Analyze how the data differ between these two companies. Why do you think this is? Consider addressing the free cash flows and ratios you calculated
Analyze how the data differ between these two companies. Why do you think this is? Consider addressing the free cash flows and ratios you calculated earlier.
Are the companies considered growth or value companies? Why?
Which companys stock is the better investment? Consider supporting your answer with data.
Please be as detailed as possible, thank you so much!
Amazon:
| 2017 | ||||||
| Ratio Calculations | Equations | |||||
| Current ratio | 60,197,000 | / | 57,883,000 | = | 1.04 | current assets / current liabilities |
| Debt/equity ratio | 103,601,000 | / | 27,709,000 | = | 373.9% | total liabilities / total equity |
| Free cash flow | 18,434,000 | - | 27,819,000 | = | $ (9,385,000) | total operating cash flow - capital expenditures |
| Earnings per share | 3,033,000 | / | 480,000 | = | $ 6.32 | net income / common shares outstanding |
| Price/earnings ratio | 1169.47 | / | 6.32 | = | 185.04 | stock price / earnings per share |
| Return on equity | 3,033,000 | / | 27,709,000 | = | 10.9% | net income / total equity |
| Net profit margin | 3,030,000 | / | 177,866,000 | = | 1.7% | net income / total revenue |
| 2016 | ||||||
| Ratio Calculations | Equations | |||||
| Current ratio | 45,781,000 | / | 43,816,000 | = | 1.04 | current assets / current liabilities |
| Debt/equity ratio | 64,117,000 | / | 19,285,000 | = | 332.5% | total liabilities / total equity |
| Free cash flow | 16,443,000 | - | 6,737,000 | = | $ 9,706,000 | total operating cash flow - capital expenditures |
| Earnings per share | 2,371,000 | / | 474,000 | = | $ 5.00 | net income / common shares outstanding |
| Price/earnings ratio | 749.87 | / | 5.00 | = | 149.97 | stock price / earnings per share |
| Return on equity | 2,371,000 | / | 19,285,000 | = | 12.3% | net income / total equity |
| Net profit margin | 2,371,000 | / | 135,987,000 | = | 1.7% | net income / total revenue |
| 2015 | ||||||
| Ratio Calculations | Equations | |||||
| Current ratio | 36,474,000 | / | 33,899,000 | = | 1.08 | current assets / current liabilities |
| Debt/equity ratio | 52,060,000 | / | 13,384,000 | = | 389.0% | total liabilities / total equity |
| Free cash flow | 11,920,000 | - | 4,589,000 | = | $ 7,331,000 | total operating cash flow - capital expenditures |
| Earnings per share | 596,000 | / | 467,000 | = | $ 1.28 | net income / common shares outstanding |
| Price/earnings ratio | 675.89 | / | 1.28 | = | 528.04 | stock price / earnings per share |
| Return on equity | 596,000 | / | 13,384,000 | = | 4.5% | net income / total equity |
| Net profit margin | 596,000 | / | 107,006,000 | = | 0.6% | net income / total revenue |
J.C. Penny
| 2017 | ||||||
| Ratio Calculations | Equations | |||||
| Current ratio | 3,410,000 | / | 2,332,000 | = | 1.46 | current assets / current liabilities |
| Debt/equity ratio | 7,034,000 | / | 1,379,000 | = | 510.1% | total liabilities / total equity |
| Free cash flow | 454,000 | - | 395,000 | = | $ 59,000 | total operating cash flow - capital expenditures |
| Earnings per share | -1,160,000 | / | 312,000 | = | $ (3.72) | net income / common shares outstanding |
| Price/earnings ratio | 3.16 | / | 3.72 | = | 0.85 | stock price / earnings per share |
| Return on equity | -1,160,000 | / | 1,379,000 | = | -84.1% | net income / total equity |
| Net profit margin | -1,160,000 | / | 12,506,000 | = | -9.3% | net income / total revenue |
| 2016 | ||||||
| Ratio Calculations | Equations | |||||
| Current ratio | 4,097,000 | / | 2,419,000 | = | 1.69 | current assets / current liabilities |
| Debt/equity ratio | 7,960,000 | / | 1,354,000 | = | 587.9% | total liabilities / total equity |
| Free cash flow | 334,000 | - | 427,000 | = | $ (93,000) | total operating cash flow - capital expenditures |
| Earnings per share | 1,000 | / | 308,300 | = | $ 0.00 | net income / common shares outstanding |
| Price/earnings ratio | 8.31 | / | 0.00 | = | 2,561.97 | stock price / earnings per share |
| Return on equity | 1,000 | / | 1,354,000 | = | 0.1% | net income / total equity |
| Net profit margin | 1,000 | / | 12,547,000 | = | 0.0% | net income / total revenue |
| 2015 | ||||||
| Ratio Calculations | Equations | |||||
| Current ratio | 4,018,000 | / | 2,412,000 | = | 1.67 | current assets / current liabilities |
| Debt/equity ratio | 8,133,000 | / | 1,309,000 | = | 621.3% | total liabilities / total equity |
| Free cash flow | 440,000 | - | 320,000 | = | $ 120,000 | total operating cash flow - capital expenditures |
| Earnings per share | -513,000 | / | 306,100 | = | $ (1.68) | net income / common shares outstanding |
| Price/earnings ratio | 6.66 | / | 1.68 | = | 3.96 | stock price / earnings per share |
| Return on equity | -513,000 | / | 2,412,000 | = | -21.3% | net income / total equity |
| Net profit margin | -513,000 | / | 12,625,000 | = | -4.1% | net income / total revenue |
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Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
16th Edition
78110939, 978-0078110931
