JP Morgan Chase & Co. is a global financial services firm that operates as: Investment bank, Treasury and securities services, Commercial banking and Asset and wealth management. It also participates in Retail financial services and Card services.
In examining the company's Liquidity Ratios, the current ratio is 1.162, which means its Current Assets are slightly higher than its Current Liabilities, making it easier to liquidate since there are enough assets to pay away the liabilities if they need to. This is supported by the Working Capital of $153,484 Million dollars. However, compared to the industry's average Current Ratio of 1.5, JP Morgan Chase is not considerably high in liquidity. The company has significantly increased its Working Capital from 85,945 in 2003 to nearly double that amount in 2004, meaning that its Current Assets has been growing in a much faster speed then it's current liabilities, which is good for the company.
The Current Cash Debt Coverage Ratio is negative, but it is so close to zero it should be viewed as insignificant. However, it is clear that JP Morgan Chase lacks the ability to pay off all their short-term debts.
Because companies in the financial industry do not have inventories, we cannot calculate any Activity Ratios for them. However, a look in the Profitability Ratios gives us great insight of how the company is doing. The company has a Net Operation Margin Percentage of 0.710, showing that 71% of the company's Revenues are from Operating Activities. This number has been very stable in both years, decreasing only 0.01 from 0.720, showing that they have stable management procedures and considerable Operating Profits. Simply putting this ratio in consideration, it is desirable since they are stable in ratios while expanding.
Another Profitability Ratio, the Cash Return on Sales, has decreased a...