Stock analysis Bank Of America Corp

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Question “ Stock “

Report 1

StockNo of sharesShare PriceTotal Value1.Aetrium inc 709 5.59 3963

2. Bank of American Corp 113944916.50 18800908

Explanation

1.Aetrium co

This co has a very low market value as compared to the other co , this means that the co is not operating up to the mark as identified by the stock exchange market , this means that the co may not be well renowned as compared to the other co’s listed on the stock exchange , Its market cap is $7 million , this also means that the co has not very much market share as compared to the other co’s listed on the stock exchange. The market of this co is not as good as the other co’s operating in that segment. This may be due to the fact that the co may be newly established so it needs time to be renowned in the market like the other co’s and to obtain a good repute in the market. It has an EPS of -2.70 , this means that the co is not good in paying their shareholders to the interest payments that they are entitled too , the co has a very low market share so the EPS should be negative because it is very linked to the market of the co in which the co is operating. The EPS of this co is also not good as compared to the industry average , negative EPS means that the co is not operating according to the expectations of its shareholders and not giving them the right return they wanted.

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2. Bank of American CorpThe bank of American Corp has a very good market share as compared to the other co , it has got a very good worth in the market as well as the co is operating pretty well that is the reason that the co has got repute in the market so they capture most of the market share of the co , that is the reason their stock price is also very high as compared to the other co’s operating in that market , the co’s shareholders will be very satisfied with the performance of the co , because the co is generating very good returns for the shareholders to the investment that they invested in the co . It has market capital of $176 billion , this is a very big amount as compared to the other co’s operating in that market , the co has captured most of the market by the type of market share they had already , this means that the co is operating very well for the betterment of their shareholders. The P/E ratio of the co is 19.10 , this also means that the co’s share price is also very good if purchased in the market as well as many more shareholders are interested in investing in that co so that their wealth can be maximized . The current position of the co is very good at the moment .so the successfulness of this co are very high as compared to the other co’s operating in that market. Many new shareholders will be interested in that co for the investment they had to make. The current position of the co is good according to the industry average because its P/E ratio is almost double than the industry benchmark and the co has very much share capital than the other co’s operating in that industry , so the investment in this co will be worthwhile for the new shareholders who are interested to invest in that co.

Report 2

StockNo of shares Share value Total value

1.Mcdonald’s166266 99.8416600000

Corporation

2.Appleinc (AAPL)8912059 567.77 5060000000

Explaination

1.Mcdonald’s corporation

This co has a very good market share and the share price of the co is also very good as compared to the co’s in the industry average in which the co is operating , currently the share value of the co is $99.84 which is comparatively very high as compared to the industry average , The P/E ratio of the co is 18.12 which means that the co is paying its shareholders the good return they want from their investment , the industry average P/E ratio is 14 so the co is having a very good and more P/E ratio than the industry average , the co’s share are getting more popular in the industry in which the co is operating , The dividend yield of the co is 3.27% which is also good as compared to the industry average , by dividend yield we mean that how much the co is paying to their shareholders the return on the investment they had made in the co , the ratio is quite good means it is paying a good return to their share holders for the investment they had made in the co , the current ratio of the co is 1.59 and the quick ratio of the co is 1.55 which are also high as to the industry benchmark , the industry benchmark for current ratio in the industry is between 1 to 2 and for quick ratio the benchmark is less than 1 so the overall performance of the co is very good.

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2.AppleInc (AAPL)

This co has a very much market capital than the other co’s operating in the industry , its share price is also very high then all the co’s operating in that industry in which this co is operating , its P?E ratio is 14.11 which is also very good as compared to the industry average , the ROE of the co is 28% which is very high as compared to the industry standards , by return on equity (ROE) we mean the return that the equity holders are earning from the co , the ratio is very good means the co is paying a very good return to their equity holders on the level of investment they had made ,the return on assets is 14% means the co is generating a very good return on their assets as compared to the industry average , the industry average ROA is 11% means the co is gaining a good return over the assets they are utilizing in the co, so the overall performance of the co is very good as compared to the industry average in which the co is operating.

Report 3

StockNo of sharesShare valueTotal value

1.Pepsico Co (PEP)29232985.5225000000

2.CME Group Inc1916470.91 1358728

Explaination

1.Pesico co (PEP)

The Pepsico co is also a very good co as compared to the market value it had gained in the market , the co’s share price is also very good as compared to the industry average in which the co is operating , Its P?E ratio is 19.35% which is also very high as compared to the industry average in which the co is operating , the industry benchmark for P?E ratio in which this co is operating is 13% so the co is already having a P/E ratio of more than the industry average , The dividend yield of the co is 2.66% which is also good as compared to the industry average in which the co is operating , dividend yield is the amount of dividend the co is paying to its shareholders for the investment they had made in the co , the current ratio of the co is 1.24 means the co has more cash to pay off its immediate debts and payables if the co has to pay on the spot , the quick ratio of the co is 1.05 which is also more than the industry benchmark so the overall performance of the co is very good as compared to the industry average in which the co is operating.

2.CME Group Inc

This co is normal as compared to the industry average in which the co is operating , the co has normal not good share capital in the market in which this co is operating , the share price of the co is also normal as compared to the other co’s operating in that industry , the P/E ratio of the co is 24.51 which is very good as compared to the industry average , this means that the co is having a good market value of their shares in which the co is operating , the ROE ratio of the co is 4.59 which is below than the market average in which the co is operating , the current ROE ratio in the industry averagely is 8 so the co is operating well below than the industry average in which the co is operating , the return on invested capital is 4.18 which is also very low as compared to the industry average in which the co is operating , the return on capital invested is the ratio which means that how much the return the investor is gaining on the investment he made in that co , this ratio is very low as compared to the industry benchmark which is 8.5 so the overall performance of this co is not good as compared to the other co’s operating in that industry.

Report 4

Stock No of sharesShare value Total value

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1.Morningstar Group 16490006.1210091880

(MTN)

2.UnitedHealth Group 1312000 8.24 10810880

(UNH)

Explaination

1.Mrningstar group (MTN)

This co has a very low market value than the other co’s operating in that industry , the share price of this co is also very low as compared to the other co’s operating in that industry , the ROE ratio of this co is 11.70% which is normal as compared to the industry average , the ROE ratio is the ratio that defines the amount of return the investor is gaining from the investment he has made in the co , the return on assets (ROA) ratio of the co is 6.94% which is very low as compared to the industry average in which the co is operating , ROA ratio defines the level of return or sales the co is generating from the assets they had in the co that are being utilized for that level of sales , the co should utilize its assets properly so that the level of return they can generate from these assets can be maximized. The current ratio of the co is 0.86 which is also low than industry benchmark , the industry benchmark for the current ratio is 1 to 2 so the co will not be able to pay its short term payables immediately if the co has to pay them immediately , the quick ratio of the co is 0.79 which is also low than the industry benchmark , so the overall performance of the co is well below the industry benchmark in which the co is operating so no investment should be made in that co.

2.UnitedHealth Group (UNH)

This co has got a good market share than the other co’s operating in that industry , its share value is not so good as the other co’s operating in that industry , The ROE is 32.65% which is very good as compared to the industry average in which the co is operating , the co is giving a very good return to its investors over the investment they had made in the co , the ROA ratio of the co is 11.37% which is also good as compared to the industry average means the co is generating more return over its assets that are being utilized to earn more then the expected sales for the co , the current ratio of the co is 0.73 and the quick ratio of the co is 0.48 , these both ratios are very low as compared to the industry average means the co cannot pay off its short term debt if immediately repayable on demand so we can say that the overall performance of this co is not good, this can be improved if management take strict actions to improve its ratios.

Report 5

Learning from this assignment

The learning’s from this assignment are very good because this has enabled me to analyze the financial position of the co very much , by the help of financial ratios of different co’s I have analyzed the position of the different co’s , in analysis I have analyzed the co’s different ratio’s like the profitability ratio’s e.g. ROE ratio , ROA ratio etc. I had also be able to analyze the different co’s efficiency ratio’s e.g. Current and quick ratios of different co’s so that the efficiency of a certain co can be analyzed more good, I have also been able to analyze the P/E ratio of different co’s so that the price of a co’s shares that is in the market can be analyzed more effectively.

The analysis of these co’s also emphisizes the fact that the co’s are operating according to the industry average or not , if they are not operating according to the industry average or the benchmarks that are set by the industry than the co’s should improve its ratios more effectively so that there profit margin can be increased and the co’s ability to continue as a going concern may well be established.

The important ratios that analyze the co’s ability to contiue as a going concern are the profitability ratios like the current ratio , quick ratio , the debtors turnover days , the creditor turnover days and the inventory days , the debtor turnover days and the inventory days should be mimimal so that the operating lif cycle of the co can be decresed and this cycle can also be decreased if the co may take longer the days of its payables but up to the extent that the co’s relations with the supplier may not harm.

The co’s should also make proper cash payments on time so the creditors may not be dissatisfied with the co’s performance and the future prospects of the co can be increased if the co’s relationships with its creditors are good, the co’s goodwill may also well be increased if the payments to its creditors are on time and the creditors are very happy with the payment routine of the co so they may grant more credit period to the co if the co make its payments on time , the co’s sholud always pay special attention towards its creditors so that the co’s goodwill can be increased in the market so as the share price of the co can be increased in the market.

The co shold also not allow more time for its debtors to pay off their payment to the co , if the time towards the debtors is increased then the co may well face cash flow problems , and if the cash position of a co can be decreased than the co’s chances to continue as a going concern may well be decreased.

The co’s should also minimize the time for the inventory to be in the warehouse so the inventory loss can be minimized to a certain amount , if the inventory is kept more time in the ware house then their may chances of inventory theft so the loss on inventory is high if it is put more time in the warehouse , the inventory should not be put more time in the warehouse and should be sold immidiately when it is made in the warehouse so that the level of revenue for the co can be increased , and if the level of revenue for the co can be increased then there are many more chances of the co;s ability to continue as going concern because the profit margins of the the co will be very high if the produsct is sold on time when it is made because if the produst when made is sold is of more value because it is fresh and the amrket will pay a high rate for the new and fresh products.

The co should also use all the resources where the wealth of the co and its shareholders can be maximized , if the wealth of the shareholders of the co can be maximizes then there are more chances of the co’s ability to continue as a going concern. This is due to the fact if the shareholders are satisfied with the performance of the co they will be ready to make always new investments in the co when the co most needs of that investment,

If the investment is made on time than there are more chances of the co’s success because the co will have many cash resources , s xash is the lifeblood of a business and the co has sufficient cash than the co will automatically achieve what it had to achieve to become a successful co in the industry in which the co is operating.

On the whole we can say that the financial position of a co is very much dependent on the cash position of a co and how the co is utilizing that cash to maximize the wealth of its shareholders, if the co is utilizing the cash more effectively then the co’s chances to become successful and to continue as a going concern may well be increased.

The overall position of a co is very much also dependent on how the co’s directors are operating the co , if they are operating well then the chances of the co’s success will also increase by the proprotion of the efforts of the directors of a co.

The financial analysis of different co’s is very important to judge the operating effectiveness of different co’s in a industry so the shareholders can know which is the better co to invest in and whose co’s success chances are high as compared to the industry average.