Introduction
To find out the better solution to buy the bookshop, Fancy Folios Pty Ltd or the coffee shop, Cup Hand Pty Ltd, we make a considerate selection by the whole process: gathering the right information, analyzing the ratios extensively, evaluating the alternatives and finally we determine to invest in Fancy Folios Pty Ltd. Now we would like to reveal the particular process in two steps.
Firstly, we analyze the present and likely future positions under the macro and task environmental analysis. They can be deduced by the internal situations analysis, namely ratio analysis. What we can need is set in the major assignment part A. At the same time, we have known the relevant expenses, dividend information for the two businesses. Secondly, we analyze the investing objective and the likelihood of achieving it, evaluate the two choices and opt ultimately after the study of all kinds of ratios real meanings, classification of the data and interpretation in the industry views.
Plot of S&P Composite Real Price-Earnings Ratio an...
Price-Earnings ratios as a predictor of twenty-yea...
English: Internal rate of return Svenska: InternrÃ...Whatever we consider the advantages of profitability, liquidity or financial stability, Fancy Folios Pty Ltd exceed Cup Hand Pty Ltd. What we can advice for Jayne Jones is investing in Fancy Folios Pty Ltd! The deductions is showed as below:
Profitability Interpretation
Profitability Summary
2001 2002
Fancy
Folios Pty
Ltd Cup
Hands Pty Ltd Fancy
Folios Pty
td Cup
Hands Pty
Ltd
Rate of return on total asset 50.6 % 45.5 % 53.8 % 41.0 %
Rate of return on
Shareholders' equity 49.1 % 42.6 % 47.7 % 39.0 %
Profit margin 9.1 % 8.9 % 8.8 % 8.9 %
Gross profit margin 33.3 % 61.5 % 31.7 % 61.5 %
Earnings per share 1.06 C 0.74 C 1.21 C 0.75 C
Price-earnings ratio 94.1 % 136 % 82.5 % 133 %
Earnings yield 106.3 % 73.8 % 121.3...