Sample Ratio Analysis

Topics: Financial ratios, Revenue, Generally Accepted Accounting Principles Pages: 4 (1287 words) Published: November 2, 2008
Valuation Ratios

Comparing all the companies we have here, we know the sector value is 6.15, and we can see that Costco is has the largest number with 28.59, meaning that this company has big growth, and it is not risky. Along the other companies, we know that Target, Walmart, and Home Depot are doing well too. In this same case Nordstrom and Macy’s are not doing so well, they are a little below average, so we can conclude they are not growing that fast, and they are tending to become a little risky.

Growth Rates

In our analysis we can see that companies that are doing better this year than last one are Costco, Target, and Walmart. They are as well above the average of the sector. The other companies such as Home Depot, Nordstrom, and Macy’s are below average, meaning they had fewer sales than last year.

We can see that Nordstrom and Target have 49 and 17 respectively compared to the sector of 15, making us understand that they have the most return of net income per share compared to the other companies and the whole sector. We can see that Home Depot, Costco, Walmart and Macy’s are below average. These companies haven’t reached the average of the industry, throughout 5 years. Probably they have to do some operational changes to grow at better rates.

Financial Strength

Compared to the industry sector as a whole, the only company that is able to pay with cash its short-term obligations would be Nordstrom. All the other companies would be having trouble with this case, and would require to sell inventory as an example, and would take longer to pay. This assumption is made only if the companies are compared to the industry sector; probably they are good in that situation seeing their own financial statements.

Nordstrom and Target are good compares to the industry sector. They have enough Current Assets to pay their Current Liabilities. Again, as in last analysis, we cannot infer that the other companies are bad because we are not seeing...
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