BMO Life Insurance Company Financial Analysis Using the 5 different ratio analysis used earlier to analyse BMO life insurance company’s Q2-2015 Consolidated Income statement and Q2-2015 Consolidated Balance sheet. BMO’s profit margin is 9.79%1. Meaning BMO earns more net income per $1 of sales than some or even most of its competitors. This can be rated as favorable in comparison to its industry average of 9.58%. BMO’s days’ sales uncollected is 21.84days2 favorable when compared to its industry’s average of 98.59 days. This means that BMO can liquidate it receivables in lesser days than some or most of its competitors. BMO’s equity ratio shows that the owners of the company only owns 10.66%3 of the company’s assets. Compared to its industry …show more content…
Which sense that, Sun Life earns more net income per $1 of sales than some or even most of its competitors. Sun life’s days’ sales uncollected 58.8days7 is favorable when compared to its industry’s average of 98.59 days. This means that Sun Life access its money in receivables faster than some or most of its competitors. Sun life’s equity ratio shows that the owners of the company only owns 10.18%8 of the company’s assets. Compared to its industry average, Sun Life can be rated as more favorable. Sun life’s debt ratio of 90.35%9 is higher than its equity ratio this is considered risky because the huge percentage of its asset is supported by debt. However, Compared to its industry average of 93.2% it is still considered favorable. Sun life’s return on total assets is 0.798%10 this favorable compared to its industry average of …show more content…
Meaning RBC isn’t operating in efficiency compared to its industry. BMO, RBC and Sun Life Insurance comparison Of the three insurance companies Sun life has the highest profit margin. Meaning it is operating more efficiently and earning more per $1 in sales than its two competitors. Whereas, RBC has the lowest profit margin of the three; which is not favourable. When it comes to days’ sales uncollected, BMO has the highest number of days. This means that it takes more days for BMO to turn its receivables into cash than its two competitors. This is unfavourable compared to RBC’s which has the lowest days’ sales uncollected. Equity ratio and debt ratio are both very important because it shows how much of the assets used for production is really owned by the owner of a company. According to calculations in the appendix, RBC has the highest equity ratio and the lowest debt ratio. This is considered favourable compared to Sun life and BMO’s equity and debt ratio. When it comes to return on total assets BMO has the highest return. Meaning it is earning more per assets than RBC and Sun
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The return on equity ratio is calculated by dividing the net income minus dividends by the equity. Per the Principles of Accounting textbook, “return on equities ratio enables the comparison of capital utilization among firms…this can help assess of effective the firm is in using borrowed funds”. Kinder Morgan’s return on equity ratio for December 2015 was .59%. In 2013 the ratio was 9.14% and in 2014 it was 3.01%. The return on equity ratio, like the return on assets ratio significantly declined over the past three years. One significant decrease to cause this decline is due to the deterioration of net income. Kinder Morgan’s net income from 2013 to 2015 was $1.19 billion, $1.02 billion, and $240 million successively. This sharp decline in net income can cause misplaced judgment on the decline of the debt ratios. When Kinder Morgan had a much higher income, their debt ratios were much
In conclusion, we have realized the significance of including just the netted plan assets and the PBO and not including the full amount of the plan assets and the PBO on the balance sheet. This type of accounting flexibility by the FASB helps companies and ultimately hurts investors who are unaware of the consequences. Usually, the estimated PBO and plan assets are very large in relation to the debt and equity capitalization of the company. The financial situation is therefore skewed and is not represented correctly on the company’s balance sheet which then in turn distorts financial ratios. Investors who are unaware of these accounting rules will end up making erroneous conclusions. Also, this accounting flexibility allows managers to manipulate financial statements whether intentionally or unintentionally by influencing their actuarial assumptions.
These accolades represent the Royal Bank of Canada’s leadership in granting customers and clients the finniest banking service and customer experience, which translates into one of the Royal Bank of Canada’s greatest strengths in the industry. This success is further evident through their second quarterly report of the 2015 year, in which the Royal Bank of Canada earned a net income 2.4 billion dollars (“About RBC”, n.d) compared to BMO, another member of Canada’s “big five”, that only earned 1 billion dollars of net income during the same year and quarter (“BMO Financial”, n.d). Furthermore, being one of Canada’s most well-known banks is another strength the Royal Bank of Canada can boast about; due to its popularity and relevance it is more often than not that clients will affiliate themselves with a trusted and relevant brand such as the Royal Bank of
By looking at the return on equity Hasbro is more efficient with investors money as not only did they earn more per invested dollar each year, but their efficiency increased while Mattel’s declined. By looking at the return on assets, Hasbro utilizes its assets more effectively as not only did they earn more per dollar of assets each year, but Hasbro’s ratio increased from 2015 to 2016 while Mattel’s declined. Hasbro has a higher turnover ratio than Mattel and increased from 2015 to 2016 while Mattel’s dropped. Hasbro is more efficient and is gaining efficiency while Mattel is losing it. By comparing inventory turnover ratios, Mattel’s has decreased and their days increased which means they are losing efficiency with selling their inventory. Hasbro’s is increasing meaning they are gaining efficiency. For the cash coverage ratio, Hasbro increased while Mattel fell. This means that from 2015 to 2016 Hasbro made more in cash for every dollar of interest paid while Mattel earned less per dollar from their previous year. Hasbro would be the better investment
To collect relevant data, the annual percentage change in net income per common share diluted, net income/net revenues, the major income statement accounts to net revenues, return on stockholders’ equity, the price/earnings (P/E) ratio, and the book values per share for each year numbers were examined. In order for Sun Microsystems to see a greater return in its bottom line assets, it must consider an alternative approach in operating its organization.
company, the benefit of bringing in a 35% net income outweighs the cost of a 2% loss of interest
... show that the company is growing and expanding, property and inventory, as a percentage of assets, should be increasing instead of decreasing. More property and inventory, if it is not owned by creditors, would also decrease their debt to total assets ratio.
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.
In the BB HOLDINGS LIMITED article about the Placing of US$50,000,000 ﬁxed rate 10 per cent on unsecured Loan Notes due 2013 and the Issue of Warrants to subscribe for 7,692,308 new ordinary shares at US$6.50 per new ordinary share. At that time BB holdings was seeking to expand these operations and exploit c...
A benchmarking analysis against competitors is provided in excel. These data indicate that Primo was performing poorly against its three competitors in terms of day’s receivable and day’s inventory. The fact that day’s payable was 40 days versus 30 days for the credit terms offered by its suppliers, and much higher than for its competitors, helps explain much of the reason for complaints from the company’s suppliers about late payments. In the future, Primo might have limited access to supplier credit, and suppliers might ultimately refuse to sell to the company unless payment is made up front in cash. The data also indicate that the company was performing poorly against its competitors in every profitability metric displayed.
It seemed that the company would fail soon because the ratios of profitability, asset efficiency, and liquidity decreased. However, that may not be true. Since the ratios of the debt to assets and the debt to equity went down over the past four years, the company became less dependent on leverage (Chron, n.d.). The company, therefore, is stable with a lower proportion of debt and has a stronger equity position. Thus, the company will still have chance to make their situation better if they heed few
All the more particularly, this decides the ability to absorb misfortunes, fund its extension, pay profits to its shareholders, and develop an adequate level of capital. Being front line of defense against the destruction of a capital base from misfortunes, the requirement for high profit and earnings can scarcely be overemphasized. Although diversifying pointers are utilized to fill the need, the best and most broadly utilize indicator is a Return on Assets (ROA). ROA is employed by establishments and banks to outfit them with an important instrument for evaluating their progress, including utilization of assets and financial quality (Haque, 2014). Then again, for inside and out examination, an alternate pointer Net Interest Margins (NIM) are likewise utilized. Chronically unfruitful money related establishment’s hazard bankruptcy. Contrasted and most different pointers, inclines in gains can be hard to decipher for cars, abnormally high benefit can reflect excessive danger