Despite a decline in the ratio for the past two years, the company’s current ratio has increased in 2016 by 0.03. The data for Quick Ratio was extracted from the Gurufocus.com and is represented in the excel graph below. The Quick Ratio shows the company’s ability to cover its current liabilities with its most liquid assets. For the past five years, the ratio has been fluctuating under 1, which means that the company cannot currently pay its liabilities and would not be attractive investors as a potential company to invest in. Return on Equity ratio points at the company’s efficiency and earnings performance.
As of 2015 this would be 118.85 / 2551.71 ie., 4.66% Hence WACC would be as follows: 1. As a team we can after careful analysis observe that Tesla’s present business strategy is concentrating upon the upper middle and the affluent class of the society. A huge market that lies untapped is the developing countries wherein an economic version of the battery cars with few modifications to create economy can benefit the company with a huge market share. This may in turn result in the increase in volume and hence gross revenue of the company. 2.
National Oilwell Varco National Oilwell Varco reported its fourth quarter and full year 2015 results on 3rd February. The company’s fourth quarter net income was $ 85 million, or $ 0.23 per fully diluted share, excluding other items that included pre-tax charges of $ 1,634 million for goodwill and other intangible asset write-downs, $ 139 million for restructuring and other charges and $ 7 million in FX losses due to currency devaluation in Argentina. The net income was down from $ 0.61 in the third quarter of 2015 on a comparable basis. The company’s gross margin declined 210 basis points to 19.1 %. EBITDA was $ 308 million or 11.3 % of sales.
Comparable company: Selection is based on business nature, geography and financial conditions. 2. Ration selection: P/E and P/B are both commonly used in relative valuation. Price refers to last price on 27/4/2015. Earning refers to trailing 12 month net profit as of 31/12/2015 and book value is based on equity book value on 31/12/2015.
Book Value per Share The book value per share is one ratio that investors can use to determine whether a share is undervalued. However this metric should not be used by itself as it only presents a very limited view of the company’s situation. The book value is a representation of the company’s current situation but the future of the company is not considered. (Investopedia, 2009) For example, a company’s share price might be lower than the book value per share leading one to believe that the share is undervalued but in reality opportunities to grow the company is very limited. The book value is essentially an accounting value.
Using this method, the cash flows are only projected for the expected remaining life of the software project (usually ±5 years). The evaluator determines the discount rate reflecting the risk of attaining the projected results, as well as other more general risks. NPV is an approach used in capital budgeting where the present value of cash inflows is subtracted by the present value of cash outflows. It measures the profitability of a project by comparing the value of money today to its future value, taking inflation and returns into account. NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.
This is in line with the results indicated in Table 4.16 where majority of the respondents firm invested insignificant amount in R&D. 75.82% of the respondents firm spend between 1 to 50000 yuan on R&D while only 7.69% firms spent above 1 million yuan per year in R&D. Study also shown that 9 out 100 SMEs did not invest on R&D at all. As shown in Table 4.17, most SMEs did not spend significant amount of resources on R&D, so the percentage of R&D cost in company yearly expenses is relatively small (5% and below). Only five firms spent above 11% on their total expenses on R&D cost.
Explain concept of financial intermediation. How does the possibility of financial intermediation increase the efficiency of the financial systems? Financial intermediation is the process by which financial institutions mediate unmatched preferences of borrowers which are Deficit Units and lenders which are Surplus Unit. The Financial intermediaries buy financial claim from a deficit unit and issue the liability to different Surplus Unit, it increases amount of participants
To understand the Stock Markets changes. To analyze the relationship between stock market and exchange market Hypothesis to be tested H0: There is no significant relation between stock prices and exchange rates H1: There is significant relation between stock prices and exchange rates METHODOLOGY The data collected for the research purpose are secondary data. The data collected are daily historical stock price for five years of the BSE100 index and daily historical exchange rate of INR &USD. The period tested was from April 2010 to March 2015. Daily data are preferred in this study.
(1994) recently published a Meta –analysis of the impact of strategic planning on financial performance omitted a major study of corporate planning in fortune five hundred manufacturing firms. This article briefly reviewed that study in the light of the result of the Meta– analysis. Additional analysis examined performance and firms’ survival over a longer time period than in the original book. The over all conclusions were that a small but positive relationship between strategic planning and performance existed and persisted. China Rao N. and Rao.