4.4 Performance and Value
Price to earnings ratio, is a ratio used to value a company, it measures the current share price relative to earnings per share and is indicator of the value of the organisation. The main objective for a company is to create wealth for its shareholders (Petty et al, 2012). REG and Japara were listed on the ASX after end of FY2014, due to this data is not available for comparison. Figure 4 shows good price earnings per share for both companies, with REG showing a greater return of 20% per share over JAP for FY2015.
4.5 Profitability
Net profit as shown in figure 6 is a representation of every dollar in sales remaining after all expenses are paid, the balance remaining is net profit. JHC moved from a negative profit …show more content…
The industry average for HLI is lower than what is appearing the be the trend for RAC, this can be attributed to the long term residents in RAC as opposed to short term residents in the HLI combined with the addition of Government funding for the RAC …show more content…
Conclusion
RAC is an industry facing rapid growth, due to the increase in population over the age of 65 unable to care for themselves. Government will face, greater pressure to provide essential services in RAC, for this demographic. It is therefore reasonably anticipated that Government will continue to provide financial incentives for greater corporatisation of the market to enable provision of RAC needs into the future. With a limited number of players in the industry and a growing demand for services, market competition will not be of concern for some time into the future.
This report has analysed information regarding the financial performance and ongoing viability of two ASX listed companies with the same industry, providing a recommendation as to whether an invest in either company would be advisable.
7.
Price to earnings ratio, is a ratio used to value a company, it measures the current share price relative to earnings per share and is indicator of the value of the organisation. The main objective for a company is to create wealth for its shareholders (Petty et al, 2012). REG and Japara were listed on the ASX after end of FY2014, due to this data is not available for comparison. Figure 4 shows good price earnings per share for both companies, with REG showing a greater return of 20% per share over JAP for FY2015.
4.5 Profitability
Net profit as shown in figure 6 is a representation of every dollar in sales remaining after all expenses are paid, the balance remaining is net profit. JHC moved from a negative profit …show more content…
The industry average for HLI is lower than what is appearing the be the trend for RAC, this can be attributed to the long term residents in RAC as opposed to short term residents in the HLI combined with the addition of Government funding for the RAC …show more content…
Conclusion
RAC is an industry facing rapid growth, due to the increase in population over the age of 65 unable to care for themselves. Government will face, greater pressure to provide essential services in RAC, for this demographic. It is therefore reasonably anticipated that Government will continue to provide financial incentives for greater corporatisation of the market to enable provision of RAC needs into the future. With a limited number of players in the industry and a growing demand for services, market competition will not be of concern for some time into the future.
This report has analysed information regarding the financial performance and ongoing viability of two ASX listed companies with the same industry, providing a recommendation as to whether an invest in either company would be advisable.
7.