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dag56 replied to the topic Discussion Topic: Exercise your research skills in the forum Business 101 7 years, 6 months ago
The company I am choosing to perform a brief valuation on is Bristol-Myers Squibb
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ROI=20.87% The current return on investment that is given by marketwatch.com shows a healthy ROI percentage. This roughly translates to for every $5 invested in Bristol-Myers Squibb, you can expect a $1 return of profit at its current market rate. It can be calculated by dividing net sales by investments.
ROE=29.28% This is arguably the most important metric to evaluate a company (fun fact: it is also Warren Buffet’s favorite metric) due to its very direct and essential formula used by stakeholders/ investors. This metric compares the income comparing the income available to just equity investors to the capital owned (and put to work) by just equity investors. Regarding the near 30% rate of BMS, the average the average ROE of more than 7,400 US publicly traded firms was 10.38% so it is safe to say that BMS is a more valued company then most.
ROA= 13.62% currently at a respectable rate, the ROA of BMS shows how efficiently a company can profit from its assets, regardless of its size. One way BMS can boost this efficiency number is for it to utilize more of its assets more efficiently with the goal to eventually turn a profit.Overall, I would conclude that Bristol-Myers Squibb is a generally healthy company (although it has had some recent setbacks with their recent blockbuster drug) and the current numbers project it to be a safe company to become a shareholder. This bio-pharmaceutical giant looks to have a bright future and be on tract for continued steady and sustainable growth.