Wk 3 Discussion – Financial Management Tools [due Day 3]
At any point in time, the market value of a firm’s common stock depends on many factors.
Respond to the following in a minimum of 175 words:
- Visit Yahoo Finance. Select a public company that has not been selected by another student in the discussion and look up the company’s stock’s performance over the last year. Discuss which company you selected and its performance.
- What do you think are the market forces that might have influenced the value of the company’s stock at its peaks and valleys?
- What do your findings indicate about your selected company’s financial health?
The firm picked, Asian Paints Ltd., had an excellent performance throughout the previous year.
The following market dynamics or variables have an impact on the performance or value of the company’s stock:
1) Supply and demand.
2) The company’s financial performance.
3) Major economic developments.
Asian Paints Ltd.’s financial situation has always been sound, and there is no chance of it failing. The business utilized to implement corrective actions in order to improve financial performance. The experts came to the conclusion that the Asian Company is highly healthy and financially viable using ratio analysis and the Z score methodology. The ratio analysis demonstrates the effectiveness of financial management.
Asian Paints Ltd. is a worldwide corporation with its headquarters in Mumbai, Maharashtra, and was founded in India in 1945. Coatings, goods, and paints connected to home décor and other associated services used to be part of the company’s portfolio of products.
This corporation is the biggest in India and the third biggest in Asia. Additionally, Asian Paints Ltd. used to outperform the market over the last five months, with stock values rising by 25% vs 13% for the BSE Sensex.
It used to report fantastic success in the third quarter of the 2019 calendar year, which used to be fueled by a 20% growth in volume, the largest increase from the previous year, where the stock performance is steady.
The following market dynamics or variables have an impact on the performance or value of Asian Paints Ltd. corporate stock:
- Demand and supply for shares, which can affect the stock price, are important or major factors. Equities utilized the bid-ask method to buy and sell stocks on the open market. The asking price is the lowest price at which sellers are willing to give up their shares, while the bid price is the maximum price at which buyers are willing to make a payment for the stock. The higher share price is caused by there being more buyers than sellers of the stock at the asking price.
- Additionally, other businesses used to be required to consistently record positive profitability during both good and bad economic cycles. The company used to be better protected against low profits as well as stable profits for premiums in the market. Consistency and consistency were key factors in generating a steady flow of buyers for equities that led to an increase in stock prices.
- Although the company used to deal with the microeconomic, the stock used to be impacted by microeconomic elements like the state of the economy. When defining an economic regression, a company that once had well-established or operating services may find it more difficult to raise funding from the economy during a recession. As a result, the corporation started to show signs of financial loss and the economy’s slowing growth rates. Stocks and shares used to be in short supply. When the supply of stocks surpassed the demand, prices dropped and share prices rose as a result of the increased demand.
The following findings demonstrate the financial health of Asian Paints Ltd.
1) Asian Paints Ltd.’s working capital management, which was satisfying as well as ineffective as well as sound for the years to come.
2) According to the research period, retained profits to total sales ratios are often erratic. The company’s retained earnings as a percentage of total assets are greater since they are financing their assets with retained earnings rather than borrowing money.
3) Reciprocating the debt-equity ratios, which were utilized to show the company’s progress over time. It once served to demonstrate the company’s long-term viability.