Question

Visit the Microsoft Money website (topic material) and enter the name of a publicly traded company in the "Quote Search" box. When the company information comes up, choose the "Analysis" tab and review the statistics and ratios provided. What does this show you about the company in comparison to industry? Reference specific ratios or statistics in your analysis. When replying to the initial post, change the subject line to the title of the company you researched. Do not post on a company already chosen by a classmate.

Answer 1

SOLUTION:-

Steps Involved -

Step 1 - I opened micro-soft money website

Step 2 - I put company name in to quote box as ' reliance industries limited'

Step 3 - The company financial information page opened.

Step 4 - Click on 'Analysis' Tab.

Step 5 - Click on 'Key Statistics' Tab,The information given as

Step 6 - Click On Tab ' Price Rations' The information given as.

Step 7 - Analysis of comparison with industria for specific statistics and ratio as:

Statistics Analysis

(a) Revenue on capital % = 4.38

Comments- EBIT is calculated by subtracting the cost of goods sold and operating expenses from revenues. Capital employed is the total amount of capital that a company has utilized in order to generate profits. It is the sum of shareholder's equity and debt liabilities. It shows the earning on total capital employed. Above 4.38 shows company has positive earning on capital employed and company is utilized there capital resource in effective manner. As comparison to industrial, it s good to have such ratios.

(b) Net Profit Margin % = 6.86

Comments -The net profit margin, also know as net margin, indicates how much net income a company makes with total sales achived. A higher net profit margin means that a company is more efficient at converting sales into actual profit. Net profit margin analysis is not the same as gross profit margin. The above ratio 6.86 shows company positive profitability to sales turnover.

(c) PEG (Price/Earning Growth) Ratio = 1.70

Comments - The 'PEG ratio' (price/earnings to growth ratio ) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. The above 1.70 is positive. a low P/E ratio may make a stock look like a good buy. Its advisable to invest in the stock.

(d) Beta = 1.15

Comments - Beta is a statistical measure of the volatility of a stock versus the overall market. It's generally used as both a measure of systematic risk and a performance measure. The market is described as having a beta of 1. The above beta is higher than market risk. We can say the risk of company earning isslightly volatile in comparison to market risk or beta.

Rations Analysis

(a) Current P/E Ratio = 20.01

Comments - Generally, a high P/E ratio means that investors are anticipating higher growth in the future. The current average market P/E ratio is roughly 20 to 25 times earnings. Companies that are losing money do not have a P/E ratio.

(b) Price/Sales Ratio = 1.46

Comments - he price - to-sales ratio (Price/Sales or P/S) is calculated by taking a company's market capitalization ( the number of outstanding shares multiplied by the share price) and divide it by the company's total sales or revenue over the past 12 months. The lower the P/S ratio. the more attractive the  investment. From the above i.e 1.46, we can say that is advisable to invest in the stock.

(c) Price/Book Value = 2.05

Comments - The market price per share is simply the current stock price that the company is being traded at on the open market. The book value per share is a little more complicated. We first subtract the total liabilities from the total assets and divide the difference by the total number of shares outstanding on that date. From the above i.e 2.05, we can say that the market price of stock is two time higher than the book value.

Step 8 - Changing the subject line to Company Name as:

Reliance Industries Ltd

Notes-

1. The data are fetched from msn money.

2. Reliance limited data is analzed.

3. Reference is made only to important statistics and ratios rest are excluded.

4. currency is INR.

THANK YOU, if any queries please leave your valuable comment on comment box.......