Using the perspective of an Equity investor, use the financial ratios to argue which one is the firm that offers the best investment opportunity? Price/SalesPrice/EarningsPrice/Cash FlowPrice/BookPrice/Forward EarningsPEG RatioEarnings Yield %Enterprise Value (Bil)Enterprise Value/EBITEnterprise Value/EBITDAReturn on Assets %Retun on Equity %Retun on Invested Capital %Operating Margin %Net Profit Margin %Payout Ratio %Home Depot2022Current S-Year Average2.072.0619.0419.6424.68 16.24248.01 235.6818.6920.451.642.015.255.09369.17361.3115.29 15.6013.63 13.76202223.072022Current 5-Year Average1.351.4019.23 21.0614.26 15.30321.8213.9316:891.02 1.435,204.75155.50 162.60137,2517.5312.6115.06 16.4513.7814.23TTM 5-Year AverageTTM 5-Year Average 202221.3318.4113.212050.28 2065.27655.2738.1635.5814.8810.4849.8115.2410.8744.302.2321.5919.40354.6021.082.374.71324.3016.8514.86Lowe's Companies22.423222.3014.4714.6910.3846.8313.50 29.5712.56 10.518.746.4785.7141.141.9823.1116.0959.5617.511.334.6112.38165.4619.179,896.3737.87Walmart2022Current 5-Year Average0.650.7043.6331.4216.55 11.705.5325.063.473.180.6533.7713.344.8023.003.763.23414.8121.9813.765.2921.833.712.29436.17 490.6629.39 20.9816.98 14.142022TTM 5-Year Average5.505.5916,6617.8710.5710.744.533.462.39 2.2368.6243.465.1716.279.734.022.2057,95

Financial ratios: The financial ratios comprise primarily 5 types of ratios. These ratios are as…

Answered: Using the perspective of an Equity…

Using the perspective of an Equity investor, use the financial ratios to argue which one is the firm that offers the best investment opportunity?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter5: Evaluating Operating And Financial Performance

Section: Chapter Questions

Problem 9EP

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Question

Using the perspective of an Equity investor, use the financial ratios to argue which one is the firm that offers the best investment opportunity?

Price/Sales
Price/Earnings
Price/Cash Flow
Price/Book
Price/Forward Earnings
PEG Ratio
Earnings Yield %
Enterprise Value (Bil)
Enterprise Value/EBIT
Enterprise Value/EBITDA
Return on Assets %
Retun on Equity %
Retun on Invested Capital %
Operating Margin %
Net Profit Margin %
Payout Ratio %
Home Depot
2022
Current S-Year Average
2.07
2.06
19.04
19.64
24.68 16.24
248.01 235.68
18.69
20.45
1.64
2.01
5.25
5.09
369.17
361.31
15.29 15.60
13.63 13.76
2022
23.07
2022
Current 5-Year Average
1.35
1.40
19.23 21.06
14.26 15.30
321.82
13.93
16:89
1.02 1.43
5,20
4.75
155.50 162.60
137,25
17.53
12.61
15.06 16.45
13.78
14.23
TTM 5-Year Average
TTM 5-Year Average 2022
21.33
18.41
13.21
2050.28 2065.27
655.27
38.16
35.58
14.88
10.48
49.81
15.24
10.87
44.30
2.23
21.59
19.40
354.60
21.08
2.37
4.71
324.30
16.85
14.86
Lowe's Companies
22.42
3222.30
14.47
14.69
10.38
46.83
13.50 29.57
12.56 10.51
8.74
6.47
85.71
41.14
1.98
23.11
16.09
59.56
17.51
1.33
4.61
12.38
165.46
19.17
9,89
6.37
37.87
Walmart
2022
Current 5-Year Average
0.65
0.70
43.63
31.42
16.55 11.70
5.53
25.06
3.47
3.18
0.65
33.77
13.34
4.80
23.00
3.76
3.23
414.81
21.98
13.76
5.29
21.83
3.71
2.29
436.17 490.66
29.39 20.98
16.98 14.14
2022
TTM 5-Year Average
5.50
5.59
16,66
17.87
10.57
10.74
4.53
3.46
2.39 2.23
68.62
43.46
5.17
16.27
9.73
4.02
2.20
57,95

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