Evaluate economic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions.
Compare market conditions with the company’s performance for 2017. Conclude how the market conditions that year influenced the company’s performance, such as interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected.
Analyze year-over-year performance between 2016 and 2017. Consider key metrics or ratios such as trailing PE ratio, forward PE ratio, price to book, return on assets, and return on equity in your conclusions.
Cite references to support your assignment.
Discussion questions
answer in 150 words each
Nadirah Madyun
In evaluating the performance of a company, the return on assets can show where a company stands financially. Return on assets shows if a business is making more or less profits on their investments, if the ROA is high. Generally, return on assets 5% or over are considered great. Price to earnings ratios will show what price market is paying currently for a stock on the basis of its current and future earnings. Return on assets also give a company insight on how well and efficient the company is at managing its assets to generate income. Return on assets is calculated by dividing total net income over total average assets. Price to earnings ratio is calculated by dividing price over earnings. After calculations for price to earnings ratio are completed and show higher earnings, it will show the capability of a company to disperse higher future dividends and appreciation in stocks. I choose to share the ROA for Publix, as of September 2020, which is 14.42% and a PE ratio of 5.45, which shows a positive and successful financial health of the company.
CARLA HUSEMAN
ROA is useful for investors as a financial ratio. This compares different companies on management performance and uses of their assets. The reference is over multiple time periods and the use of assets to generate income. Using the balance sheet and income statements, you will see the ROA as an indicator of value. ROA compares net profits to total assets. ROA=Net Profits \ Total Assets. A higher ROA is normally better than a low ROA. AT&T's ROA in Sept 2020 was @2% but going into 2021 is at -1% which is not a good ROA. This company is working on a higher ROA for 2021 by selling off its lower profitably work.
A good PE ratio is a simply way to assess whether a stock is over or under valued. AT&T's PE ratio is at 9.43. This helps investors determine if the stock is a good investment. PE ratio is determined by price per share \ earnings per share. Comparing a like industry company, Verizon is at 11.35 PE. PE is a a good idea but it is something you should not zero in on when looking to invest.
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