Locate one publicly traded corporation that you believe is maximizing shareholder wealth. Using financial ratio analysis, justify why you believe the corporation is maximizing shareholder wealth.
Locate one publicly traded corporation that you believe is not maximizing shareholder wealth. What is the market price of the stock of this corporation? How does it compare with the intrinsic value of the corporation? Justify why you believe the corporation is not maximizing shareholder wealth. Calculate and analyze the following thirteen financial ratios of the corporation and compare them to the appropriate industry average:
Current ratio Quick ratio Cash ratio Total debt ratio Times interest earned ratio Cash coverage ratio Inventory turnover ratio Receivables turnover ratio Profit margin Return on assets Return on equity Price-earnings ratio Market-to-book ratio
Create a plan of action to get the corporation back to where the corporation is maximizing shareholder wealth. What do you anticipate will be the market price of the corporation’s stock if the corporation successfully implements your plan of action?