is reported. Though reporting methods have improved, financial analysts in the public sector must however be knowledgeable enough to draw the appropriate information government sources. Unfortunately for the accountant, it is generally not easy to asses a government agency's financial condition only from the information in financial reporting.
This however does not mean that financial conditions cannot be assessed in the public sector
. Such assessments can be done with ratio analysis methods. At the all state government and by extention federal and local levels as…… [Read More]
There are some interesting dynamics with this case. First, Snead would not purchase this company for one penny more than the net present value of future cash flows. Second, the business cannot possibly be a sole proprietorship -- with the chemicals and the risk of damage this has to be incorporated. That means that the company can borrow, and can borrow against its assets and future cash flows. I'm not convinced that Sheldon's personal credit is relevant to borrowing for new equipment. New ventures are not going to be taken into consideration here -- neither for cash flows nor for valuation. These are all speculative, and there are no coherent dollar figures attached to it. Lastly, the assumption that Sheldon will have to pay employees more than what they are being paid now is unfounded. His uncle is not running this business solo, so there is no reason…… [Read More]
Tootsie oll Corporation
The financial ratio analysis provides a financial picture of a company that serves as a useful tool for investors, management and creditors. Management uses the financial ratios to improve a company's operating efficiency and achieving future growth. More importantly, investors and creditors use the financial ratios to evaluate financial health of a company. This report evaluates the financial ratio of Tootsie oll using the company last quarter financial statements of 2013 to measure the company's profitability and liquidity. Since Tootsie oll focuses on the manufacturing and sales of the confectionary product, the report bases the company performance on liquidity and profitability. The paper calculates the ratios from the company's balance sheet and income statements.
Objective of this report is to conduct a comparative ratio analysis of the Tootsie oll to measure the company profitability and liquidity. The report uses the company last quarter financial statements of 2013…… [Read More]
This pricing power can be applied to reducing the prices for consumers as a means of gaining market share. At this point in its life cycle, Netflix should have a cost advantage over its primary competitor, Blockbuster, in the video rental business, given its size. hen Netflix started, this was not the case, but Blockbuster failed to leverage its pricing power to undercut Netflix, and the latter firm eventually prevailed with a superior business model.
However, Netflix may not have a cost advantage over companies that act as substitutes, such as media vendors Amazon and al-Mart. Compared with those firms, Netflix does not have a cost advantage because it lacks the economies of scale over those competitors. Those competitors are at present substitutes for Netflix, but there is the risk that they could become direct competitors. As such, Netflix may wish to become larger in order to improve its buying…… [Read More]
Financial atios of a Prospective Borrower
Financial ratio analysis is a quantitative tool used to analyze financial standing of a business entity. The ratio analysis can also be used to compare financial capabilities of companies in different industries. This paper discusses how financial ratios can be used to answer questions about the management, marketing, and production capabilities of a prospective borrower. The paper also identifies ratios that demonstrate management competency and are mandatory to a financial services regulator.
atios demonstrating Production, Management, and Marketing Capabilities of a prospective Borrower
In the contemporary business environment, firms rely on loans from banks to improve their business operations. However, before a bank or other financial institutions can offer loans to organizations, they have to evaluate management competency, production, and marketing capabilities of a prospective borrower. The bank uses different financial ratios to analyze production efficiency of a prospective borrower.
An efficiency ratio is…… [Read More]
Wal-Mart is the world’s largest retailer. They operate in many countries around the world, and have over 2 million employees. The largest market for Wal-Mart is the United States. Wal-Mart is the biggest grocer in the country, one of the biggest online retailers as well. By analyzing the financial statements of Wal-Mart, one can ascertain the company’s financial health as of 2015.
Financial statements for publicly traded companies are compiled according to a specific set of rules, and a format that is established both by convention and by the governance of the Securities Exchange Commission. The value of having these rules is that the information contained in the financial statements is reliable, and comparable. Not only can one compare Wal-Mart’s financial performance across different years, but it is also possible to compare Wal-Mart’s performance against other companies in its industry.
One of the means by which financial…… [Read More]
Financial statements are essential in measuring and assessing the real financial strength and position of a company. These financial statements provide quantifiable data for reports and help an individual to obtain an understanding of a company's forthcoming forecasts and risks (Weygandt et al., 2008). The purpose of this paper is to review the financial statement of Doctors Hospital in the two years 2013 and 2014 and analyze these financial statements and its financial well-being. In addition, the paper will outline the role played by advanced practice nurses in the financial welfare of the organization.
Implications of Economics for Advance Practice Nurses. The ole of the Advance Practice Nurses in the Financial Wellbeing of Healthcare Organizations
In general, very minimal studies have been undertaken in the United States regarding cost effectiveness and economic impact of primary care delivered by advanced practice nurses. esults from different research studies indicate that, on the…… [Read More]
This ratio eliminates the stock figure from that of current assets and like the current ratio; it is used to measure the liquidity of a firm. The quick ratio may in some instances be preferred over the current ratio as it is inherently difficult to turn some assets into cash. In regard to the two companies, the quick ratio brings out Plume Inc. As being more risky as it is more likely to default on its short-term obligations. According to Tracy (2009), the quick ratio of a firm should ideally be grater than 1.
Part B: Health and isk Analysis in Brief
Looking at the debt to asset ratio, Arrow Company comes across as being more risky than Plume Inc. This is basically because its higher debt to assets ratio exposes it to a larger amount of debt which both investors and creditors may be wary of. Further, the higher…… [Read More]
Financial atios From Income Statements:
Accounting in hospitality management is carried out to identify and document financial issues and produce information regarding an organization's assets, liabilities, and investments. Through this process, the management of a hospitality establishment understands and interprets financial ratios, which are crucial for basic control of operations in the establishments. Some of the most important financial ratios in hospitality accounting include average daily rate, occupancy percentage, room sales to total sales, cost of food sold percentage, profit margins for rooms and F&B, housekeeping cost per occupied room, and cost of beverage sold percentage. These financial ratios can be determined or worked out from a company's income statements or operational data (Casado, 2006, p.103). For the 310-room hotel in Costa Mesa, California, the Occupancy percentage is 7,755: 310 = 25.02%
Cost of labor percentage for rooms is 103,202: 437,433 = 23% for F&B is 113,349: 302,188 = 37.5%…… [Read More]
The industry average current ratio is 2.5 (MSN Moneycentral, 2009), so the Gap has less capacity to meet its current obligations than many of its peers. However, in the retail industry most firms have a large portion of their current assets tied up in inventory, which distorts the current ratio figures higher. The Gap's figure of 1.855 is strong and indicates that the company will have little difficulty in meeting its upcoming obligations.
Overall, the liquidity measures provide an indication of the company's short-term health. Low amounts of working capital or a poor current ratio can indicate that the firm is in short-term distress. The figures for the Gap in 2008 do not indicate a firm in financial distress. Rather, they indicate that the company will have little difficulty in meeting its upcoming financial obligations. The company has strong working capital figure and a high current ratio. The latter is…… [Read More]
Therefore, I do believe that qualitative research is necessary. The financial statements can reveal much, but there are definitely instances in which the financial statements require contextual understanding for proper interpretation. Without this understanding, the firm's numbers may only reveal raw data. Raw data can be interpreted any number of different ways, so it is essential that qualitative analysis be conducted in order to place the numbers within a framework that will make understanding easier. or example, Landry's is taking on debt, but we know from the company's statements that this is to finance expansion and that hopefully when those properties are open, the returns will begin to improve.
How the firm makes money is an important consideration. This can help to not only place past performance into perspective but also to provide greater understanding of the firm's future prospects as well. Competitive advantages can be derived sometimes from the…… [Read More]
Understanding how a company operates within any industry is dependent upon comprehension of many financial properties. Assessing the financial stability of a company is essential in determining the company's strengths and weaknesses as well as ultimately assessing its profitability. Financial ratios should be considered a useful tool when examining the profitability and efficiency of any company. Some companies are certainly more successful and profitable than others, and pharmaceutical companies in particular seem to have a distinct advantage when measuring financial ratios.
When assessing any organization, for terms of this paper are as follows: Johnson & Johnson, Pfizer and Merck it is important to consider the profitability and efficiency of the company. This is among the first information investors will explore before "investing" in a company. atio analysis is a critical analysis of the financial structure of an organization. There are four categories of ratios that need to be…… [Read More]
As they are showing the total impact that the activities of business operations are having on its profitability.
When you look at the two different forms of analysis side by side, it is clear that they are playing an interconnected role. Where, business analysis and planning will tell you the various external challenges facing an organization. While financial analysis and planning, will tell you the effect of these issues are having on the balance sheet. This helps Hyrbitech to understand the overall scope of the problems they are facing and how they could adapt to them. As a result, the combination of the two different forms of analysis would identify specific factors that are facing the business and how it is impacting their overall bottom line. This would help Hybritech to seek out alliances and partnerships that could improve collaboration, as well as provide the company with the additional funding…… [Read More]
Re: Financial Analysis
I have completed my financial analysis of Company G. It is my general impression than Company G. is in good financial health. Thirteen financial ratios were calculated and this analysis shows that the company is generally a mid-range performer. With respect to the liquidity of Company G, that is questionable. The current ratio is within industry norms, but declined in the past year. The acid-test ratio is a weakness, and it has declined in the past year significantly. In the long run, we enjoy a favorable debt ratio. It has increased slightly but still outperforms industry norms. As we have a relatively low level of debt, our interest coverage remains very healthy, and has increased in the past year.
Inventory turnover remains a concern. It was below industry norms last year, and this year has declined further. Sitting on this much old inventory invites…… [Read More]
financial analysis and more specifically financial ratios has been noted by Finkler, Marc and Baker (2007, p.253) to be important to managers since it can help them in making informed decisions. In this paper, we present the concept of ratio analysis as applied to healthcare facilities.
The concept and purpose of ratio analysis
Financial statement analysis is noted by Flex Monitoring Team (2005) to be very important to managers, boards, payers as well as lenders for them to effectively make the right judgments on the financial health of their organizations. atio analysis is one of the most accepted methods of assessing the financial health of an organization. The data that is used for ratio analysis is derived from income statements and balance sheets. It is a fact that most health care systems, hospitals as well as various other healthcare organizations routinely employ ratio analysis in evaluating their financial condition and…… [Read More]
ratio analysis of Google and Microsoft. The initial component of the paper is a rundown of some key ratios and their definitions. Then, the ratios of the companies are calculated and discussed.
atio analysis is a tool by which companies in the same industry can be compared. The use of ratio analysis helps to offset the differences in size between companies -- for example one company may have a larger profit number, but a smaller profit margin, than a competitor. The ratio -- profit margin -- may be a better indicator o which company is actually more profitable. In this analysis, Microsoft and Google will be compared. Microsoft has a variety of multi-billion dollar businesses, including servers, Office and Windows, while Google makes most of its money on advertising sales. Yet, both companies are wildly profitable, and both have similar situations with regards to excess cash flow. They are also…… [Read More]
atios are one way to help assess the relative financial strength of an organization. Just as there are numerous ways that organizations can be organized, there are numerous different ratios that can be used to evaluate an organization's working capital and cash. ichard Loth breaks these various ratios into six different broad categories: liquidity measurement ratios, profitability indicator ratios, debt ratios, operating performance ratios, cash flow indicator ratios, and investment valuation ratios (2013). Liquidity ratios are focused on the company's ability to pay off short-term debt and compare a company's liquid assets to its short-term liabilities. Profitability indicator ratios help reveal how well the company is using its assets to generate profit. Debt ratios basically compare a company's debt to its equity or assets, which can help determine the financial strength of the company, indicate its creditworthiness, and warn of impending financial problems. Operating performance ratios focus on specific areas…… [Read More]
In Liz Clairborne's case,
Debt Ratio = Total Debt/Total asset value = 78%.
In Kenneth Cole's case,
Debt Ratio = Total Debt/Total Asset = 77%
As we can see, the debt ratio value is similar in the two companies and shows a reasonable financing of the business with outside financial sources.
The Times Interest Earned value (TIE) shows how much income can decrease in the company without financial problems appearing, as an incapacity to pay the annual interest rates.
At Kenneth Cole, TIE = Earnings efore Interest and Taxes/Interest Expense = 32,890,000/40,000 = 822 times. The value itself may appear ludicrous, but the reason is quite simple. If we look at the statement of cash flows, the cash paid for interest in 2003 is only $40,000, similar to the previous years.
In Liz Clairborne's case, TIE = 392,072/30,509 = 12.85
The large difference between the two companies can be explained…… [Read More]
Accounting -- Financial Statement Analysis
Comparison of gaming industry leader Ladbrokes PLC to William Hill PLC and then comparison of both those companies to the rest of the gaming industry reveals the burgeoning market of online/digital gaming. Comparison of the companies' histories, markets and ratios, shows a still-impressive industry titan Ladbrokes PLC being increasingly outgained by another market giant, William Hill PLC, and varying degrees of success among industry also-rans. It appears that the degrees of success or failure are intimately tied to the provision of online/digital gaming experiences to consumers.
Histories and Markets:
In 1886 Messrs. Schwind and Pennington formed a partnership as commission agents primarily backing horses trained by Pennington at Ladbroke Hall in Worcestershire. In 1902 they were joined by Arthur Bendir, who named the venture "Ladbrokes" and shifted the focus from backing horses to betting against them, acting as bookmaker and punter (bet placer).…… [Read More]
Financial Management - Personal Investment Decision for a Public Company
ationale for Toyota
Stock price analysis
Toyota Motor Corporation, which is recognized as is one of the most exhilarating productions in the automobile business these days. The company is one of the most economical corporations all over the world and has appreciated a record setting achievement for a very long time. In the previous years, the worldwide automobile industry has been overwhelmed by soaring gas prices, and hard-hitting environmental protection laws. With that even being said, it has not been a walk in the park for Toyota, but to no gain the company has been one of the most effective establishments so far. Toyota Motor Corporation has also been one of the manufacturing leaders in creating new and innovative technologies that take advantage of the productions existing barriers. There are a lot of things…… [Read More]
Ford Motor Company is headquartered in Detroit and operates globally. The company competes primarily in cars and light trucks. The company was founded in 1903 and today is one of the Big Three of U.S. automakers. The industry has globalized rapidly over the past few decades, and Ford now operates plants around the world. The company rose to prominence not only as an early automobile maker but the developer of the assembly line, and a leader in industrial production techniques. These allowed Ford to sell more cars than its competitors early, allowing it to establish itself as a market leader. The company today sells two main lines -- Ford and Lincoln (Ford.com, 2015). The industry is also in a state of flux with respect to technological change. Electric cars, and greater fuel efficiency are driving one segment of the market, while other segments still rely on light trucks and larger…… [Read More]
.....K, which is for the year ended October 2, 2016. This was used because many ratios are compared on an annual basis -- a quarterly report would yield different numbers.
The first section is the liquidity ratios. These reveal the short-term health of Starbucks. The basic liquidity measure is the current ratio, which is the current assets over current liabilities. Starbucks, at 1.05, is at the industry average, and 1.05 is a generally healthy number. The quick ratio removes inventories. This is valuable in some industries where inventories may end up unsold or sold at a discount. For Starbucks, whose inventories are largely coffee, cups and other things that will be sold, this measure is less useful. Starbucks has a quick ratio of 0.74, which is slightly lower than the industry average of 0.8, but close. The numbers are both below industry average and both worse than last year, but…… [Read More]
Starbucks Ratio Analysis
The relevance of ratio analysis cannot be overstated in seeking to assess the financial viability of an enterprise. As Porter and Norton (2012) point out, ratio analysis is one of the most important “techniques used by investors, creditors, and analysts in making informed decisions” (p. 698). Starbucks Corporation remains one of America’s foremost coffee marketers and retailers. In addition to sourcing, roasting, as well as selling coffee, the company also offers for sale a variety of other beverages and snacks – effectively making it one of the world’s largest fast-food entities. In seeking to assess as well as evaluate the company’s financial situation as well as performance, it would be prudent to conduct a financial statement ratio analysis using its full year fiscal results for the years 2017 and 2016 (Starbucks, 2018). Towards this end, three kinds of ratios will be taken into consideration, i.e. liquidity ratios,…… [Read More]
Discuss at least 1-2 ratios that you believe are important to ascertain the financial position of the company. Do you believe this company has the means to pay its debt?
Financial ratio analysis makes it possible to examine the financial health of a company. The financial statements of a company provide limited understanding and knowledge into its performance. So as to attain a much stronger and richer insight of what takes place, there has to be a relevant basis of evaluation and appraisal. Various financial ratios are key to ascertaining the financial position of XYZ Company. One of these ratios are profitability ratios, which indicate the ability of a firm to convert its sales into profits. The return on assets of the company is 12.0%, return in equity 21.82% and gross margin 32.21%. This indicates that the company is profitable and therefore in a financially stable position. For instance, for…… [Read More]
liquidity, the key ratios are the current ratio and the acid-test ratio. These are measures of the firm's ability to meet its coming obligations, based on current asset (current ratio) and current assets less inventories. The current ratio stands at 1.79, down from 1.86 last year. These figures are both below the industry average, and are trending downwards, indicating that performance is sub-optimal. The acid-test ratio is 0.43, compared with 0.64 last year, again a downward trend. The 0.43 figure puts the company in the lowest quartile of the industry, so the acid-test ratio is a weakness and a point of significant concern. While it is a big hyperbolic to consider a current ratio of 1.79 as a weakness, we should be concerned about the downward trend, especially when couple with such a sharp dropoff in the acid-test ratio. Overall, there is reason to be concerned about the liquidity of…… [Read More]
Arrow Company and Plume Inc. atio Analysis
Arrow Company and Plume Inc. Financial atio Computations
ate of eturn on Equity (OE)
eturn on Assets
The Collection Period
Fixed Asset Turnover
Debt to Assets atio
Debt to Equity atio
($2,105,700 - $435,000)/$845,500
($1,940,500 - $595,000)/$1,375,000
From the ratios computed in Table 1 above, it may be possible to tell which company is in better financial health than the other. To begin with, we can use a number of ratios computed in the table above to measure the success of the two entities at profit generation. Looking at the companies' rate of return on equity, it is clear that shareholders of Plume Inc. earn much more than…… [Read More]
Starbucks Ratio Analysis
Ratio analysis is a tool that is beneficial in undertaking quantitative analysis on figures found on financial statements. Ratios provide a common approach for comparing financial strength and performance of two or more companies. Imperatively, ratios can divulge a company’s financial strength or weakness in addition to divulge trends regarding business conditions and profitability (Noreen, Brewer, and Garrison, 2017). The main purpose of this assignment is to perform ratio analysis of Starbucks to analyze the company’s strengths and weaknesses.
One of the key aspects that determine the strong suit of a corporation is its profitability levels. Profitability ratios measure the ability of an organization to earn an adequate return. They measure the capacity of a firm to generate profit. It is imperative to note that high profitability ratios are a good indicator and demonstrate that the firm is operating as it should (Lan, 2012). Despite the…… [Read More]
46. So far the firm looks to be a good potential candidate for a loan.
The current and quick ratio looks at the short-term ability of a firm to meet its obligations. A lender will also want to look at the longer term position and the ability to repay the entire debt plus interest and fees (Libby et al., 2010). The solvency ratio assesses the level of cash generated in a year as a percentage of the debt. The cash generated is calculated by taking the net profit after tax and adding back the depreciation. The total liabilities are calculated by adding together the current and the long-term (non current) liabilities.
Table 3; Solvency ratio for Tootise oll Industries Inc.
Net profit after tax (a)
Adjusted net profit (a + b) (c )
Current liabilities (d)
57,972…… [Read More]
The objective of this study is to carry out the ratio analysis of the company between 2009 and 2011.
The current ratio assesses a company ability settle its short-term obligations. A current ratio below 1 reveals that the company is not in good financial health. Overview of the current ratio of the company reveals that it is in good financial health and will be able to settle its short-term obligation because its current ratio between 2007 and 2011 is more than 2 despite that the company current ratio was decreasing between 2007 and 2011.
The quick ratio is the ability of a company to meet its short-term obligation. However, quick ratio excludes the inventories. Analysis of the company quick ratio reveals that the company's quick ratio is decreasing between 2007 and 2011 from 1.64 to 0.97.
Times Interest Earned
This is a tool to measure a…… [Read More]
Financial analysis is a tool that allows third parties to analyze corporate financial statements. One of the main reasons that the Securities and Exchange Commission requires that statements are compiled and presented in a consistent manner is to ensure that third parties will be able to use the statements to compare different companies. These comparisons can, among other things, help with investment decisions. This paper will compare PepsiCo and Coca-Cola Company, the two leading soft drink marketers in the world. PepsiCo is actually the larger of the two companies, because it is more diversified, with its snack food properties. These properties also alter the company's finances, creating certain points of difference between the two companies. This report will cover a number of different forms of financial analysis, arriving at a conclusion about which company has the stronger financial position.
The first set of ratios to be studied…… [Read More]
e. they ignore other key indicators and measures of financial performance. Other equally important measures and/or indicators of performance in this case include but they are not limited to employee morale, client service and satisfaction, quality of goods or products, etc.
Another key limitation of ratios is that they are only useful when it comes to the comparison of firms operating in the same industry. Utilizing ratios in the analysis of financial statements of companies in different industries could lead to a distortion of the information desired. This is more so the case given that entities in different industries are more often than not exposed to different regulations, market conditions, etc. In practice, finding two companies that are identical in every way is impossible.
atios could also be affected by changes in price levels. According to Lasher (2010), financial statements are often distorted by inflation. In the author's words, "during…… [Read More]
Net income available to common stockholders
Addition to retained earnings
Calculated Data: Operating Performance and Cash Flows
Net operating working capital (NOC)
Total operating capital
Net Operating Profit After Taxes (NOPAT)
Net Cash Flow (Net income + Depreciation)
Operating Cash Flow (OCF)
Free Cash Flow (FCF)
Calculated Data: Per-share Information
Earnings per share (EPS)
Dividends per share (DPS)
Book value per share (BVPS)
Cash flow per share (CFPS)
Free cash flow per share (FCFPS)
LIQUIDITY RATIOS (Section 3.2)
ASSET Management RATIOS (Section 3.3)
Asset Management ratios
Days Sales Outstanding…… [Read More]
Hyundai company analysis
Finance is a critical function in any business. It acts as an indicator for the health of a company, as well as determining its growth. When a company realizes new investment opportunities and other future aspirations, finance enables such ventures. Thus, finance reflects the performance of an organization (Gruen & Howarth, 2005). Measurement of performance takes place over a period of time. Organizations practically present their financial performance on a quarterly and yearly basis while others carry out a monthly exercise of tracking their performance. The government requires that all companies present an annual assessment of their performance. The information is featured in the form of financial transactions of sales, investments, savings and others. The information is part of a document called the Annul eport. Investors are informed by the annual report of companies before deciding on whether to invest in the company (Mclean, 2003).…… [Read More]
Financial Analysis of Lehman rother
The history has been full of financial collapses and financial scandals and one of the biggest financial collapses that a company has ever seen was that of Lehman brother. The collapse of a firm as huge as Lehman rother and a firm which has such great experience of over a hundred years lead the world into a shock. It created doubts in the minds of people regarding the condition of other financial institutions. The history of Lehman rother is rich which is further discussed.
The history of Lehman rother dates back to 1844, when a boy named Henry who was a 23-year-old son of a cattle merchant who immigrated to the United States from Germany and he settled in Alabama State of the United States where he opened dry goods store. In 1847, when Henry Lehman's elder brother arrived to Alabama, the firm…… [Read More]
he only observation that could be made here is that one would expect a larger proportion of the total expenses to be allocated to research and development, given the fact that this is such an important part of Microsoft's activity and essential in order to obtain a competitive advantage on the market.
Asset and Capital Structure
Cash and cash equivalents
otal fixed assets
he asset structure at Microsoft reflects some of the particularities in the industry, notably the fact that the inventory levels tend to be quite low, as compared to the other assets. his means that the I industry is not one supporting production on stock. At the same time, the value of the total fixed assets is significantly high, which can be partly explained by the size of the company and the investments in land, buildings and equipment.
Part III…… [Read More]
The projected growth rates are of 7% for 2009, 7% for 2010, 8% for 2011 and 9% for 2012 (Hoovers). Wyeth is expected to increase at higher rates due to its being taken over by Pfizer.
3. Stock Price Analysis
The Wyeth stock is being currently (September 16th, 2009) traded at $47.70, revealing a 0.23 (0.48%) decrease relative to the previous trading session, which closed at $47.93. The day's high value so far is of $47.94, with a low of $47.64. The highest value for the past twelve months is of $48.30, with the lowest of $28.06 (Wyeth Pharmaceuticals Company Website). Compared then to the evolution of the past year, it is obvious that the price of the Wyeth stock option increased. The highest price in its trading history was of $69.75 and it was achieved on the 12th of April 1999. The lowest price was registered on the 17th…… [Read More]
Depreciation + Exp
Future Income Tax
Current LT Debt
Other LT Liabilities
L + E
Reitmans was able to improve its profitability in 2005, compared with 2004. The company's gross profit improved to 13.55% from 9.99%; its operating profit improved to 9.7% from 5.98%; and its net profit improved to 7.33% from 4.7%. This shows that the improvement in the company's profitability is largely attributable to the improvement in the top line, with the cost of goods sold being a lower percentage of revenues in 2005 than 2004. hether this is a function of driving down costs with suppliers or increasing prices to consumers cannot be ascertained from…… [Read More]
Financial analysts play a number of roles within an organization. They made assessments of the value of investments the firm has or may have in the future. They can specialize in determining the value of projects. In addition, financial analysts are engaged in risk assessment, and take steps to determining the best ways for the firm to mitigate the risks that have been identified. Overall, financial analysts use a multitude of different knowledge sets including taxes, finance, economics and risk management to assist the company in making the best financial decisions for the firm (BLS, 2010).
a )The net profit would be the gross profit less operating expenses, interest expenses and tax expenses. Thus, the net profit is: $1,000,000 - $345,000 - $125,000 = $530,000. From this the taxes are removed: $530,000 * (1-.3) = $371,000. The preferred stock dividends of $57,000 must then be removed in order to determine…… [Read More]
Overall, at&T is the more profitable of the two companies. That Verizon has the stronger gross margins and at&T the stronger net margins indicates that at&T does a better job of controlling its cost structure than does Verizon.
The telecommunications industry is highly competitive in both the landline and wireless segments. By 2006, wireless spending had match wireline spending. hile this presents significant opportunities for telecommunications, much of that spending comes in the form of cannibalizing, as wireline revenues have been decreasing steady over the past decade, matching the steady increases in wireless spending.
There are four major wireless operators in the U.S. And over 170 regional players (Megna, 2009). Competition is based on coverage area (capital investment), price and customer service. Both firms can be considered industry leaders. As of 2007, at&T had a subscriber base of 65.7 million and wireless revenues of $10.9 billion. Verizon had…… [Read More]
The horizontal analysis showed that FedEx's profits in 2009 were just 5% of their profits in 2007. Given that EBIT contributes to the T3 component of the Z-score, which is the most significant component by weighting, this would explain why the Z-score dropped so much. The other major contributor to the Z-score is the drop in the company's market cap. The market cap is deemed important in part because the market's view of company reflects the most known information at the time. The market has a strong ability to predict financial distress. A depressed stock price indicates that investors need a greater percentage return on the expected future cash flows from the company in order to invest -- an indicator that the market believes the firm's risk level has increased. The market cap contributes to the T4 component, which is the smallest component of the Z-score. However, the decline in…… [Read More]
5 times the actual value of equity.
The return on investment is calculated by dividing the total net profits by the total assets value and shows the "overall effectiveness to generate profits from total investment in assets." At the Colorado Group, the return on investment amounted to 20.4% in 2006 and 21.5% in 2005. The small decrease from 2005 to 2006 can be explained by the fact that that the net profits decreased significantly during this period of time and that the decrease of the total assets value was by no means similar in value.
The gross profit margin is calculated by dividing the net sales minus the cost of goods sold by the net sales value and shows the "profitability of a company's sales after the cost of sales has been deducted." In this case, in 2006 this ratio was equal to 54.4%, as compared to 55.9% in 2005.…… [Read More]
Another point of difficulty is that different firms may use different calendars when reporting. For example, the fiscal year at FedEx ends at the end of May, while at UPS the fiscal years ends at the end of December. This makes for a difficult comparison. For example, fuel prices escalated rapidly in early 2008. Comparing a FedEx FY09 and UPS FY08 would be very difficult, given that one of those statements would reflect the fuel price increase and the other would not.
There are also limitations to accounting analysis as a whole. At best, these forms of analysis are only as good as the financial statements from which they are produced. A large number of variables contribute to those statements, including accounting policy, accounting accuracy (or lack thereof), outdated information and changes in the accounting standards (NetTom, n.d.)
Changes in accounting policy or accounting standards can distort data year-over-year, which…… [Read More]
Financial Analysis of Bestwish Limited
Bestwish Limited produces extensive range of quality products such as gift dressing, greetings cards, and plush merchandise of more than 50,000 stocks. The production of different categories of products involve between 2 and 15 processes. The company produces standardized products and custom designed products ordered from customers on contract basis. However, Bestwish Limited is facing challenges to control the costs because of varying production process, reliance on indirect costs and large number of stock keeping units.
Bestwish Limited has just closed the 2010 fiscal year account and the company is finalizing the 2011 budget. Bestwish intends to analyze the 2010 financial statement to present the accurate picture of the company financial performances.
Objective of this report is to analyze 2010 financial statements to assess the viability of Bestwish Limited.
Audit Committee of the Board
Subject: Financial statement Analysis
Date:…… [Read More]
Financial esearch eport
This is a review of Caterpillar, Inc.. The report is broken down into three sections -- company overview, ratio analysis (which includes a trend analysis), stock price analysis -- that are designed to give a thorough overview of the complete company.
Caterpillar is one of the best known name brands, around the world for its manufacture of heavy machinery made, primarily, for the construction industry. The company began operations in 1925 under the name Caterpillar after a merger was formed between Holt Manufacturing and C.L. Best Tractor (USSEC, 2011). The company has set the standard in its industry becoming the largest manufacturer of hauling machines in the world.
Caterpillar operates primarily as a manufacturer of heavy equipment, but, with the realization that they needed to be able to finance purchases of their products and help maintain them, the company has also diverged into financial services…… [Read More]
The price is at its level of five years ago, when the external environment was much more favorable for Starbucks. The price of arabica has increased significantly and while Starbucks is a major buyer, it is not the largest buyer and does not have significant pricing power. The competitive pressure that has been applied by McDonald's, Dunkin Donuts and a host of imitators has not eased. Given this, margins can be expected to remain at current levels. While the company can still achieve more improvements with respect to its internal metrics, those are unlikely to drive the stock much beyond its current level. The key driver for Starbucks' stock in the coming years is going to be more dependent on foreign market growth than any other single factor. Foreign market indicators are not a cause for intense optimism. Dubai's default calls into question the long-term growth potential of the Middle…… [Read More]
Had the organization employed the techniques of activity-based costing, they would have realized the need to change their approach and had started manufacturing small size and fuel efficient engines, as most of the customers were requiring these items. "If Ford [...] had used activity-based costing, they would have realized early on the utter futility of their competitive blitzes of the past few years, which offered new-car buyers spectacular discounts and hefty rewards" (Drucker, 2003).
Unlike absorption costing, marginal costing uses the traditional division into direct, indirect, fixed and variable costs. The accounting method sees that the final marginal cost of a product will be calculated by summing up the direct costs of labor, the direct costs of materials, the direct expenses and the variable overheads (Brown). The applications of marginal costing revealed that Ford was able to support a price advantage relative to General Motors and Chrysler due to its…… [Read More]
Financial Management: atios, isk and Diversification
Financial atios elevant to Small Businesses and Large Corporations
In an attempt to determine the performance of his or her business, a small business owner can utilize ratios such as the current ratio and the profit margin ratio. The profit margin in the words of Needles and Powers (2010) "shows the percentage of each sales dollar that results in net income." For a small business owner, this ratio would be an appropriate measure of the profitability of his or her business. The current ratio as Stickney et al. (2009) point out helps in the measurement of a firm's ability to settle its short-term debts/obligations. A small business owner interested in determining the ability of the business to settle its everyday bills and other obligations would find this ratio useful. On the other hand, a manager of a large corporation would be interested in ratios…… [Read More]
Verizon is a national telecommunications company, headquartered in New York City. The company was formed from the breakup of Bell and subsequent mergers and acquisitions. The company has divisions for media, network and technology and customer/product operations. The latter is by far the largest component of the company, encompassing Verizon Wireless, and a number of companies aimed at the enterprise market. Verizon competes against AT&T and Sprint, both of which are large companies in their own right, with similar businesses, in particular in wireless and telecommunications. These divisions reflect an organizational structure that is focused on product. The wireless business is nationwide, but the landline-oriented businesses are focused mainly in the northeast, which is the traditional geography for Verizon's predecessor business Bell Atlantic.
Recent Financial Performance
Verizon's business has fluctuated over the past three years. In FY 2016, it recorded $125 billion in revenue, down from $131 billion…… [Read More]
Conduct a benchmarking analysis
As explained by Prasnikar, Debeljak and Ahcan (2005) benchmarking depends on comparing between two activities of an organization and another. In our case, we shall compare McDonald's activities and those of its competitors, Burger King and Wendy's.
• Best practices
McDonald's as a main player in the fast food industry is concerned with best practices with the industry. To this end, the corporation has adopted some best practices that include sustainability, nutrition and well-being, employee experience ad environmental responsibility. Accordingly, McDonald's protects the environment by going green and using methods that protect and conserve the environment. McDonald's also encourages its suppliers to uphold effective environmental. The company treats it employees well and offers them good working conditions as a way retaining them. Employees are offered training and promoted accordingly. McDonald's also adheres to ethical conduct its operations and food items are produced ethical. Similarly, the company…… [Read More]
Apple: atio and SWOT Analysis
Financial Trend Comparison
atio Category: Liquidity atios
In basic terms, liquidity ratios demonstrate a company's ability to settle its obligations (short-term) if and when they fall due. To begin with, from the computations, it is clear that Apple's current ratio has consistently been less than the industry average. Hence for short-term creditors, this could be an issue of concern as the trend increases their risk. Further, a look at the company's cash ratio shows that the firm could have difficulties settling its current obligations if payment for the same was demanded immediately. Generally, most (if not all) the company's relevant liquidity ratios fall below the industry average. Hence going forward, the company could find it hard accessing short-term-credit from creditors.
atio Category: Asset atios
Asset turnover ratios are basically used as pointers of a company's level of efficiency when it comes to asset utilization. Apple's…… [Read More]
Ford's value in 2007, was 0.01, compared to GM's value of 0.64. Comparatively, GM is using its assets in a much more efficient manner than Ford is.
oth General Motors and Ford have shown specific problems in their operational activity, as this is reflected in the financial ratios that have been analyzed. The most important problem that Ford seems to have was reflected by both the asset management and profitability ratios. Indeed, from our investigation, we were able to determine that not only Ford is not using the assets it has efficiently in order to generate higher revenues and sales for the company, but the values in 2007 were almost error-like small (0.01 in most cases).
At the same time, General Motor's asset management and profitability ratio values were somewhat higher and, generally, showed an ascending trend, but I don't think we can go as far as saying…… [Read More]
Oracle sells software for database-management and network products, application-development productivity tools, and end-user applications. Its principal product, the Oracle relational database-management system, runs on supercomputers, mainframes, minicomputers, microcomputers, and personal computers. The firm also offers consulting and systems-integration services. Foreign sales make up about 50% of revenue.
Oracle sees the wisdom in managing business data. Oracle also offers business applications for data warehousing, customer relationship management, and supply chain management. The company made an unsolicited bid to acquire PeopleSoft for about $5.1 billion in June 2003. y early 2004 the offer had increased to $9.4 billion, but was later reduced to $7.7 billion to reflect market conditions. The Department of Justice filed antitrust lawsuits in seven states to block the deal, and started hearings on June 7. Peoplesoft's lawsuit against Oracle is scheduled to go to court November 1 in Alameda, California.
Long-Term Debt Ratio (Long-Term Liabilities/Total Assets)…… [Read More]
Financial Analysis of Nike
Nike Corporation (NKE: NYSE) is a global leader in the research and development, design and global marketing of a series of apparel, accessory, equipment and footwear products. The company is globally recognized for its excellence in marketing with the Nike brand being considered one of the top ten globally every year in consumer surveys where unaided awareness is the basis of analysis (Kwon, Kim, Mondello, 2008). Nike has one of the most extensive supply chains of any global apparel manufacturer, with a series of supplier quality audits and compliance standards including Corporate Social esponsibility (CS) initiatives and programs are enforced across the thousands of companies it sources from (Doorey, 2011). Today Nike operates in 170 different nations, dividing their overall operations into six divisions including China, Central and Eastern Europe, North America, Western Europe and Emerging Markets. Nike has over two dozen product lines it sells…… [Read More]
Day's Sales in Inventory
ROA an ROE are n/a because there were no returns, as the company recore a net loss for the year.
The results above illustrate that Borers has not ha a goo couple of years. The company is losing money, an this is reflecte in the loss per share, an the lack of returns on assets an equity. The gross margin seems aequate to eliver profit, but it has ecrease in the past year. The net margin, however, has been negative in both years, because the company has poste losses Borers has a lot of ebt, with a high ebt ratio, an low operating cash flow to ebt ratio. While its immeiately liquiity is not…… [Read More]
Pfizer can be included in the larger industrial sector of biotechnology and pharmaceuticals, although a great part of its revenues come from the pharmaceutical products for which it is renowned. The pharmaceutical companies have specialized in a vast category of drugs, from simple, aspirin- type drugs, to more complex ones, including drugs that inhibit or activate individual molecules in different selected environments. They also produce vitamins and livestock food supplements.
The pharmaceutical industry in the United States (and worldwide for that matter) is considered to be one of the most profitable and continuously booming. It is estimated that globally, over $300 billion worth of drugs are sold. A simple explanation for this high degree of profitability is, of course, the high demand of the sector: no matter what happens, drugs and medicine continue to be one of the necessities of people. Additionally, this demand seems to be on a constant…… [Read More]
ationale for choosing the company for which to invest
The company selected for this financial research report is Intel Corporation. The rationale for selecting this company is because Intel is considered to be one of the major pioneers and forerunners in the field of technology. Intel Corporation dominates about 80% of the market share that is made up of microprocessors.
It is imperative to note that the financial statement of a company alone offers limited understanding and insight into the performance of the company itself. So as to attain a much profound and richer comprehension of what is going on within a company, there has to be a relevant basis of comparison. Comparison can include making an analysis of financial ratios of the company as well as the industry benchmarks it offers the stakeholders, with tools to detect any strength and weaknesses of the company. This…… [Read More]
Suppose you are comparing two firms within an industry. One is large and the other is small. Will relative or absolute numbers be of more value in each case? What kinds of statistics can help evaluate relative size?
Gibson, Charles H. (2012-05-10). Financial Reporting and Analysis (Page 217). Cengage Textbook. Kindle Edition.
When comparing two firms that are unequal in size, the relative financial ratios are more appropriate for any type of comparison. The advantage of using ratios is that they represent a metric that can be easily compared with industry standards or other specific companies of different sizes. The financial statement represents a snap shot of a company's performance over a given time period and the financial information that these reports provide can allow the analysis of a wide range of different ratios. These ratios can provide insights to factors such as the company's ability to repay…… [Read More]