Return on equity, Financial Management

Your quantitative analysis will describe the financial strength of you company using the metrics we discussed in class. You may use other measures at your discretion, but the following are required to be addressed in your presentation and the accompanying literature and must not only be quantified but described.

  • Liquidity- use whichever ratio you think is best
  • Return on equity
  • Return on assets
  • Dividend payout ratio (if it pays a dividend, is it sustainable based on net income?)
  • Price/earnings ratio (especially compared to industry peers)
  • Stock price performance

Trends

Does your company exhibit any trends over the past 3-5 years? Has the profit margin steadily grown to show greater levels of management efficiency? Has your P/E ratio dropped, signifying a potentially optimum time to invest in your company? Have your debt levels and interest rate expense been reduced? If so, why is that a good sign to potential investors?

Industry Comparisons

Does your company compare favorably or unfavorably with industry peers? Is your P/E ratio higher or lower than your peers, and what does that mean to investors? If your P/E is higher, does the growth potential of your company warrant the higher stock price? If your P/E is lower, does management have a plan to re-charge growth going forward or will your stock linger at a lower value?

Posted Date: 3/6/2013 1:37:35 AM | Location : United States







Related Discussions:- Return on equity, Assignment Help, Ask Question on Return on equity, Get Answer, Expert's Help, Return on equity Discussions

Write discussion on Return on equity
Your posts are moderated
Related Questions
Evaluation of money-market hedge Expected receipt after 3 months = $300000 Dollar interest rate over three months = 5.4/ 4 = 1.35% Dollars to borrow now to have $300000 l

Q. Merits of accept-reject criteria? Merits of ARR:- (i) Simple: - ARR method is very simple to understand and use. (ii) Complete life time of the project is considered:

Suppose a company is quoting swap rates as follows:  7.75 - 8.10 percent yearly against 6-month dollar LIBOR for dollars and 11.25 - 11.65 percent yearly against six-month dollar L

In January 2010 your firm bought from an Italian firm goods payable in Euros worth EU2,000,000.  Suppose that at that time the exchange rate of the Euros was 1EU=$1.25.  Because th

Why is the replacement value of assets method not usually used to value complete businesses? The replacement value of assets process is not often applied to complete business v

Operating profit margin Operating profit margin    =   (PBIT / Turnover) x 100% This is the ratio of operating profit to turnover or sales. A high operating profit margin is

As the early 1980s, foreign portfolio investors have purchased an important portion of U.S. treasury bond issues. Discuss the short-term and long-term influences of foreigners’ por

Balance Sheet: The balance sheet measures the financial position of the business at a particular point in time.  It is also called Statement of Financial Position. The balan

Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr

Suppose the government wants to limit imports of a certain good.  Is it preferable to use an import quota or a tariff?  Why? Modification in domestic consumer and producer surp