Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The 2 articles below is my classmate discussion post Can you please look through the responses of classmates and Compare your conclusion based on your

The 2 articles below is my classmate discussion post Can you please look through the responses of classmates and Compare your conclusion based on your market ratio analysis with the P/E ratio analysis results of other students. Does it change your decision to buy the stock of the company assigned to you for the project? ( There is two separate article answer them separately) Can you please include sources in Citation format ?

image text in transcribedimage text in transcribed
The PE ratio is a simple way to assess whether a stock is over or under valued and is the most widely used valuation measure. A company can benefit from having a good P/E ratio if it is not generating any money or is in the red. With a high P/E ratio, investors are more likely to predict that it will perform well in the future. On the other hand, with a low P/Eratio, firms may be undervalued. General Motors current p/e ratio is 5.84(Morningstar). This is a great p/e ratio for investors. I believe that General Motors Company (GM) is a good buy at this price, as it offers investors a secure and profitable option. Although the price is up, it can still make money as well. Ford who is another household name a major competitor has a p/e ratio of 11.83. Another major competitor Toyota h a p/e of 12.0(n.d) General Motors stock is undervalued. General Motors stock is cheaper compared to its earnings, making it a potential bargain for investors1. Analysis of Starbucks P/E Ratio The current P/E ratio for Starbucks Corp (SBUX) is 22.43 as of June 9, 2024. As of June 30, 2023, a year prior, it was 29.48. I compare this ratio to the industry average and major competitors to assess whether Starbucks is overvalued, undervalued, or properly valued. Industry Average and Competitors: - Industry Average P/E Ratio: As of the latest data, the average P/E ratio for the restaurant industry is approximately 24. - Major Competitors: - Mcdonald's Corp (MCD): P/E ratio around 25. - Yum! Brands, Inc. (YUM): P/E ratio around 27. - Dunkin' Brands (DNKN): P/E ratio around 26

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Financial & Managerial Accounting The Financial Chapters

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura

4th Edition

0133255573, 978-0133255577

More Books

Students also viewed these Accounting questions

Question

Project: Ambulatory Surgery Centers the training staffs

Answered: 1 week ago