Stock Performance Home Depot’s P/B ratio has averaged 12.4 since 2012. A low of 5.2 in 2012 has risen to a high of 22.4 which is the current TTM. LOW’s P/B ratio has averaged 5.4 since 2012. It also had its low in 2012 with a ratio of 2.8. The peak since 2012 was reached with the TTM’s ratio of 8.4. The SPX has averaged 2.5 since 2012. As can be seen, HD and LOW have significantly higher P/B ratios than SPX. Home Depot’s higher P/B ratio signifies the company is more overvalued than LOW. Home Depot is seen as an average rise P/B ratio since 2014. The High P/B ratio is a sign that a business has healthier future projections then past performance. Price per share can be high relative to book value because investors have to bid up the share …show more content…
With that said, LOW’s P/B ratio has risen, but not as significantly as Home Depot. This tells you that LOW’s performance is not as impressive as Home Depot, albeit, significantly better than the SPX average. LOW’s P/B ratio signifies less investor confidence. A low of 1.3 in 2012 has risen to a high of 1.65 which is the current TTM. LOW’s P/S ratio has averaged 1.08 since 2012. It also had its low in 2012 with a ratio of 0.8. The peak since 2012 was reached in 2015 with a ratio of 1.3. LOW’s current TTM is 1.2. The SPX has averaged 1.65 since 2012. As can be seen, Home Depot current P/S Ratio is slightly higher than the SPX. On the other hand, LOW’s is lower than Home Depot. Home Depot’s higher P/S ratio means that investors will pay more for every dollar of sales that Home Depot generates. As of the most current P/S ratio, investors will pay $1.60 for every dollar that Home Depot generates in sales. LOW’s current P/S ratio of 1.2 means investors will pay $1.20 for every dollar that LOW generates in sales. This indicates that LOW would be the best value in regards to the P/S ratio. LOW’s ratio has slightly fallen from 2014 to TTM, therefore further spreading the gap between Home Depot and LOW. Home Depot has
Overall, The Home Depot’s market conditions are improving as basic earnings per share increased, as well as dividend yield percentage. The decrease in the P/E and dividend payout ratios can be explained through positive
...for Home Depots earnings, with the numbers overall being so close Lowes would probably be a better choice for investing. But, really either company is probably not a bad investment.
Still, diluted EPS fell from $8.63 in 2014 to $5.77 in 2015 - a 49.6% decrease, which is a very discouraging sign.
Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and quick ratio are really low and have been decreasing. For 1995, the current ratio is 1.15:1, which is less than the industry average of 1.60:1, however to give a better sense of where this stands in the industry, as seen in exhibit 3, it is actually less than the average of the bottom 25% of the industry. The quick ratio is 0.61 is less than the industry is 0.90. Both these ratios serve to point out the lack of cash in this company. The cash flow has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. Also, the company couldn’t go over the $400,000 loan limit, so they were forced to stretch their cash.
As compared to its competitors BG Group, the current ratio of British Petroleum is slight high that is 1.57 (BG Group , 2014). The current ratio of BG Group is 1. 57 which indicate that as compared to British Petroleum, BG Group are in better position to satisfy its short term debt.
Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of how much liabilities a company has compared to its assets. Wal-Mart in the year of 2007 had a current ratio of .90, and as of January 2008 it had a current ratio of .81. The quick ratio, which is defined as current assets minus inventory divided by current liabilities, is a measure of a company's ability pay short term obligations. Wal-Mart in the year of 2007 had a quick ratio of .25, and as of January 2008 it had a ratio of .21. Both the current ratio and quick ratio are a measure of liquidity. Wal-Mart is not as liquid as its competitors such as Costco or Family Dollar Stores Inc. I believe the reason why Wal-Mart is not too liquid is because they are heavily investing their profits for expansion and growth. Management claims in their financial report that holding their liquid reserves in other currencies have helped Wal-Mart hedge against inflationary pressures of the US dollar. The next ratio to look at is the inventory ratio which is defined as the cost of sales divided by average inventory. In the year of 2007, Wal-Mart’s inventory ratio was 7.68, and as of January 2008 it was 7.96. Wal-Mart has a lot of sales therefore it doesn’t have too much a problem of holding too much inventory. Its competitors have similar ratios though they don’t have as much sales as Wal-Mart. Wal-Mart’s ability to sell at lower prices for same quality, gives them the edge against its competition. As of the year 2007, Wal-Mart had a debt ratio of .58, and as of January 2008, it had a debt ratio of .59. The debt ratio is calculated by dividing the total debt by its total assets. Wal-Mart has a lot more assets than it does debt so Wal-Mart is not overleveraged.
Second, the rapid development of the Home centers such as The Home Depot, with prices 30% less than the traditional hardware store made Black & Decker to lose market share to Makita. As per Exhibit 2 we could notice that in the home center channel that represent 25%of the trades...
Average inventory is calculated using the sum of the first quarterly reporting month to the last quarterly reporting month and then dividing this quantity by two (Gibson, C.H., 2013, pg. 239). With this tool we can see if a business is turning over inventory in an adequate industry manner. It is a beneficial to compare with other similar industries. A high score shows that a business is bringing in inventory and getting rid of it quickly (Gibson, C.H., 2013, pg. 239). A low score means that inventory is not turning over as quick as possible. This indicator allows a business to stock up to meet the inventory necessities. In our comparison with Home Depot and Lowe’s we see a major difference in inventory turnover. Lowes leads with 116% and Home Depot at 13%.s a result we see that Home Depot is turning inventory in a great manner that it is possible to increase
According to its annual financial reports Bed Bath & Beyond has shown a small but steady increases in sales and revenue for the past four years (Appendix, Bed Bath & Beyond Inc., 2016). But only by 3.28% for 2015, compared to 14.89% in 2013, showing a decline in growth (Bed Bath & Beyond Inc., 2016). Although this company’s net income growth has been declining over the last three years its gross profit margin is higher than industry the average at 38.17% (Bed Bath & Beyond Inc., 2016). Since 2010, the company has spent over $7.5 billion repurchasing its stock to increase outstanding stock value, demonstrating Bed Bath & Beyond’s commitment to its shareholders (Duprey,
These small retail outlets -- shoe stores, food stores and book stores -- have become the bedrock of downtown and urban redevelopment across the country. Industry Statistics Dec 2007 Valuation Ratios P/E(ttm) 22.80 P/Sales(ttm) 1.34 P/Book(mrq) 13.07 P/Cash Flow(mrq) 11.17 Profitability ( ttm) Gross Margin % 34.59%. Operating Margin % 9.54% Net Profit Margin % 9.19%.
The ratio analysis of both companies has shown that both Barratt and Persimmon operated well in 2013 and 2014. The companies demonstrated an upward trend in all their growth and profitability ratios despite the fact that the UK housebuilding industry faced some problems such as high prices, lack of available land, material and labour. EPS grew substantially both for Barratt and Persimmon, however, Persimmon EPS is almost 4 times higher than Barratt EPS. Both companies used their current assets in an efficient way but in terms of net profit growth Barratt was more efficient than Persimmon. Positive trends for both companies during the previous period, renewed consumer confidence and more accessible mortgage finance allow to forecast future growth
The ratio of 1.7 for the last two years indicates consistency, although a lower number is preferred. As a company produces high value product, this could be a satisfactory ratio. By comparing it to 2011 when a ratio was 2.9, in the last two years a ratio improved
For our Sample Co. there are several ratios that are low, for the average manufacturing company. The ROI and ROE are below average as are the current ratio and the acid-test ratio. The P/E ratio is $42 / $3.51 = 12, which seems very good and both the debt ratio and debt to equity ratio are within the guideline. With the good and bad of these ratios hard to tell what sort of industry this is. With the ROI, ROE, and acid-test low like they are it doesn't seem like a retailer/merchandising company, and a e-commerce for 2000 would probably have a P/E greater than 12. What that leaves is an international service company of some kind, so I'll go with that.
This bar graph is showing that the trend is sporadic from year to year. This ratio shows the company’s total sales that are available for financing and supporting the company’s ongoing operations. Large ratios are needed to show that the company is in a better place to develop than its rivals. Kraft Food Group has room to grow in this
The Quick Ratio shows that the company’s cash and cash equivalents are the highest t...