The debt-to-equity ratio indicates a company’s reliance on loaned money. The lower the number, the less reliant a company is on borrowing money for operations. AT&T has a relatively low debt-to-equity ratio compared to the market average and
Another observation is that GM looks to use more debt financing that equity financing for funding their activities. The debt to equity ratio has steadily decreased over the past five years and is higher that the industry average. Also, the current and quick ratios are much lower than the industry averages. This again can pose so...
On the other hand (Ahmed, 2006). Said that lack of information will severely limit analysis. As ratios are based on income financial accounts which are subject to the limitations of historical cost accounting. Further to this Inflation, differing bases for valuing assets, or specific price changes which can distort inter-company comparisons and comparisons made over time. In my opinion (Delen, Kuzey and Uyar, 2013) has better concluded the discussion upon limitation by pointing out inflation and historical costing
There are many factors behind the continuous growth of AutoZone (AZO), an automotive aftermarket retailer, which is showing no signs of stopping anytime soon. Over the last year, the stock has returned 35.67% compared to 58.68% and 44.20%, respectively, for Advance Auto Parts (AAP) and O’Reilly Automotive (ORLY). Clearly AutoZone is an industry-laggard, however, below are a few reasons to remain optimistic on the stock.
The debt ratio is calculated using short term and long term debt relative to the total assets of an organization. The higher this figure is, the riskier a financial investment the organization is. The industry average has a debt ratio of 55%, a more promising figure than Happy Hamburger had before its increases, 68%. The debt ratio would have been considered a weakness for Happy Hamburger, but with the increased figures taken into consideration, this figure is a strength for Happy Hamburger at 39%, a more favorable figure than the industry average and indicating the organization is a less risky
Short term liabilities can be met either by cash or marketable securities. Cash can be better utilized in contingencies or can be used in business for very short term operational requirements. It is good for the business to use its large portion of cash for that purpose rather than to meet the creditors’ obligation. So the cash ratio of MCS is very poor and therefore it has to ensure increase in near future.
The report will be for the fiscal period ending May 31st, 2018. The reported EPS for the same quarter last year was $8.08. The estimated EPS forecast for the next fiscal year is $55.32 and is expected to report on September 18th, 2018. Even as the economy has improved, though, AutoZone's stock remains near its highs. The recent correction has again raised the specter of a double-dip recession, which could once again resurrect the vehicle-maintenance cycle and cause new car sales to slow. AutoZone has had relatively healthy earnings over the past several years. The company's negative shareholder equity raises some concerns, although it stems largely from huge share buybacks that AutoZone uses to return cash to shareholders rather than through a dividend. Nevertheless, the company has funded those buybacks in part through increasing debt, which makes its balance sheet uglier than its peers. If the economy remains tough, then AutoZone could get another boost up from higher consumer demand. But if a true recovery takes hold, AutoZone might not look like a perfect stock for a while to come. Stocks carry a much greater risk of short-term losses than bonds or cash (the other two major asset classes). Since World War II, Wall Street has endured six bear markets (defined as a sustained decline of more than 20% in the value of the S&P 500). As a result, it's generally not a good idea to invest a big chunk of money in stocks if
During the last eight quarter, debt to assets ratio increased from 62% to 68% and the reason for that is because the total assets have decreased from $12.3 billion to $9.7 billion. Total liabilities have decreased as well from $7.6 billion to $6.6 billion. Even though both assets and liabilities decreased, assets decreased by much high percentage than liabilities did. For the last six quarters, the times interest earned ratio was negative which means that the EBIT was negative. Along with that, the EBIT is decline more and more every quarter. During the third quarter in 2011, EBIT was -$171 million and during the fourth quarter in 2012, it was -$745 million. Overall, both liquid and leverage ratios indicate the financial health of the company is declining. Company is losing assets (mostly cash) and they are not as liquid as they used to be. The assumption is that the company will be out of cash by the end of 2013.
When looking at Ann Inc.’s income statement and balance sheet after the fiscal 2015, this company seems to be doing pretty well. For the most part, a lot of their numbers are increasing from the previous years and are heading in the right direction. After an acquisition by Ascena Retail Group, Inc. a couple years ago, Ann Inc. stock become a part of Ascena group stock (ASNA:US) at the beginning of last year. At the end of January 2015, the stock price for Ascena group was $11.56. At the end of January 2016, the stock price was worth $7.58 having plunged when the Ann Inc. stock was integrated into the Ascena group’s stock. (ASNA:
The current ratio is commonly used to indicate the company's ability to pay back its short term obligations (debt and accounts payable) with its current assets. When the ratio gets higher, the company becomes more capable of paying its obligations. A current ratio higher than one indicates that the enterprise’s
new-car market may have stalled, but GM's profitability is still growing, thanks to smart management moves and new products that deliver higher margins. Most importantly, GM is stock is cheap! Historically, automakers have traded around 10 times earnings, maybe a little higher in good times. Times are still good right now, but GM's valuation is low at just 7.7 times its expected 2017 earnings. General Motors pays a great dividend to its investors because GM's stock valuation is low, its dividend yield is a nice 3.5%. GM has been doing well in today’s markets. The US car market is down 1.8% as of October of 2017; GM's U.S. sales are up 8.1% this year because of their new line of SUV’s, and crossovers. General Motors will and continue to be an outstanding
A higher ratio than its competitors suggests a strong financial position of the company and its ability to meet short-term requirements than other companies in the industry. Strong liquidity position puts the company at an advantage to fund any potential opportunity arising in the
This ratio shows the % return on capital invested in the company. A business will aim to have this ratio as high percentage as possible. If the percentage return on capital invested is less than that offered elsewhere, then it may be wise to close the business and invest elsewhere. The ratio analysis shows that Marks and Spencer saw a slight drop on their R.O.C.E from 1999 to 2000, however, they managed to increase the
Ratios traditionally measure the most important factors such as liquidity, solvency and profitability, as well as other measures of solvency. Different studies have found various ratios to be the most efficient indicators of solvency. Studies of ratio analysis began in the 1930’s, with several studies of the concluding that firms with the potential to file bankruptcy all exhibited different ratios than those companies that were financially sound. Among the study’s findings were that the deciding factor of the predictor of bankruptcy should not be only a few ratios, as the measure of a company’s financial solvency may differ as the firm’s situations differ. The important question is to which ratios are to be used and of those ratios chosen, which ratios are given priority weight.