A Financial Analysis Assignment Of Comcast Corporation (Case Study Sample)

BUSINESS
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Financial Analysis
Stock Prices
Comcast Corporation is an American telecommunication business conglomerate. The major services offered by the company include broadcasting, Internet, and cable television network (Annual Report, 2016). The stock price of Comcast Corporation as of 22nd September 2017 was USD 38.10. In 2016, the average stock of the company sold at USD 27.33. Two years ago, 2015, the stock price was USD 28.21. On the basis of this analysis, the annual stock price has been on an increase. This is from USD 28.21 in 2015 to the current USD 38.10. However, the price dropped in 2016, selling at USD 27.33. Comcast trades as a public company registered in NASDAQ under the symbol CMCSA.
Profitability
For the year ended 2016, Comcast Corporation had US$8.695 billion in net income. This was an increase from US$8.163 billion which was posted in the previous year 2015. The net increase between the two years was US$532 million which was a 6.52% in percentage. The revenue related to the year 2016 and 2015 was US$80.403 billion and US$74.510 billion respectively. The percentage increase in revenue for the two consecutive years was 7.91%. There was an increase in revenue for the two financial years 2015 and 2016. The profitability of the company based on the reported net income was also an increase (Annual Report, 2016).
Efficiency
Profitability ratios can be used to assess how well the company uses its resources to generate profits. The resources of the company include the invested capital and the shareholder's equity. Return on Assets, the return on equity and profit margins are the key indicators of the company’s efficiency in generating profits from its resource base (Rich & Jones, 2017, p.672). Profit margin as a percentage show how well the company is able to gain from its revenue. It is calculated by taking the net income divided by the revenue. Comcast Corporation had US$8.163 billion in net profit and US$80.403 billion. The profit margin, therefore, was 10.15%.
The profit margin in the previous year 2015 obtained by dividing the net income of US$8.163 by revenue of US$74.510 was 10.95%. The return on asset is a profitability measure which is related the net income to the total assets. For the year ended 2016, the company had a net income of US$8.695 billion and US$180.500 billion total assets. The return on the asset as a ratio was 0.05. Similarly, in 2015 Comcast Corporation had US$8.163 billion in net profit and US$166.574 billion in the value of the total assets giving a ratio of 0.05. Based on the two profitability measures, it can be concluded that the company is stable in its earnings (Tracy, 2012).
Industry Trends
Telecommunication industry is growing with the uptick in internet connectivity. The mass media business has grown over the years from the print media to the modern social media platforms. As the leading internet service provider in the US market, Comcast Corporation will see increasing business opportunities in the telecommunication sector. The forecast for the future of Comcast Corporation is that the internet business is going to see more sustained growth. It is recommended in this research that the company continue to forge strategic business opportunities in order to gain a competitive advantage. This can be improved through mergers and acquisitions or joint ventures in the telecommunication industry.
Conclusion
What can be learned from the company is that a positive financial performance is reflected in the stock market prices. Investors are likely to invest in a company which is showing positive earnings and sta...