Financial Analysis Valuation Msi Industry Average Good Bad

Section 2 – Financial Analysis VALUATION MSI Industry Average Good Bad SP 500 Good Bad Price/Earnings (TTM) 26.24 18.77 X 23.62 X Price/Cash Flow 16.25 11.48 X 14.21 X Price/Sales (TTM) 2.03 0.22 X 0.63 X Price/Book 5.35 2.66 X 5.33 X The Price-Earnings Ratio, or P/E Ratio, is the ratio that measures a company’s current share price with their earnings per share. This ratio is typically measured over the previous four quarters, or 1 full calendar year. MSI has a P/E Ratio of 26.24. This means that for every dollar of earnings, people are willing to pay 26.24 dollars. The industry average is 18.77 and the SP 500 is 23.62. Motorola Solutions has a higher P/E ratio than both of those so they are doing well on that front. The Price/Cash Flow ratio measures the company’s current stock market price to the cash flow per-share that is generated. This is better than the P/E ratio seeing as it adds things such as depreciation to the mix. This makes the number harder to manipulate. MSI’s Price/Cash Flow ratio is sitting at 16.25 while the industry average and SP 500 are at 11.48 and 14.21 respectively. This means that MSI’s stock is likely quite overrated which is not a good thing. This means that the price of the stock compared to how much money the company is actually generating per share is more, which is bad. The Price-to-Sales ratio, or PSR, is used to find the value that is placed on each dollar of a company’s revenue. With MSI’s PSR ratio being at 2.03, it is milesShow MoreRelatedEssay on Solution Manual-Investment22189 Words   |  89 PagesPart B END-OF-CHAPTER SOLUTIONS Fundamentals of Investments, 5th edition Jordan and Miller Chapter 1 A Brief History of Risk and Return Concept Questions 1. For both risk and return, increasing order is b, c, a, d. On average, the higher the risk of an investment, the higher is its expected return. 2. Since the price didn’t change, the capital gains yield was zero. If the total return was four percent, then the dividend yield must be four percent. 3. It is impossibleRead MoreManaging Information Technology (7th Edition)239873 Words   |  960 PagesProject at Consumer and Industrial Products, Inc. CASE STUDY III-2 A Make-or-Buy Decision at Baxter Manufacturing Company CASE STUDY III-3 ERP Purchase Decision at Benton Manufacturing Company, Inc. CASE STUDY III-4 The Kuali Financial System: An Open-Source Project CASE STUDY III-5 NIBCO’s â€Å"Big Bang†: An SAP Implementation CASE STUDY III-6 BAT Taiwan: Implementing SAP for a Strategic Transition CASE STUDY III-7 A Troubled Project at Modern Materials, Inc.