Essays on P/E Ratio

Rationale for the stock selection

Since the shares of preferred stocks have dividends that must be paid out before bonuses to the common shareholders, they are the class of ownership in a corporation. Thereby, possessing high claims on the company's assets, common stock, and earnings. It does not carry voting rights. Additionally, the preferred shares more rights as compared to the ordinary shares. Therefore, the rationale for selecting this stock rely on the ability of companies to retain the issue options of buying the common shares at an exercise price with a reasonable discount from the prices of the preferred securities. The accounting and ...

Why did you choose to analyze this company?

I chose the Coca-Cola Company because of the apparent simplicity of its business: to sell sugary drinks to the world. They can do it better than anyone else and provide a good return to investors.

What were the opinions of some of your referenced articles on this stock as an investment?

One of the articles indicated that Coca-Cola was taking a hit from the Euro: the relative strength of the European currency versus emerging markets’ currencies explained a decrease in 2.7% of total revenue, despite an increase in total volume of sales (Coca-Cola Weakened by Strong Euro, 2016). Other two articles pointed to a more serious long-run threat: the imposition of a sugar tax in ...

Chapter 1: Introduction 3

Chapter 2: Financial Performance and Position of TESCO 6 Chapter 3 Financial Management Policy 14 Chapter 4 Investment Strategy 18 Chapter 5 Valuation of TESCO 22 Chapter 6 Conclusion 26 Abstract The present report provides critical analysis of financial positioning of Tesco Plc. For this, the financial data has been gathered for past five years as well as its competitors to critically assess financial positioning of Tesco in the retail industry. The reports highlight the recent issues of Bretix which has significantly impacted economic conditions of the United Kingdom leading to declining the consumer confidence because of triggering inflation. ...

Imperial Oil, founded in 1880 is a giant petroleum producing company, with its headquarters located in Calgary, Canada. It is the second largest integrated petroleum company in Canada and has registered a phenomenal growth since its inception. Its operations consist of exploring and producing oil, manufacturing and distributing petroleum products for energy sources, producing chemicals for industrial and domestic use through innovative and sustainable technology. ( Annual report, 2016) reports a cash generation of $22 bn from operations only during 2010-2015. Its performance can be evaluated from the growing dividends paid to its shareholders in last 21 consecutive years. Imperial ...

Out of the five stocks, in my opinion, Disney presents the highest risk as it has the worst Beta and the worst Short Ratio. This would mean that the price volatility is the highest and the number of short trades is also high, further pushing up the risk. Next is Ford, with second highest Beta, second highest Short Ratio and lowest RoA. This would mean that the company is not very efficient in generating net income from its assets, thus increasing the risk. Next is Microsoft with the third highest Beta, highest P/E ratio and lowest ROE. This means ...

Executive summary

The stock price of Southern Cross Media Group Limited did not show any reaction to the announcement of the 2015 financial results. The stock price increased days before the announcement and the day after the event but declined two days after the announcement. Financial analysis of firm indicates that it has a strong liquidity, and this has improved over the last five years. Its debt to equity ratio has increased due to the capital reduction in accordance with the relevant statute. The year 2015 saw a decline in the profitability of the company although this did not affect the ...

Financial Analysis: Microsoft.

1. Revenue goes up, why? Revenue increases are explained in Microsoft financial statements for FY 2014 and 2015. Revenue growth of 12% or $9 Billion in 2014 compared to 2013 was due to “higher revenue from server products, Xbox Platform, Commercial Cloud, and Surface. Revenue also increased due to the acquisition of NDS. Commercial Cloud revenue doubled, reflecting continued subscriber growth from our cloud-based offerings” (Microsoft, 2014). Revenue growth of 8% or $6.7 Billion in 2015 compared to 2013 was mainly due to “a full year of Phone Hardware sales and growth in revenue from our Commercial Cloud, Surface, ...

Value of Financial Instrument

Value of Financial Instrument It can be noticed from the above-provided table that Microsoft (AAA) has less yield to maturity as compared to others. The negative relationship is observed between rating and yield to maturity. The B-rated company that is Goldman Sachs has higher yield to maturity as compared to others. The highest yield-to-maturity rate is of Rolta that is 6.9 as the company is rated the lowest in the market regarding bonds . The coupon rates and yield-to-maturity are determined by comparing it with other bonds available in the market. The bonds are traded at par value that is ...

EXECUTIVE SUMMARY

Ratio analysis is one of the most common methods of analyzing a company. They are simple to calculate needing only public information from financial statements. The purpose is to use past relationships of financial accounts to predict future results. Perhaps the most important ratios involve operating income. ROE, gross profit margin, operating margin, and net profit margin give information about how the company achieved results in the past. Of these, operating margin is the most important. This ratio demonstrates a company’s ability to generate income from normal business operations. Look for at least a 10% margin. Extraordinary items ...

Evaluation of Corporate Performance: Apple Inc.

Apple, Inc. is a U.S. based company that has its registered office in Cupertino, California. The company has a long history of innovative progression and it will not be wrong to state that the company has changed the ways of telecommunication. It has opened up new arenas of technology development and competition between electronic companies has become fierce in the last 15 years or so due to the company’s ability to develop new and unique products. The company sells computers, laptops, hard drives, tablets, music accessories, phones, etc. The company has its own operating system that runs on ...

Introduction

The objective of this report is advise and recommend whether Restaurant Brand New Zealand Limited or Xero Limited is the better company to work for in relation to long-term employment. As companies that have the capacity to provide their employees with stable, long-term employment usually show strong growth and are thriving economically in their chosen market. This report is also based on the financial information provided by the NZX Company Research database from the past three years and articles sourced from NEWZTEXT in order to present a comprehensive view of how each company is performing in the current environment.

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INVESTMENT ANALYSIS: ACTIVELY MANAGED PORTFOLIO

Unlike the passively managed portfolio, the actively managed portfolio relies on the theoretical basis that the market is not perfectly efficient. This inefficiency allows an investor to outperform the market by utilizing a certain skill or strategy. An active portfolio management usually requires short term, frequent trading, which could potentially result in large trading costs for the investor. Taking this into account, the task was to make a strategy as accurate as possible to cover the large trading cost and make profit. In building an actively managed portfolio, the selected strategy was stock picking. The reason for selection of ...

Introduction

This paper seeks to conduct an analysis for the financial performance of the Toyota Motor Corporation and General Motors Company for their financial years ended in 2015. In order to arrive at objective results, the analysis will compare different financial and performance ratios for both businesses. It is a purely objective analysis that will be based on the figures presented on the annual audited final accounts of the companies.

A.Ratios

Liquidity ratios These are financial metrics used to assess and determine an entity’s ability to meet its short term debt obligations. They include:

Current ratio

Quick ratio/Acid test ratio Profitability ratios. ...

Torrington is a perfect strategic fit for Timken because it would make the combined company to be the third largest ball bearing producing company in the world. In addition, the company would experience purchasing synergies that would yield the combined company annual savings of $80 million and the rationalization of the workforce would yield savings of $80 million. Using Timken cost of debt of 7.23%, to discount the free cash flows of Torrington between 1999 and 2007 would result in an estimated value of Torrington to be $598.59 million. The free cash flows add the depreciation expense because it ...