Ratio | Formula | Amaon 2013 | eBay 2013 | Debt Ratio | TL/TA | | | In leverage ratio, I choose debt ratio, eBay is 24.6% while Amazon is 54.8%. In this ratio, eBay is lower than Amazon which means eBay has less debt should to pay than Amazon. EBay’s assets are financed more through equity than debt compare to Amazon, illustrated that eBay has a lower risk in operation. In addition, eBay may have more borrowing capacity and financial flexible to enlarge its business than Amazon. Let’s see some profitability ratio to have some in-depth discussion.
Since PacifiCorp is not a publicly traded company, we must use valuation multiples from comparable firms to determine the value of the firm. As you can see in Exhibit 1, if we use the valuation multiples we arrive at an implied firm value of between $6,252 million (low end) and $9,289 million (high end). This means that our offer of $9.4 billion is right in line with the high end valuation of the company. We also used multiples to determine that the market value of equity was worth between $4,277 million and $5,904 million (see Exhibit 1). As stated earlier, we offered to pay $5.1 billion for the equity portion of the company.
Also, an applicant with a score of 680 range is an individual that is thriving to improve their FICO score. I believe his FICO score could have been somewhat higher for the amount that he wanted to borrow but his score is not considered a high risk or does it represents an individual that will default on the loan. Mr. Blankenship was late in the past twelve months and has been late in past six months with the mortgage. I believe that other obligations may have been a little high considering his annual income (TDS); therefore, will affect his payments (GDS) but overall he has the ability and the willingness to make the payments without experiencing default on the loan. Are you concerned about the payments that have
I felt that the book value of debt was still a reliable number. Adding the MV of equity and BV of debt together (11,427 + 1,296) then using that as the base to divide the equity (11427/(11427+1296))=89.81% is the weight of equity. 100-89.81 leads to a weight of debt of 10.19. When it came to calculating the cost of debt I felt the best way to evaluate it would be to estimate what it would cost for Nike to issue more debt from this point in time forward. I did not have information as to whether or not they could get more Japanese debt so cheaply, and the fact that their cost of debt under Joanna is less than the risk free rate does not make any sense.
We miss essential information like the interest rate and maturity of the debt to calculate the market value of debt. From the book value of debt and the interest expenses over 2007 we estimate the cost of debt: 2,26/43,08 = 5,25 %. This is 0.7% more than the risk free rate. This seems reasonable when considering the low leverage ratio of the firm and high cash reserves of the firm, on the other side the interest coverage ratio of Tottenham of 1,24 is pretty low. We assume that the amount of debt has been constant over 2007.
Team C Naomi Merrifield University of Phoenix Fin/370 James Zerbonia November, 28, 2011 The current ratio for Amazon.com illustrates in 2009 1.33 and in 2010 it remained 1.33, this means that the corporate remained balanced and showed strength. If Amazon.com was to reach 2.0 or 2X means that the company has a shot term financial. The current ratio can explain how Amazon.com has the ability to pay back its short term liabilities with the short term assets. In 2009 and 2010 the company is above average which allows Amazon.com to pay off any obligations all though not too much of a gain staying at the current ratio. The debt ratio in 2009 for Amazon.com is 1.63 and in 2010 it increased to 1.74.
A strong credit rating will not be quite as critical for leasing as it would be for buying. This may be a big concern for start-ups and small businesses. · Tax deductions. Your monthly lease payment is tax deductible because it's a business expense. The business can usually deduct the full cost of lease rentals from taxable income · Freedom.
Hence the tagline “Always Low Prices “ Sears on the other hand does not follow a policy of discounts. Their main strategy lies in updating their merchandise section and offering flexibility in paying for the merchandise gradually over time, especially through their proprietary credit cards. • Store Size and Store Revenue: Total retail area is higher for Wal-Mart at 313,217,355 sq. ft as compared to Sears at 92,700,000 sq. ft and the revenue generated per sq feet is higher for WalMart at $348.49 per Sq.
In total, Overstock.com earned $1.05 billion in revenue for FY 2010 which was an increase of 23.4% from the previous year. In terms of liquidity, the company has $12.66 million in operating cash flow. The composition of net sales is approximately 18.4% for the Direct Segment and 80.8% of net sales for Fulfillment Partner Business. The direct segment refers to sales directly to individual consumers from certain offline channels and Overstock.com’s leased warehouses, where purchased surplus inventory is stored and re-sold at a premium on the website. The Fulfillment Partner Business segment refers a 3rd party liaison between customers in search of low prices and retailers & manufacturers that are looking to liquidate.
From its balance sheet it’s clear that the company is able to put its liabilities in check hence it has no gearing and liquidity problems. Through it cash flows one is able to derive the fact that the management has control over its cash spending. Ratio Analysis The return on invested capital ratio (ROIC) in the current year is lower than the cost of capital this shows that there is a decline in the production of wealth through the invested capital. Though there has been a consistent growth of the ROIC, this shows an increase in the company’s wealth. The book value per share of Alamo group is lower than its market share showing that the shares are overvalued.