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Fin 571 Week 5 Assignment 2014 Answers

RATE OF RETURN FOR STOCKS AND BONDS2Stock ValuationThere are many techniques that are available to investors when trying to calculate their stocks, and it can become overwhelming to some. The easiest and most used method in stock valuation is the comparables method and the more involved methods that can be used in almost any situation (Investopedia.com, 2016). There are two main categories that stock valuation fall under: relative valuation and absolute valuation, which are based on fundamentals. These methods are based on dividends, growth rate, and dividends for any single business (Investopedia.com, 2016). Each situation is different for investors because every stock is different. It is difficult for investors to figure out what method to use because every industry has unique properties that may have a need for a different approach and different valuation approaches (Investopedia.com, 2016). This is why stock valuation is broken down into two basiccategories of stock, which are common and preferred. Overall, stock valuation is the total process in which an organization figures out its present monetary worth. An analyst can evaluatemany different aspects of an organization to determine its worth such as management, future earnings, market value of assets, and capital structure (Investopedia.com, 2016).Total ReturnTotal return is a measurement in the performance of the actual rate of return of an investment or a series of investments within any assessment span of time (Investopedia.com, 2016). Total return consists of distributions, interest, dividends, and capital gains that are executed over a duration of time. A great example from Investopedia.com would be "An investor buys 100 shares of Stock A at $20 per share for an initial value of $2,000. Stock A pays a 5% dividend the investor reinvests, buying five additional shares. After one year, the share price rises to $22. To calculate the investment's total return, the investor divides the total

Running head: FINANCIAL RATIO ANALYSISFinancial Ratio AnalysisFIN/571The University of PhoenixMr. Joey PorterDecember 11, 2016\Financial Ratio AnalysisThe purpose of week one’s assignment is to help us gain a better understanding of the financial statements used for corporate financial reporting and the key ratios used to make business decisions. The Fortune 500 Company that I have chosen to evaluate is Costco, which falls within the retail industry. Then I individually must review Costco’s balance sheet and income statement from their 2015 Annual Report, and then I have to calculate the following ratios using Microsoft Excel: Current Ratio, Quick Ratio, Debt Equity Ratio, Inventory TurnoverRatio, Receivables Turnover Ratio, Total Assets Turnover Ratio, Profit Margin (Net Margin) Ratio, and Return on Assets Ratio. As reported in Costco’s December 21, 2015 Annual Report (2016), they operated a total of 698 warehouse stores throughout the United States of America, Canada, as well as locations in Australia, Japan, Korea, Mexico, Spain, Taiwan, and the United Kingdom. During fiscal year

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