Feu Investment Decision Essay

262 WordsOct 14, 20142 Pages
VI. Investment Decision The above graph shows the market share prices of FEU in the past 6 months. As it can be observed, the prices have been relatively stable yet have certain spikes or sudden increases and returns to the average price. Stable prices show that the company is stable as well. FEU also boasts very good ratios. Its current ratio amounted to 5.88 in 2013, meaning its current assets can pay for its current liabilities almost six-fold. All of its solvency ratios are in good shape – they are all low meaning debt in FEU is low and thus, not is not as risky to invest in. Its debt-to-equity and debt-to-assets average (in 2012 and 2013) only around 18.5% and 16.5%, respectively. Aside from this, its profitability ratios are high. It has a net profit margin of 41% in 2013, meaning it earns 41% of all of its revenues. The institution also pays dividends. These dividends amounted to P12 per share in 2012 and P15 per share in 2013. With all the information above, our investment decision for FEU is that it is a good investment for those who wish to invest in safe and long-term shares especially if dividends are to be considered. Aside from this, FEU shares can be used as safe short-term investments if timing is right. An investor will need to go short or sell stocks at the peak of spikes while going long or buying stocks when the prices go back to its average stable
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