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.
The rate of return on assets measures the use of corporate creditors and owners of total profits. The higher the index, the better use of corporate assets, indicating that enterprises succeed in income and savings .The use of funds achieved good results. As Sainsbury, its ROA in 2014 was 4.33%, down by 1.56% in 2016 slightly, but overall remained stable, which shows the capital flow quick speed , the small amount of funds occupied, the volume of business. Due to its stability, the risk of operation is low and the level is good. The return on equity shows the return on the capital provided by the shareholders after payment to other capital providers.
This ratio shows how much company earned on the money of shareholders. In 2012, ROE is deeply negative at 44.4% but in 2013, it got significantly improved and touched 6.5%. However, it can’t be treated as a healthy figure but in comparison to profit margin or operating ratio, it is a respectable one. Return on Assets (ROA) is defined as net profit/total assets. This ratio shows the earnings on employed assets.
85,320,000/((174,472,000+193,694,000)/2)= 46.35% 37,057,000/((110,903,000+112,180,000)/2)= 33.22% The above calculation shows that Microsoft uses the assets more efficiently than Oracle. Microsoft applies the assets to compensate for expenditures and in turn it generates more revenue. Return on Equity (ROE) Formula: ROE = Net Income / (Shareholder’s Equity (total Equity of Previous year + Current Year/2)) No. Microsoft Oracle 1. 3,122,000/(8,013,000+80,083,000)/2)= 7.08% 2,814,000/((4,305,000+48,663,000)/2))= 10.63% ROE calculation is also an indicator how management using equity to fund operations for the grow the company.
Thus, IOCL has a better short term solvency position than HPCL even though it has not reached the ideal ratio i.e. 1. However, considering that the company is dependent on the government grants and subsidies, IOCL is in a safe zone and hence it enjoys a good creditworthiness and goodwill. The above table shows the quick ratio. From the table the quick ratio is increasing for the past few years hence the liquidity position of the firm is better in the current year compared to its own past position and position of HPCL.
NIKE’s improved gross margin can be attributed to two factors, higher average net selling prices and growth in higher-margin direct-to-customer business (NIKE 10-K, 2015). And due to this enhancement, NIKE’s gross profit margin 46.0% was almost the same as industry’s average 46.20%. The higher selling price and higher-margin business also lead the operating profit margin and net profit margin to increase about 1% from 2013 to 2015. Normally, if the net profit margin is under 10%, it indicates that the firm is in a highly competitive business (Ventureline, 2015a). And comparing to the net profit margin of industry 10.2% or Adidas 3.29%, NIKE’s 10.7% also performed better in 2015.
Neither company is using its assets effectively which could suggest the business is accumulating assets that aren’t helping the business to generate profits. HGHL appears to be the preferable company to invest in, because it excels in all three of the profitability ratios. Growth Ratios The EPS ratio shows the amount of earnings for each issued ordinary share. It allows shareholders to evaluate what their shares of profits are. The EPS ratio for PPGL shows a decreasing trend, as it drops from $2.76 in 2009 to -$31.96 in 2013 with its peak in 2011 at $3.19.
This is found by dividing the sales by the average accounts receivable. The purpose of using this equation is to see how easily a company collects its debts (Warren, Reeve and Duchac, 2016, p. 804). Hasbro’s accounts receivable turnover for 2012 was 3.96. They did only a 3.84 in 2013. According to my figures, the ratio for accounting receivable turnover was only slightly better for Hasbro in 2012 than it was in 2013.
The bottom line is that the risk of investing stocks is much less than it ever has been before. The level of the risk premium is heading towards zero, while currently holding at 3%. That 3% is much better than the historical average of 7%. James K. Glassman and Kevin A Hassett, authors of the book, “Dow 36,000,” claim that the prediction of the Dow reaching 36,000 is not out of the realm of possibilities. If the earnings grow in the long term at the same rate as the GDP and treasury bonds are below 6%, then it is very possible for the Dow to hit a level of 36,000.
This clearly reflects Pfizer's profitability and excellent operating efficiency. Pfizer's financial position has been remained strong over the period. The Current Ratio is 1.54. Current ratios above 1 mean that a company's short-term debts are less than its assets. The higher the Current ratio, the stronger the company's finances are.