How Do Investor Ratios Assess Earning And Stock Performance Of A Company

The following report is a brief comparative analysis of two of Australia’s largest deposit-taking financial institutions (FI), Australia and New Zealand Banking Group Ltd. (ANZ) and Westpac Banking Corporation (Westpac). This report seeks to identify which of the FIs has a greater aggregate return per dollar of equity and thus establish the highest performer, or most profitable, of the two. The Return on Equity Model (ROE) (Koch & MacDonald,

Is it possible for companies both to maximize financial value and be socially responsible? Explain

They way the investors would benefit from our ratio tables, is by looking at and comparing Profitability ratios by comparing Profit margins, return on equity or by comparing solvency ratios such as debt ratio and equity ratios with the other companies being presented in our research analysis. For more detailed information they can check the balance sheets and income statements that are being portrayed in the report and look at the progress of the companies within the last four years. Therefore, helping make their decisions easier and faster.

Ratios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage, and interest coverage. Although ratios report mostly on past performances, they can be predictive too, and provide lead indications of potential problem areas. Financial ratios are important because they help investors make decisions to buy hold or sell securities.

Ratios are important in any type of business, because ratios are sued all the way across the board. many financial ratios are used for the purpose of credit analysis, to see where a company stands financially. The three types of ratios are liquidity, solvency, and profitability. Within these main ratio types there are also 8 other basic types of ratios.

This report provides a financial quarterly trend analysis for Costco Wholesale Corporation, Inc. founded in 1983. Costco Wholesale Corporation is the seventh largest retailer company in the world. As of July 2012, it was the fifth largest retailer, and the largest membership warehouse club chain in the United States ("Wikipedia, the free," 2011). Costco Wholesale Corporation’s stock is publicly traded on the National Association of Securities Dealers Automated Quotation (NASDAQ) under the symbol “COST”, which I will use as reference throughout this report.

Whereas the investors primarily use the Return on investment ratio to monitor how well the company is utilizing their investment.

Investors will look to review the financials of this company not just that they have heavy foot traffic. A Debt-to-Asset ratio looks to see how much of the company’s assets are being financed with debt. This could provide insight to possible risk. Another ratio to review will show a company’s financial leverage and that ratio

The ratio measures the company’s ability to meet its debt obligations. It allows investors to see to what extent company’s earning can decline without the firm being unable to pay its annual interest costs. Nevertheless, a high ratio can indicate that a company has an undesirable lack of debt or it is paying too much debt with earning that could be invested in other projects.

Investors refer to people who willingly input money into a business with the expectations of a return in future. Normally, investors have an interest in all the ratios as they indicate the financial health of a firm. One of the most important ratios to potential investors is return on shareholders’ equity. The ratio measures the percentage return that investors get for every dollar of their investment in a company. For example, from the calculation above, Macy’s Inc shareholders got a 25.18% for every dollar invested in year 2015. A high ROE is an indicator of high returns to the shareholders.

In order to evaluate your understanding of the use of accounting information, you are asked to analyze the 2007 financial statements of The Procter & Gamble Company (P&G). The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website,

The ratios that would be most important to a business include: the current ratio, debt ratio and the return on assets. The current ratio is comparing the company's ability to pay its short term obligations. In general, the higher the number, the lower the risks that a firm will face from these challenges. This is important to a business, by helping executives to ensure that they have enough liquidity to pay creditors, employees and address other challenges. ("Financial Ratios," 2011)

The profitability ratios show how well the company did in their overall performance, The financing ratios indicate how the company manages their long term solvency, And the investment

These ratios are comparing the income statements accounts and categories to reflect and to present the company’s ability of generating profit from their operations. They can be used by investors and as well by creditors to judge the company returns on investment based on its relative level of assets and resources.

Financial results and conditions vary among companies for a number of reasons. One reason for the variation can be traced to the characteristics of the industries in which companies operate. For example, some industries require large investments in property, plant, and equipment (PP&E), while others require very little. In some industries, the competitive productpricing structure permits companies to earn significant profits per sales dollar, while in other industries the product-pricing structure imposes a much lower profit margin. In most low-margin industries, however, companies often experience a relatively high rate of product throughput. A second reason for some of the