Accounting 6 Teams
Company
Analysis
¥°. Introduction
1. Why we choose Oil-Industry.
As increasing or decreasing oil prices affect mach companies, ¡®Oil prices¡¯ is always ¡°the greatest economic issue¡±.
Since 2004, oil prices have gone up very quickly and recently, oil prices recorded the highest prices in history. But in this time, the article said that Korea Oil Company made a large profit. It said that because of soaring oil product prices, Korea Oil company sales increased by twice and operating income increased by twice. Also, America or foreign Oil companies¡¯ income was high increasing though oil price is increasing rapidly. But recent article said Because of building CDU and excessive supply under this condition and decreasing demand, many specialists expect that Oil industry will darker in future. As increasing or decreasing oil prices affect much company, ¡®Oil prices¡¯ is always ¡°the greatest economic issue¡±. Therefore reflecti¡¦(»ý·«)
2. How you choose companies & how we choose Best Company
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anies. And we compared with each company¡¯s rate and interpretive that ratio¡¯s meaning. After discussing the result of ratio analysis, we chose one best company to recommend investors to invest. Because no company which superior to other company in every ratio exists. Therefore we chose good one in overall in ratio analysis and although the company has risk in some ratio, we concentrate the company¡¯s ability and potential energy to recover the risk.
Accounting 6 Teams
Company
Analysis
¥±. Analyze
1. ROE
This ratio shows that which company makes more income by using stockholders` Equity.
Return on equity relates income earned to the investment made by the owners. This ratio shows that which company makes more income by using stockholders` Equity. The ROE ratio is computed as (Net Income)/(Average Stockholders` Equity). So, high ROE ratio is good condition to invest. It means that investors will invest the company which get good ROE ratio to earn more money. Chart 1 is