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2015-06-17 来源: 51due教员组 类别: 更多范文
这是一篇关于商业团队项目的报告~
1. Conduct DuPont ratio analysis and evaluate the business strategy by each company comparatively. Use income from continuing operation after tax to calculate profitability ratios.
As we all know, in DuPont ratio analysis, ROE=Profit Margin (Net Income/Net Sales) * Total Asset Turnover (Net Sales/Average Total Assets) * Equity Multiplier (Average Total Assets/Average Total Equity).
From the income statement, we can calculate that that the Net Income continuing operations after tax is $39,510 in 2014, $37,037 in 2013 and $41,733 in 2012. Net Sales is $182,795 in 2014, $170,910 in 2013 and $156,508 in 2012. Accordingly, the Profit Margin is 0.216 in 2014, 0.217 in 2013 and 0.267 in 2012.
From Balance sheet we know that total assets is $231,839 in 2014, $207,000 in 2013 and $176,064 in 2012. Accordingly Total Assets Turnover is 0.788 in 2014, 0.826 in 2013 and 0.889 in 2012. Also from the Balance sheet we know Total Equity is $111,547 in 2014, $207,000 in 2013 and $176,064 in 2012. Accordingly the Equity Multiplier is 2.08 in 2014, 1.68 in 2013 and 1.49 in 2012.
So ROE then is 0.354 for 2014, 0.301 for 2013 and 0.354 for 2014.
For Apple Profitability Ratios, Profit Margin on Sales is 0.216 in 2014, 0.217 in 2013, 0.267 in 2012. Return on Assets=Net Income/ Average Total Assets. The Return on Assets is 0.170 in 2014, 0.179 in 2013 and 0.237 in 2012. Return on Shareholders’ EQUITY = Net Income/ Average Shareholders’ Equity. So the Return on Shareholders’ Equity is 0.354 in 2014, 0.300 in 2013 and 0.353 in 2012.
HP. Profit Margin: 0.045in 2014, 0.046 in 2013 and -0.105in 2012.
Total Assets Turnover: 1.07 in 2014, 1.05 in 2013 and 1.01 in 2012.
Equity Multiplier: 3.81 in 2014, 4.25 in 2013 and 3.85 in 2012.
ROE: 0.183 in 2014, 0.184 in 2013 and -0.408 in 2012.
Business Strategy of HP. Compared with Apple, HP does not have a high ratio of Profit Margin, from the data show beside, HP can only make a profit of .045 dollars out of 1 dollar in 2014, at the same time Apple can make .21 dollars out of 1 dollar in 2014.
The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets. For HP company, Total Assets Turnover is 1.07 in 2014, which means that the amount of revenue generated per dollar of assets is 1.07 dollars. Compared with Apple’s .788, HP has the advantage here.
Equity Multiplier is a measurement of a company’s financial leverage. Companies finance the purchase of assets either through equity or debt, so a high equity multiplier indicates that a larger portion of asset financing is being done through debt.Compared to Apple’s 2.08, HP’s Equity Multiplier is 3.81, which is higher.
2. Assess the companies’ liquidity and solvency. Are the companies likely to meet their debts as they come due? Consider ratios such as the current ratio, the quick ratio, and the debt-equity ratio.
HP – Current Ratio: Current Ratio= Current Assets/ Current Liabilities. The Current Ratio is 2.01 in 2014, 2.18 in 2013 and 2.01 in 2012. And Current Ratio of Apple is 1.080 in 2014, 1.679 in 2013 and 1.496 in 2012.
HP – Quick Ratio: Quick Ratio= (Quick Assets – Inventory)/ Current Liabilities. Quick Ratio of HP is 1 in 2014, 0.69 in 2013 and 0.66 in 2012. Quick Ratio of Apple is 0.824 in 2014, 1.402 in 2013 and 1.241 in 2012.
HP Dept-Equity ratio: =Total Assets/Total Equity. HP Dept- Equity ratio is 0.73 in 2014, 0.83 in 2013 and 1.27 in 2012. Apple Dept-Equity ratio is 0.32 in 2014, 0.14 in 2013 and 0 in 2012. It seems that HP is not likely to meet their debts but Apple is likely to meet their debts as they come due.
3. Assess the cash flow of each company. Are cash flows from operations a source or a use of cash? How are operations and investments being financed? What differences do you note?
HP Operating Cash Flow Ratio indicates that the percentage of cash generated for every dollar of sales produced. It is important to note that this percentage has been increasing, positive sign for HP.
It can be included from HP Free Cash Flow Analysis that because HPQ has consistently paid dividends for some time and it would look bad to shareholders if one year it decided not to pay them.
Free Cash Flow is positive and grew by about 25% in 2013 and leveled off in 2014. HPQ must continue to find ways to keep growing its free cash flow so that its value continues to increase.
Apple Operating Cash Flow Ratio indicates that the percentage of cash generated for every dollar of sales produced. It is important to note that although the percentage decreased a little in previous years, it has been increased finally in 2014, a positive sign for Apple. And its Free Cash Flow Analysis indicates that because Apple has consistently paid dividends for some time and it would look bad to shareholders if one day it decided not to. Free Cash Flow is positive and grew by about 5.32% in 2014. Apple must continue to find ways to keep growing in free cash flow so that its value continues to increase.
4. Form investment recommendations based on your comparative analysis of the two companies, taking into consideration of how the current economic factors affect the companies’ operations.
1. Conduct DuPont ratio analysis and evaluate the business strategy by each company comparatively. Use income from continuing operation after tax to calculate profitability ratios.
As we all know, in DuPont ratio analysis, ROE=Profit Margin (Net Income/Net Sales) * Total Asset Turnover (Net Sales/Average Total Assets) * Equity Multiplier (Average Total Assets/Average Total Equity).
From the income statement, we can calculate that that the Net Income continuing operations after tax is $39,510 in 2014, $37,037 in 2013 and $41,733 in 2012. Net Sales is $182,795 in 2014, $170,910 in 2013 and $156,508 in 2012. Accordingly, the Profit Margin is 0.216 in 2014, 0.217 in 2013 and 0.267 in 2012.
From Balance sheet we know that total assets is $231,839 in 2014, $207,000 in 2013 and $176,064 in 2012. Accordingly Total Assets Turnover is 0.788 in 2014, 0.826 in 2013 and 0.889 in 2012. Also from the Balance sheet we know Total Equity is $111,547 in 2014, $207,000 in 2013 and $176,064 in 2012. Accordingly the Equity Multiplier is 2.08 in 2014, 1.68 in 2013 and 1.49 in 2012.
So ROE then is 0.354 for 2014, 0.301 for 2013 and 0.354 for 2014.
For Apple Profitability Ratios, Profit Margin on Sales is 0.216 in 2014, 0.217 in 2013, 0.267 in 2012. Return on Assets=Net Income/ Average Total Assets. The Return on Assets is 0.170 in 2014, 0.179 in 2013 and 0.237 in 2012. Return on Shareholders’ EQUITY = Net Income/ Average Shareholders’ Equity. So the Return on Shareholders’ Equity is 0.354 in 2014, 0.300 in 2013 and 0.353 in 2012.
HP. Profit Margin: 0.045in 2014, 0.046 in 2013 and -0.105in 2012.
Total Assets Turnover: 1.07 in 2014, 1.05 in 2013 and 1.01 in 2012.
Equity Multiplier: 3.81 in 2014, 4.25 in 2013 and 3.85 in 2012.
ROE: 0.183 in 2014, 0.184 in 2013 and -0.408 in 2012.
Business Strategy of HP. Compared with Apple, HP does not have a high ratio of Profit Margin, from the data show beside, HP can only make a profit of .045 dollars out of 1 dollar in 2014, at the same time Apple can make .21 dollars out of 1 dollar in 2014.
The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets. For HP company, Total Assets Turnover is 1.07 in 2014, which means that the amount of revenue generated per dollar of assets is 1.07 dollars. Compared with Apple’s .788, HP has the advantage here.
Equity Multiplier is a measurement of a company’s financial leverage. Companies finance the purchase of assets either through equity or debt, so a high equity multiplier indicates that a larger portion of asset financing is being done through debt.Compared to Apple’s 2.08, HP’s Equity Multiplier is 3.81, which is higher.
2. Assess the companies’ liquidity and solvency. Are the companies likely to meet their debts as they come due? Consider ratios such as the current ratio, the quick ratio, and the debt-equity ratio.
HP – Current Ratio: Current Ratio= Current Assets/ Current Liabilities. The Current Ratio is 2.01 in 2014, 2.18 in 2013 and 2.01 in 2012. And Current Ratio of Apple is 1.080 in 2014, 1.679 in 2013 and 1.496 in 2012.
HP – Quick Ratio: Quick Ratio= (Quick Assets – Inventory)/ Current Liabilities. Quick Ratio of HP is 1 in 2014, 0.69 in 2013 and 0.66 in 2012. Quick Ratio of Apple is 0.824 in 2014, 1.402 in 2013 and 1.241 in 2012.
HP Dept-Equity ratio: =Total Assets/Total Equity. HP Dept- Equity ratio is 0.73 in 2014, 0.83 in 2013 and 1.27 in 2012. Apple Dept-Equity ratio is 0.32 in 2014, 0.14 in 2013 and 0 in 2012. It seems that HP is not likely to meet their debts but Apple is likely to meet their debts as they come due.
3. Assess the cash flow of each company. Are cash flows from operations a source or a use of cash? How are operations and investments being financed? What differences do you note?
HP Operating Cash Flow Ratio indicates that the percentage of cash generated for every dollar of sales produced. It is important to note that this percentage has been increasing, positive sign for HP.
It can be included from HP Free Cash Flow Analysis that because HPQ has consistently paid dividends for some time and it would look bad to shareholders if one year it decided not to pay them.
Free Cash Flow is positive and grew by about 25% in 2013 and leveled off in 2014. HPQ must continue to find ways to keep growing its free cash flow so that its value continues to increase.
Apple Operating Cash Flow Ratio indicates that the percentage of cash generated for every dollar of sales produced. It is important to note that although the percentage decreased a little in previous years, it has been increased finally in 2014, a positive sign for Apple. And its Free Cash Flow Analysis indicates that because Apple has consistently paid dividends for some time and it would look bad to shareholders if one day it decided not to. Free Cash Flow is positive and grew by about 5.32% in 2014. Apple must continue to find ways to keep growing in free cash flow so that its value continues to increase.
4. Form investment recommendations based on your comparative analysis of the two companies, taking into consideration of how the current economic factors affect the companies’ operations.
Firstly, Apple Inc. should invest money in a safe environment, making sure any investment is worth the money. Secondly, Apple Inc. should take measures to make Return on Equity a lot better so that the whole trending will be upwards. Thirdly, Apple Inc. should not use too much debt on finance activities. Lastly, as for there are large quantity of cash, it is better to meet short-term obligations.
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