A low turnover implies excess inventory, a high ratio shows good sales. High inventory levels are unhealthy because they represent an investment with a rate of return of zero. In the case of copper mining there is a unlikelihood of a high ratio for inventory turnover because as it’s mined it goes out the door. The industry average is 41.66day for inventory turnover, Newmont is a faster turnover at 21 Days and Freeport is slightly longer at 52days. In the case of this industry specifically the faster they are able to turn over inventory the more money the company is able to free up allowing for a better working capital for the
PE ratio fell as a result of the leverage. Stock price remained constant at $16.25 and EPS, as noted before, increased from $0.91 to $1.04. PE, which is stock price divided by EPS, decreased from 17.89 to 15.62. This can be interpreted as investors are willing to pay less for Blaine. The final financial metric to look at is WACC.
The 10% stake should be bought after the revenues and decision criteria figures become equal to or more than the industry averages, long term projections look good and market emotions become positive (Agar, 2005). Recommendations Recommendation 1: Since long term solvency position of OHG and Marriot international are not good, long term investments should not be done in either of these companies. Recommendation 2: Since short term solvency position of IHG is comparatively better than that of Marriott international, short term investments can be done in IHG. Recommendation 3: Since revenue, gross profit margin, net profit margin and operating profit margins are lower than the industry average, long term historical growth and projections are not up to the mark, competitive pressures are high and market emotions are low, IHG should not buy 10% stake of Marriot International rather should continue to monitor its performance and wait for favourable market conditions to
Prices are not distorted as people speculate for example with houses. Price inflation does have some negative effects on households. Firstly, inflation erodes purchasing power of savings. This means the purchasing power of your dollar goes down and services go up, as your savings buy less goods and services than they did before. It affects the distribution of real income, people on fixed incomes suffer as the purchasing power of their incomes decrease as price levels rise.
4. Finance Perspectives: 4.1 Evaluation between Hydraulic Fracturing and Oil Drilling: 4.1.1 Cost Saving: The conventional oil drilling technique is much better from the oil fracking technique in terms of cost of production, as the cost of production of one barrel of oil via oil fracking technique is nearly 70-85 USD per barrel, on the other hand, the cost of conventional oil production estimated to be about 3-6 USD per barrel and even less than that in some cases. According to the Petroleum Policies and Strategic Outlook Center report that the oil fracking boom is just illusions where it is certain assured that dealing with oil fracking is facing technical difficulties that make it very high in production cost compared with the conventional oil drilling. In addition, the efficiency of oil fracking production is very low which is up to 5% at best
The closing price of BUD was 128.27 on April 24, 2016. However, I believe it is undervalued, and I value the stock price to be $162.49. My recommendation is that BUD stocks should be bought by investors because the company`s dividend has a high average growth rate, the company has a higher cash flow per share than the market average and experiences high earnings per share (EPS) growth with a strong return
The article says, “While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.” (Stiglitz 2011) While the rich are getting higher incomes prices the poor are getting higher income by taking it from the one in the middle which therefore, makes them get a lower income percentage. America has fallen behind because of not being an equal country to the population by the income equality there is a huge gap between the income being earned by the poor and the rich. The rich are wealthy and the poor depend on the government for everything. As stated in the article, “America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran.
What is meant, when taking the 2011 as the casing point, in the BCX business for every R1 spent, BCX makes back R1.70 cents. 2.2.3 One of the further contributing factors for the low asset turnover is that, BCX as an integrator, also drives its business through commodity hardware and software sales, which are low margin whilst the costs of procuring are high and some of the Original Equipment Manufactures’ (OEM) terms of payment are not always favourable. 2.2.4 It is also possible that in the year 2011 BCX was overly invested in assets. This could also be attributed to the investment made for the 2010 World Cup that had not been flushed out the system and/or acquisitions not properly consolidated, for optimum profitability
In many mergers there are so much larger that even substantial net benefits would not show up clearly in the buyer’s share price. Suppose, for example that company A buys company B which is only one-tenth of A’s size. Suppose the dollar value of the net gain from the merger is split equally between company A and B. Each company’s shareholders receive the same dollar profit but B receives 10 times A’s percentage
The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay off its short-term liabilities with its current assets. In the year 2012, KHB had a current ratio of 1.688 but it comes to decrease in 2013 to a 1.642. The ratio in the year 2014 was 1.670 indicating a slight increase. The competitor of KHB, the PMMB had a current ratio of 4.785, 4.012 and 3.622 from the year 2012 to 2014 respectively. A current ratio should be more than 2.0 as a higher current ratio indicates a more promising current debt payments.
Show the profit per ounce as a function of the price of gold in one year for the two traders. Assuming ST is the price of gold in one year. Trader A makes a profit of ST ̶ 1000 and Trader B makes a profit of max (ST ̶ 1000, 0) –100. Trader A does better if the price is above $900, while trader B starts making actual profit above $1100, when the amount exceeds the price of gold plus premium. iv.