Introduction
The purpose of this company analysis is to discover why one company would be better to invest in over the other. The analysis is based on two competing companies within the same industry. While these two companies compare in products and services, they do not relate in overall size. To assist in making an educating decision, many areas of each company were looked at. A comprehensive financial ratio analysis was completed for each company, as well as an evaluation of their strengths, weaknesses and future opportunities. While it is important to consider how a company manages its finances, it is equally important to consider its future prospects as well. Below you will find a brief description of each company, and an evaluation of their performance. All of this information will be concluded with which company may be the better investment prospect.
Raytheon
Raytheon is a company that specializes in defense, homeland security and other government markets globally. They are also one of the largest defense contractors in the world. The company has created a diverse product portfolio by running its operations through six separate divisions. These divisions include: missile systems (MS), integrated defense systems (IDS), network centric systems (NCS), space and airborne systems (SAS), intelligence and information systems (IIS), and technical services (TS) (Raytheon’s Website). The ability to be so diversified is considered a major strength for the company.
Another major plus for the company is their consistent financial performance. Raytheon has seen a steady increase in both revenues and gross profits in almost all of the last four years. The company has also seen a strong rise in its adjusted earning...
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Northrop Grumman Corporation. (2010, August 20). Datamonitor 360. Retrieved July 24, 2011, from http://360.datamonitor.com.yosemite.wbu.edu/Product?pid=9D3EC0C0-911A-4E88-9064-4359FF254A52
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We compared the two companies in a variety of ways. To start, we will give a brief background
The dividends record from the period 2001 to date is shown in the table below. The company has made quarterly payments based on the presentation of their annual financial reports to the shareholders. The price per share has been increasing on average which is an expected positive return for the shareholders.
Lockheed Martin is an organization that heavily relies on its defense contracts in order to generate revenue. In 2005, 95% of Lockheed Martin’s revenue came from the US Department of Defense, other US Federal government agencies and foreign military customers (Defense News, 2007). Lockheed Martin earns this revenue by winning government contracts. As previously noted, Lockheed Martin has a large customer base with the US Department of Defense. The company is the largest provider of IT services, systems integration, and training to the government (Lockheed Martin, 2008). Other customers that provide revenue for Lockheed Martin are international governments and some commercial sales of products and services (Lockheed Martin, 2008).
There are many valuation methods that could be used to evaluate this company. Finding a method that valuates the stand-alone value is difficult. The stand-alone value should be dependent upon the firm’s own assets and projected future income. We decided to evaluate this company based upon two methods: The Discounted Cash Flow Method and the Comparable Companies Method.
The objective of this report is to give an overall view on research and analysis to regards of two companies, Wm Morrison Supermarkets Plc and Tesco Plc that I have chosen for. In this report, I will be comparing two companies’ financial analysis based on their comprehensive income and balance sheet for one year; and also will be comparing their generating cash ability, cash management and financial adaptability based on statement of cash flows for the past two year and also determine whether the two companies have the ability to repay their debts to their creditors, generating into cash and going concern which related to finance.
In terms of net income, Applied Materials is a leader in the semiconductor machinery industry with 2015 net income of $1.377 billion (Applied Materials:10-K 2016). Exhibit 1 shows net income in more detail. ASML Holding, a Dutch company, is consistently comparable to Applied Materials with regards to net income. However, as a Dutch company, some of the financial figures are not easily comparable due to different accounting standards. Another leading semiconductor machinery company, LAM Research, has had significantly less net income over the past five years. However, LAM Research still holds a strong position in the industry as shown by its market share of 13.2% (MarketLine 2014) and relatively high-diluted EPS of $3.7 (LAM Research 10-K 2015).
In terms of financial performance both companies have performed well. This brief review will focus on the financial performance such as profitability, solvency and liquidity.
Furthermore, because CRUS is a fabless company, it does not need to own or operate foundries for production. Instead it has developed a plethora of strategic alliances with a network of third-party contractors and chip assemblers for the manufacture, assembly and testing of its products. This strategy has allowed CRUS to keep CAPEX minimized and enabled them to focus their resources on design and development thereby encouraging innovation while reducing operational and financial risk (Zachs, 2017). The objective for the acquisition of CRUS would be to provide TMUS access to lower cost and higher quality software and hardware components allowing them to evolve their strategic position from cost focus to cost leadership by taking advantage of economies of scale in their manufacturing processes. Additionally, this acquisition will allow TMUS to take control over one of its competitor’s major suppliers as more than eighty percent of CRUS current business revenue stems from sales to Apple Inc. (Neiger, 2018). Interestingly, CRUS was once a rumored takeover target of Apple, but the acquisition never came to fruition (Truta, 2010). Moreover, CRUS strong manufacturing
BMW and Audi, two German automobile manufacturers, have a reputation for making some of the best cars in the industry. Not only are both companies superior in their production, but their financial statements also indicate stability and efficiency. Looking at financial ratios, we will compare both companies on a basis of management efficiency and debt status. As a bank analyst, we will make a recommendation as to which company would be better to approve a loan for. A recommendation will also be made regarding management effectiveness and which company would make a better investment.
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998
The financial position of a company offers great insight on the performance of the company on short-term and long-term basis. This work argues that Facebook Inc. is a company with a subjective investment portfolio. The purpose of this paper is to use ratio analysis to determine the position of the Facebook as an investment destination. The first section explores two ratios and their implications to a potential investor. The second part evaluates whether Facebook is bankrupt. The succeeding section offers advice to potential investors. The work culminates by highlighting key points and making necessary recommendations.
Organizations use financial statements and ratio analysis assess financial performance viability. The ratio analysis are used to identify trends and to perform organizational comparison (financial) with other companies within same industry. Ratio analysis, using data reported on the financial statements, are divided into five major categories: common size, liquidity, solvency, efficiency, and profitability. This paper will assess the financial stability of John Hopkins Hospital (JHH) using the five ratio analysis.
The companies I have selected for this assignment is Malaysia Steel Works (KL) Bhd (5098) and Kossan Rubber Industries Bhd. (7153), both of the company is from industrial products sector and its share is traded in main market.
University of Phoenix, (2007), retrieved January 19, 2007 from the University of Phoenix rEsource database MarketLine Business Information Center
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.