StudentShare solutions
Triangle menu

Financial Analysis: American Express Company - Essay Example

Extract of sample
Financial Analysis: American Express Company

Bibliography 13


Financial Analysis: American Express Company
Executive summary
Being a global service provider, American Express Company has been in the minds of many financial analysts and investors due to its ability to provide world class service and thereby sustain growth over long periods despite the continuous financial turbulence that has forced many companies to either shut their operations or cut the employment. With the principal business product services of credit payments as well as charge, the company has forged it operations to sustainable levels thereby giving back sufficient dividends to its investors (American Company Express, 2010, pg 79). The focus of this paper will be to establish the operational excellence within the company and the supporting financial capability behind the success of American Express. In this regard, the paper will employ the use of ratio analysis; liquidity ratios, leverage ratios, profitability ratios and efficiency ratios together with stock beta analysis of the company’s stock to provide an affirmative indication of the prevailing financial stability within American Express (Libby, Libby & Short, 2005, pg 143).
Introduction
Company based financial analysis has been a predominant topic in the contemporary financial markets. Every investor is quick to evaluate and thereby clearly understand the fair and true standing of any company in which he/she intends to invest.
The financial markets as well as the global and technological developments have made it easier for individual investors to access financial information of any entity in the market. Therefore, every company is increasingly becoming articulate in providing financial information to all its stakeholders in order to remain relevant and of financial standing in the face of its clients as well as other outside stakeholders. As much as the management of any company requires financial information to forge their decision-making, the other stakeholders have increasingly become wary of the significance role of the financial information in ensuring the safety of their investments (Dobbs, Huyett, & Koller, 2009, pg 43). In this regard, the paper seeks to compute and evaluate the financial position of American Express. As such, the paper will utilize appropriate ratios, industry wide analysis and the analysis of the performance of the company’s stocks through the use of beta computations. Moreover, the paper will provide an indication of the whether the company is operationally capable of sustaining the reported financial profits as well as the company’s liquidity. Analysis American Express’s liquidity Liquidity 2010 2009 2008 2007 2006 Current Ratio 17.00 3.12 3.17 3.25 3.23 Quick Ratio 12.70 1.93 1.96 2.01 2.01 Interval Measure (Days) 1214 618 501 570 594 The current ratio of American Express was 17.00:1, 3.12:1, 3.17:1, 3.25:1 and 3.23 for the years 2010, 2009, 2008, 2007 and 2006 respectively. The significant movement of the company’s current ratio in the year 2010 from the low of 3.12:1 in the previous year to a high of 17.00:1 clearly indicates the sufficiency in terms of liquidity in the company. This is because current ratio implies that the company operates over a higher margin of safety as is the conventional expectation. According to Pandey (2008, pg 179), for a company to have a satisfactory current ratio, it must attain a two to one (2:1) current ratio. In this regard, the American Express with a current ratio of 17.00:1 presents a higher level of current assets to current liabilities and this indicates the sufficiency of the company’s ability to meet its current obligations. There is no likelihood of liquidity problem in the company if the ...Show more

Summary

CONTENTS
Executive summary 3
Introduction 3
Analysis 4
American Express’s liquidity 4
American Express’s leverage capacity 5
American Express’s profitability 6
American Express’s efficiency 8
Du Point Analysis 9
Company’s beta 9
Author : nelskoepp
Financial Analysis: American Express Company essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Financial Analysis: American Express Company"
with a personal 20% discount.
Grab the best paper

Related Essays

Financial Analysis for International Company
RISKS 8 4.1 FOREIGN CURRENCY RISKS 8 4.2 Political Risks 10 5. RISK MANAGEMENT 10 5.1 MANAGING FINANCIAL RISKS: 10 5.2 MANAGING OPERATIONAL RISKS: 10 5.3 STEPS FOR MANAGING MARKET PLACE RISKS: 11 5.4 STEPS FOR MANAGING MACRO-ECONOMIC RISKS: 11 6. RECOMMENDATIONS TO MANAGE RISK: 11 6.1.
10 pages (2500 words) Essay
RAK properties company financial analysis
It is founded in line with the vision of his Highness Sheikh Saud Bin Saqr Al Qasimi, Ruler of Ras Al Khaimah. RAK Properties aims at supporting and promoting the economic growth of Ras Al Khaimah as well as assisting the emirate’s community development initiatives.
3 pages (750 words) Essay
Financial Analysis of the Company Diageo
The purposeof the report, ratio analysis is conducted for five years. To conduct a financial analysis, the first step is to review the profits that the firm has earned. For this, we take into consideration 5 years to be analyzed, which are 2011, 2010, 2009, 2008 and 2007 data reports. Ratio analyses are simply used in accounting.
9 pages (2250 words) Essay
The Coca-Cola Company Financial Results Analysis
In the third quarter results, the company posted an increased growth in sales volume as the sales grew by 2 percent (Ziobro, 2012). This was better than the previous year third quarter growth, which recorded a paltry 1 percent in same segment. The Coca cola also reported a net revenue growth by 5 percent to reach $5.67 billion in the North American segment in the third quarter an aspect that is attributed to a number of reasons.
3 pages (750 words) Essay
People Express Case Analysis
egic and coherent approach to the management of an organizations most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business” (Armstrong, 2006). HRM involves such tasks as recruitment, training
5 pages (1250 words) Essay
American Express Swot Analysis
About a century and half old firm originally started as an express company that concentrated more on forwarding freights. (“Our History”, 2009). But with gradual change of trend and product variation the American Express evolved as a company which
4 pages (1000 words) Essay
RAK properties company financial analysis
RAK Properties will also maximize shareholders’ value through its development projects in the coastal and inland areas of Ras Al Khaimah. RAK Properties has a
3 pages (750 words) Essay
Estimate critical analysis of the companys recent history with Financial Analysis of Heartland Express company
Selling of the company shares can be interpreted as a negative sign for the financial outlook of the company and will put a downward impact on the market value of the company. Where Ke is the cost of the equity, Rf
9 pages (2250 words) Essay
Financial ratio analysis FOR Mondi company
Mondi compares favourably against James Cropper plc, another paper and packaging company listed in the LSE and which is its closest competitor among the exchange listings. While Mondi may appear to be less liquid than Cropper, it shows stronger activity turnover
10 pages (2500 words) Essay
Toyota: Company Analysis
Toyota Motor Corporation is a Japan based automotive company with its headquarters in Toyota, Aichi. As of 2012, Toyota is the world’s largest automobile manufacturer by production, and in January 2014 the company became the world’s fourteenth-largest company in terms of revenues. In July 2012, the organisation produced its 200-millionth vehicle.
21 pages (5250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation