Best Five Dow Jones Components with Strong Liquidity Position; Current Ratio Recap – CSCO, MSFT, INTC, MRK, MMM

  on Jan 23,2013 Posted in Finance ,Investment Ideas
Share |
We're on   

Liquidity ratios are used to determine a firm’s ability to pay off its short-term debt obligations. Stock investors often take a close look at liquidity ratios of the company when performing fundamental analysis.

The company having a problem to meet its short-term debt obligations is at a higher risk of bankruptcy, liquidity ratios are a good indicator of whether a corporation will be able to comfortably continue as a going concern.

Current ratio is the primary ratio and most important in all 3 financial ratios that investor consider. As described earlier, liquidity ratios indicate a firm’s ability to meet its short-term debt obligations using assets that can be easily liquidated.

The current ratio gauges a firm’s current assets against its current liabilities. Usually higher numbers are better, showing that the company has a higher amount of current assets. But at the same time, it shows that the company is not properly utilizing the current assets. Let’s have a quick look of best five Dow Jones Components with higher current ratio.

Cisco Systems, Inc (NASDAQ:CSCO) has the market capitalization of 110.80 billion while its P/E ratio was 13.46. The world’s biggest chip maker has average market volume of 38.55 million. The Institutional ownership of the Cisco was 72%. Shares of the company were moving ahead of 50 days simple moving average with 7.82% while 20 days simple moving average with 2.62%. Debt to equity ratio of Cisco Systems was booked as 0.31 while long term debt to equity ratio was .31. Current ratio of the company was 3.38.

Microsoft Corporation (NASDAQ:MSFT) has market capitalization of 228.51 billion. The world’s biggest software maker has price to book ratio of 3.32. The company has 8.42 billion shares outstanding while it offers EPS was $1.85. Current ratio of Redmond, Washington Company was 2.68 and quick ratio was 2.61. The company earned $15.71 billion in previous 12 months on revenue of $72.36 billion.

In liquidity analysis of Intel Corporation (NASDAQ:INTC), value of debt to equity ratio was 0.26 while long term debt to equity ratio was same as 0.26. The company has market capitalization of 105.34 billion while its Price to book ratio was 2.14. Net profit margin of the Intel was 20.63% while gross profit margin was 62.15%. The stock volatility for the month was 1.77% while for the week 2.14%.

Merck & Co., Inc (NYSE:MRK) offered the $2.20 EPS while its beta factor was 0.30. The drug giant has market capitalization of 131.33 billion and its institutional ownership was 75%. Shares of the drug maker were moving ahead of its 50 days simple moving average with 0.29% while moving ahead of SMA 20 with 2.528%. Current ratio was 2.32 while quick ratio was 1.89. ROE ratio was 12.21% while ROI ratio was 7.84.

3M Co (NYSE:MMM) has market capitalization of 68.73 billion and its beta factor was 0.87. The institutional ownership of conglomerate was 68% while its P/E ratio was 15.88. Current ratio, which shows liquidity position, was 2.20 while quick ratio was booked as 1.62. Net profit margin of company was 15.14% while gross profit margin was 47.58. The company earned $4.41 billion in previous twelve months.

Disclosure: Opinions expressed in this article are those of the authors alone who have no stake in any stocks mentioned, and did not plan to acquire any stake within the next 72 hours.



Leave a Reply