Question

Directions: Answer the following questions on a separate document. Explain how you reached the answer, or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link above.

A. In your own words, please identify two different stock exchanges in the United States. Describe the similarities and differences between the two stock exchanges. Identify one stock from each of the two stock exchanges.

B. Using the two stocks you identified, determine the free cash flow from 2013 & 2014. What inference can you draw from the companies’ free cash flow?

C. Using the most recent financial statements for both stocks, prepare two financial ratios for each of the following categories: liquidity ratios, asset management ratios, and profitability ratios. You should have a total of six ratios for each stock, per year. What challenges, strengths, or weaknesses do you see? Please be articulate.

Answer 1

The two different stock exchange in united states NASDAQ AND NYSE

The New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ) are both well known in the trading sector for providing high-end stock trading platforms. Both these stock-exchange giants are well-known and famous as majority of the North American equities trade either on NYSE or Nasdaq. Companies going public have to decide where they want to list their shares.

I will tell you the differences and similarities between NASDAQ and the NYSE. There are many differences and also similarities.

   First, they are both major stock exchanges inAmericaand inEurope. They are both involved with equity exchangers and attempt to match buyers with sellers or supply with demand. The companies on NYSE are more stable than the companies on NASDAQ. You can order stocks over the phone.

   NYSE tends to have higher listing requirements. It is considered an auction market, and is order driven. The trades happen on a physical trading floor. Stocks in the NYSE only have one specialist. The specialist is responsible for matching the highest bid with the lowest selling price.

NASDAQ, however, tends to have lower listing requirements, and is considered a dealer’s market. It is quote driven. Trading happens either online or over the phone. The market maker is responsible over controlling the trades.

Even though NASDAQ and NYSE are the major stock exchanges in North America and inEurope, they still have lots of differences. They allow companies to sell stocks to raise money that companies need. In that way, they are alike.

NYSE	NASDAQ
The company must have issued a minimum of 1,100,000 shares to 400 shareholders at least.	The company must have publicly traded at least 1,250,000 shares, with a minimum bid price of $4.
The market value of the company’s public shares must be a minimum of $40 million, with $4 being the minimum share price.	The company must have a minimum of three dealers for its stocks.
For the past three years, the company’s pre-tax aggregate should be $10 million, with the last year having $2 million.	For the past three years, the company’s pre-tax aggregate should be $11 million, with the last year having $2.2 million.
The entry fee for a company to be listed on the NYSE goes up to $250,000.	The entry fee for a company to be listed on the NASDAQ is from $50,000 to $75,000.
The NYSE collects a maximum yearly fee of $500,000.	The NASDAQ collects a yearly fee of around $27,000.

Both these stock exchanges profit greatly from listing fees. To give you a general ideal of how profitable listing fees are, consider that in 2011, 22% of the NASDAQ’s total revenue came from listing fees and other such corporate services. For the NYSE, listing fees made up 17% of their revenues in the same year.

HERE I AM SELECTING THE STOCK AMAZON FROM NASDAQ AND WALLMART FROM NYSE

NET CASH FLOW FOR AMAZON IS

$1,333,000

$5,899,000

  AMAZON COMPANY FINANCIAL RATIOS

CURRENT RATIO IS 104% QUICK RATIOS IS 76% GROSS PROFIT RATIO 37% OPERATING PROFIT RATIO IS 2%   

WALL MART FINANCIAL RATIOS