Sign In
Not register? Register Now!
You are here: HomeCourseworkBusiness & Marketing
2 pages/≈550 words
3 Sources
Business & Marketing
English (U.S.)
MS Word
Total cost:
$ 10.37

Assessing Company Performance (Coursework Sample)

The task required assessment of specific financial metrics. To this regard, I chose to assess price-to-earnings ratio and price-to-sale ratios. The task incorporated some background statistics about five fictitious rival companies in the financial market. The evaluation, leading to relevant deductions about the firm's performance required elaboration of how companies assess these metrics. as evidenced by the calculations in the paper. I started by providing an overview of these metrics, including their significance in strategic business operations. source..
Assessing Company Performance Student's Name Institutional Affiliation Course Instructor Date Assessing Company Performance Financial Measure and Meaning to Firm The market valuation ratio is one of the key financial measures that the company could use in assessing its financial strengths. This metric refers to the set of financial metrics that companies rely on to provide insights into how the market values a specific stock. The financial measure is also essential in evaluating a company's performance, especially considering how it underscores whether a stock is overvalued, undervalued, or fairly priced. Based on this information, they determine the level of investment they could pump into company projects (Fernandez, 2019). Several market valuation ratios can guide investors in assessing the performance aspect. First, the price-to-earnings ratio is essential in comparing the company's stock price to earnings per share. In this assessment, a valuation revealing a high price-to-earning ratio is indicative that investors are willing to pay a premium for the company's profits (Hirdinis, 2019). Thus, this indicator aspect is associated with high growth expectations. Besides the price-to-earnings ratio, another essential market valuation ratio is the price-to-sales, which measures the company stock price based on its relation to the revenue per share. The formula for calculating the market valuation ratios is as follows. Price to Earnings (P/E) Ratio: Stock price/earnings per share. Price to Sales (P/S) Ratio: Stock Price/Revenue Per Share Comparing the Performance Measure to the Industry's Average In assessing the market valuation ratios, the fundamental goal is determining whether the company's stock is trading at a premium or a discount relative to the industry average. Based on the data provided for Andrews, Baldwin, Chester, Digby, Erie, and Ferris, the first step of evaluating the market valuation ratio is determining the market cap and the EBTI. Based on the data provided on the Baldwin, comprising a market cap of 87 million and EBTI of $19 million. Using the formula P/E Ratio =Market CapEBTI P/E Ratio=8719 = 4.57. The rest of the companies' P/E ratios were 6.69. 5.32. 5.87. Based on this formula, to assess this market valuation ratio against the industry's average, the strategy is to calculate the P/E ratios for the rest of the companies, which will be assessed as Industry Average P/E Ratio= Sum of IndividualPERatiosNumber of Companies. Therefore, based on this formula, 4.57+6.69+5.32+5.87+5.396= 3.75. Based on this comparison, it is notable that the company's average is higher than the industry's and, thus, could be considered attractive to investors. Customer Buying Criterion and Company's Relative Position The customer buying criteria, comprising the key factors or requirements that influence a customer's decision-making process, is an essential part of the company's strategic decisions. One of the criteria listed is prices, considering that the cost of products and services is one of the fundamental aspects infl...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:

Other Topics:

  • How Businesses Communicate With Their Employees
    Description: The company chosen for organizational communication and message delivery is Tesla Incorporation. The principal business line of the organization is to manufacture and deliver electric vehicles and energy renewables. In an article published by Inc.'s Justin, the CEO of Tesla- Elon Musk, sent an email to ...
    2 pages/≈550 words| 3 Sources | APA | Business & Marketing | Coursework |
  • Personal and Real Properties, Bailments, and Transfer of Ownership
    Description: Explain the difference between Personal Property versus Real Property. Personal property is a property that can be moved easily and cannot be linked to real property. The property can be acquired through possession, as a gift, as donative intent, or through production activities (Miller, 2022). Real ...
    1 page/≈550 words| 2 Sources | APA | Business & Marketing | Coursework |
  • SPT 600 Final Milestone
    Description: SPT 600 Final Milestone Business & Marketing Coursework...
    4 pages/≈1100 words| 6 Sources | APA | Business & Marketing | Coursework |
Need a Custom Essay Written?
First time 15% Discount!