StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

The Companys Ratios by Group - Essay Example

Cite this document
Summary
In the paper “The Company’s Ratios by Group” the author analyzes the company’s ratios by a group. Both companies have increased their financing through debt in 2002 while the industry trend was the opposite. Both the total debt ratio and long-term debt ratio for Company B are under the industry average…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.8% of users find it useful
The Companys Ratios by Group
Read Text Preview

Extract of sample "The Companys Ratios by Group"

The business may also have a seasonal nature. Efficiency ratios: for the industry in general average collection period decreased by 2 days in 2002, and inventory turnover increased. The turnover growth rate for both A and B was positive but less than the industry average. Additionally, the average collection period went up. Collection discipline and overall asset management should be examined closely. Profitability ratios: Company B has an advantage vs. A in all three categories, though both companies and the industry overall show positive growth.

Using the Du-Pont system (see graphs on the next page), one can see that both companies have lower than average asset turnover but B compensate for it with a high operating profit margin and achieves high ROA. By dividing the book value of UPS ($16.884bln) by the number of shares (1.07bln as indicated at Yahoo Finance resource) we get book value per share of $15.78. Market value per share as of 3rd January 2007 is $74.97. For FDX, book and market value per share equal to $37.48 ($11.511bln / 307.12M ) and $109.77. UPS market value can be calculated as $74.

97 per share x 1.07bln shares = $80.218 bln and its market value added is $80.218bln - $16.884bln = $63.334bln. FDX market value: $109.77 per share x 307.12M shares = $33.712 bln and market value added equals to $33.712 bln - $11.511bln = $22.210bln. A difference between book value and market value of a company exists because investing in a company is not equivalent to buying its building or production lines; it is an investment in the way the company’s assets are utilized.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(The Companys Ratios by Group Essay Example | Topics and Well Written Essays - 500 words, n.d.)
The Companys Ratios by Group Essay Example | Topics and Well Written Essays - 500 words. https://studentshare.org/business/1538878-2-discussion-questions
(The Companys Ratios by Group Essay Example | Topics and Well Written Essays - 500 Words)
The Companys Ratios by Group Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/business/1538878-2-discussion-questions.
“The Companys Ratios by Group Essay Example | Topics and Well Written Essays - 500 Words”. https://studentshare.org/business/1538878-2-discussion-questions.
  • Cited: 0 times

CHECK THESE SAMPLES OF The Companys Ratios by Group

Finance and Accounting

Both these ratios address the bankruptcy issue.... According to the calculated ratios, Qatar Telecom's liquidity position seems to be strong as compared to Vodafone in both the years 2010 and 2011.... Qatar Telecom's personal liquidity ratios have deteriorated in 2011, compared to 2010, but then even the company has a stronger position as compared to Vodafone, which almost has balanced proportion between its current liabilities and its current assets....
5 Pages (1250 words) Essay

Accounting For Decision Making

This is a financial report that focuses its analysis on two companies; Fantastic holdings limited and super retail group which previously was called Super cheap auto group limited.... This report analyzes two big companies; fantastic holdings limited and super retail group limited.... On the other hand, super retail group is a leading company having eight groups.... Considering the two companies, fantastic holdings limited is seen to have better profitability when compared to super retail group....
9 Pages (2250 words) Essay

Financial Report Analysis

hellip; During that time the group has doubled its revenues, trebled its order book and increased its profits more than four times.... The group's performance in 2012 is testament to the strength of their strategies, the quality of their technologies and the ability and determination of their employees and members.... group TWO YEAR REVIEW FOR THE YEARS ENDED 31ST DECEMBER INCOME STATEMENT 2012 2011 Revenue 12,161 11,124 Profit before net research and development and share of results of joint ventures and associates 2,488 1,536 Research and development (net) (589) (463) Share of results of joint ventures and associates 173 116 Profit before financing 2072 1189 Net financing 633 (84) Profit/(loss) before taxation 2705 1105 TAXATION (410) (257) Profit/(loss) for the year 2295 848 Attributable to: Equity shareholders of the parent 2281 850 Non-controlling interests 14 (2) Profit/(loss) for the year 2295 848 Research and development (gross) (919) (908) Underlying profit before taxation 1429 1157 EARNINGS PER ORDINARY SHARE: underlying 59....
4 Pages (1000 words) Assignment

Earnings per Share in Business

Profitability ratios help users of financial statements to understand managements' effectiveness in generating profits from business operations and section reviews and compares profitability rations of Baxter International and Becton, Dickens and Company… ACG group project Business organizations operate with the primary aim of making profits for sustainability, to facilitate growth, and to pay investors for their financial input into the businesses.... ACG group project Business organizations operate with the primary aim of making profits for sustainability, to facilitate growth, and to pay investors for their financial input into the businesses....
3 Pages (750 words) Essay

The Carphone Warehouse Group

The paper 'The Carphone Warehouse group' focuses on the business world that has been transformed by new technologies that changed the life of the everyday person....  In the United Kingdom a major player in the communication services industry is The Carphone Warehouse group....
7 Pages (1750 words) Case Study

Financial Statement Analysis of Tesco as a Limited Company

the companys ratios will be compared to its competitors in industry using averages available to enhance analysis.... Using published annual reports for the past three years, this paper seeks to evaluate the financial statements of Tesco for the past four years as to its financial performance in its income statement, liquidity, operating cycle and management of working capital, and its… The analysis using appropriate ratios will be undertaken in the light of the general and economic and industry specific contexts....
9 Pages (2250 words) Essay

Wetherspoon Pubs to Ban Smoking

The financial information revealed including the financial ratios are significant towards gauging the success of Wetherspoons Company.... Profitability ratios Profitability ratios are important because they enable investors in a company to examine its profitability with respect to asset levels in the company and other kinds of investments....
9 Pages (2250 words) Case Study

Financial Forecasting for Compass Group Plc

The paper "Financial Forecasting for Compass group Plc" discusses that all elements of the projected consolidated income statement and balance sheet are prepared using CAGR and other related assumptions including that of exceptional items, financing cost and taxation in particular.... nbsp;… Generally, when the financial ratios of the year 2008 are compared with those of projected financial statements the analysis tends to present similar outcomes....
8 Pages (2000 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us