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use the given ratios of ten stocks to fill out the investment assignment part 4 questions Adobe(ADBE): Current Ratio =1.25 Profit Margin =27.11% Return on
use the given ratios of ten stocks to fill out the investment assignment part 4 questions
Adobe(ADBE): Current Ratio =1.25 Profit Margin =27.11% Return on Assets =19.72% Return on Equity =33% Long-term debt to total assets =23% Amazon(AMZN): Current Ratio =0.95 Profit Margin =2.43% Return on Assets =5.73% Return on Equity =16.71% Long-term debt to total assets =0.29% Apple(AAPL): Current Ratio =0.98 Profit Margin =24.31% Return on Assets =23.84% Return on Equity =129.91% Long-term debt to total assets =0.29% Bank of America(BAC): Current Ratio =0.83 Profit Margin= 19.97% Return on Assets =0.94% Return on Equity =10.52% Long-term debt to total assets =0.09% Return on Assets =15.93% Return on Equity =60.14% Long-term debt to total assets =0.74% Tesla(TSLA): Current Ratio =1.69 Profit Margin =12.97% Return on Assets =12.19% Return on Equity =21.80% Long-term debt to total assets =0.04% Walt Disney Co(DIS): Current Ratio =1.07 Profit Margin =2.56% Return on Assets =0.90% Return on Equity =2.7% Long-term debt to total assets =0.22% Lululemon Athletica(LULU): Current Ratio =2.40 Profit Margin =15.46% Return on Assets =23.63% Return on Equity =29% Long-term debt to total assets =0.16% Lyft(LYFT): Current Ratio =0.82 Profit Margin =30.87% Return on Assets =10.18% Return on Equity =118.86% Long-term debt to total assets =0.22% Nasdaq(NDAQ): Current Ratio =1.60 Profit Margin =18.08% Return on Assets =25.10% Return on Equity =18.50% Long-term debt to total assets =1.59% Starbucks(SBUX): Current Ratio =0.78 Profit Margin =12.45% Investment Assignment (Part 4) Part 3 in the previous chapter requested that you obtain ratios such as the ROE and the profit margin. A high profit margin and a high ROE are desirable, but those data are derived from the firm's balance sheet and do not consider the actual price that you have to pay for the stock. The following ratios add the stock's price to help determine whether you should buy or sell the stock. 1. Fill in the following table for each of your companies. 2. Rank the stocks from best to worst (e.g. lowest P/E to highest P/E, lowest P/B to highest P/B, and so on for each ratio). 3. Are the rankings consistent? Based on the valuation ratios, which stocks appear to be the best and the worst? Are you having trouble drawing a conclusion? 4. Add the beta coefficients to the initial table. Is there a relationship between the betas and each ratio? A low beta and a low valuation ratio may suggest that the stock is undervalued. 5. The next table concerns dividends and earnings. You may have trouble finding growth rates, especially if the firm is operating at a Ince. High dividend vields and high growth rates increase the stock's attractiveness. 6. Based on the information that you derived, would you sell any of the ten stocks that you selected? Adobe(ADBE): Current Ratio =1.25 Profit Margin =27.11% Return on Assets =19.72% Return on Equity =33% Long-term debt to total assets =23% Amazon(AMZN): Current Ratio =0.95 Profit Margin =2.43% Return on Assets =5.73% Return on Equity =16.71% Long-term debt to total assets =0.29% Apple(AAPL): Current Ratio =0.98 Profit Margin =24.31% Return on Assets =23.84% Return on Equity =129.91% Long-term debt to total assets =0.29% Bank of America(BAC): Current Ratio =0.83 Profit Margin= 19.97% Return on Assets =0.94% Return on Equity =10.52% Long-term debt to total assets =0.09% Return on Assets =15.93% Return on Equity =60.14% Long-term debt to total assets =0.74% Tesla(TSLA): Current Ratio =1.69 Profit Margin =12.97% Return on Assets =12.19% Return on Equity =21.80% Long-term debt to total assets =0.04% Walt Disney Co(DIS): Current Ratio =1.07 Profit Margin =2.56% Return on Assets =0.90% Return on Equity =2.7% Long-term debt to total assets =0.22% Lululemon Athletica(LULU): Current Ratio =2.40 Profit Margin =15.46% Return on Assets =23.63% Return on Equity =29% Long-term debt to total assets =0.16% Lyft(LYFT): Current Ratio =0.82 Profit Margin =30.87% Return on Assets =10.18% Return on Equity =118.86% Long-term debt to total assets =0.22% Nasdaq(NDAQ): Current Ratio =1.60 Profit Margin =18.08% Return on Assets =25.10% Return on Equity =18.50% Long-term debt to total assets =1.59% Starbucks(SBUX): Current Ratio =0.78 Profit Margin =12.45% Investment Assignment (Part 4) Part 3 in the previous chapter requested that you obtain ratios such as the ROE and the profit margin. A high profit margin and a high ROE are desirable, but those data are derived from the firm's balance sheet and do not consider the actual price that you have to pay for the stock. The following ratios add the stock's price to help determine whether you should buy or sell the stock. 1. Fill in the following table for each of your companies. 2. Rank the stocks from best to worst (e.g. lowest P/E to highest P/E, lowest P/B to highest P/B, and so on for each ratio). 3. Are the rankings consistent? Based on the valuation ratios, which stocks appear to be the best and the worst? Are you having trouble drawing a conclusion? 4. Add the beta coefficients to the initial table. Is there a relationship between the betas and each ratio? A low beta and a low valuation ratio may suggest that the stock is undervalued. 5. The next table concerns dividends and earnings. You may have trouble finding growth rates, especially if the firm is operating at a Ince. High dividend vields and high growth rates increase the stock's attractiveness. 6. Based on the information that you derived, would you sell any of the ten stocks that you selected Step by Step Solution
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