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Christina Williams
Fin/571 Corporate Finance
Joseph McDonald
3/23/2020
FINANCIAL ANALYSIS
The analysis of the key performance of 500 fortune company
The analysis will outline the financial performance
The company description
The applications in the financial analysis
Introduction
The aim of this study is to evaluate the key performance of a
500 fortune company, the analysis focus on analyzing the
organization financial performance over the period; the
cashflows of the operations, performance ratios, the stock and
dividends yields and revenue growth for the last three years.
The analysis will also provide the company descriptions as well
as the applications of this financial analysis
2
Group 1 Automotive, Inc.; NYSE: GPI
Sell used and new car and trucks
Performs auto maintenance and repairs
Offers auto financial and insurance
Ranked position 458 in 500 fortune list
Company’s description
Group 1 automotive Inc. (NYSE: GPI) deal with the new and
used car and trucks, perform and maintenance and report
repairs, and offers auto financing and offers auto financing and
insurance services. Group 1 automotive Inc. is ranked position
458 in the 500 fortune list, thus this means that company is
among the best performing automotive company in US
3
Cash flow from operations
Cash flow in 2019
OperationsCashflow 2019Cashflow 2018Cashflow
2017Operating activities $ 370.9$ 270$ 196.5Investment
Activities $ - 291$ - 168$ - 312.6Financial activates $ -67$-
109.5$ 121.5Net cash-flow $ 9.3 $ 10.9$ 5.4Stock based
compensation $ 18.8$ 18.7 $18.9Common stock dividends $ -
20.3$ -20.8$ 20.5
Group 1 Automotive Cash Flow Statement 2005-2020 | GPI.
This statement analysis included the all the operations activities
in the organization in the three year from 2017 to 2019.
4
Current and historical p/e ratio
P/E Ratio calculation
Comparison of the p/e ratio
Growth rate and p/e
Debts and p/e
Verdict of Group 1automotive p/e
Price-to-earnings ratio
The current price-to-earning ratio of Group 1 automotive stands
at 3.82 in this year. The lowest achieved p/e that has ever been
recorded for the organization was 0.00 for year 2009.
conversely, the highest p/e that was ever recorded for the
company was 23.8 for the upper quarter upper of year 2008. P/E
ratios primarily reflect market expectations around earnings
growth rates. If earnings are growing quickly, then the 'E' in the
equation will increase faster than it would otherwise. Group 1
Automotive has a P/E of 3.82 that's below the average in the US
market, which is 19.0
5
Variation in the purchase of shares
Limited under the terms of the Revolving Credit Facility
$132.3 million in restricted payments
Dividends of $0.22, 0.3 and 0.91 per share
Stock dividends and the yield
The stock purchase program for the vary from time to time
depending on the Board of director directives. However, the
company stock operations are regulated by Revolving credit
facility. For, in this the trade limit stood at 132.4 million for
paying dividend. In 2019, the board of director approved for the
quarterly dividends, in the first quarter the shareholders earned
0.22 per share, the second quarter they earned 0.3 and finally
0.91.
6
Current earn per share
Trend over years
Comparison of the earning per share ratio
Earnings per share ratio
As per 31 December 2019, the earning per share ratio was 2.58.
analyzing the trend as from 2006, the earning per share ratio in
been changing from time to time. The highest earning per share
ratio was 5.23 recorded in 2017 and the lowest and the lowest
being – 2.54 recorded in 2008. comparing this analysis with
other companies, Group 1 automotive has been doing better.
7
Increase in the net income
Increase in diluted earnings per common share
Increase in the adjusted net income
Increase in the total revenue
Revenue estimates
From analyzing the revenue trend in the last three years, the
company has recorded an improved growth in the net income,
diluted earning per common share, income and total revenue.
Thus, considering this trends, the revenue is expected to grow
for the next few three year holding all other factors constants.
8
In 2017
Total revenue $11.1billion
Gross profit $425.7 million
In 2018
Total revenue $11.6 billion
Gross profit $432.1 million
In 2019
Total revenue 12 billion
Gross profits $75.2 million
Revenue from the previous 3 years
In the last three financial year, Group 1 Automotive has
recorded an improve growth in its revenue. In 2017, the total
revenue for the company was $11.1 billion, gross profits of $
425.7 million. In the following year in 2018, the company
recorded a increase in the total revenue and gross profits, the
total revenue recorded was 11.6 million and gross profit of
$432.1 million. 2019, still the company recorded an increase in
total revenue and gross profits, the total revenue was 12 billion
whereas gross profit stood at $ 75.2.
9
The market cap, 40.85 which 5.5% drop
Open, 41.41 dividend yield
High, 42.25 previous close
Low, 38.94 from 52 week high
Market cap is 738.25 M
P/E ratio 4.3
Market cap for the company
Stock price definition
Price to earning ratio
The relationship between the stock price and p/e
Relate the stock price to price-to-earnings ratio.
The P/E ratio is calculated by dividing a company's current
stock price by its earnings per share (EPS). Thus, if the current
stock earning per price share is high the ratio P/E ratio will be
high.
11
Market capitalization
Trends in stock price, dividend payout, and total stockholders’
equity
Analysis, determination and recommendations
Discussion
Market capitalization refers to the total dollar market value of a
company's outstanding shares of stock; the market capitalization
shoes the size of the company in terms of production or any
other characteristics the investor may be interested about the
company. Currently, the stock range, $38.71, in the 50 day
range the average price stood at $ 32.39 and the 52 week range
had average 26.26. The P/E ratio was 4.29, dividend yield
2.87%.
Based on this analysis, the organizations the organization is
recording improved financial performance ranging from
increase in profit and revenue. Thus I can recommend an
investor to buy the share since there are higher chances of
returns.
12
Update, F. Amarin Reports Record Fourth Quarter and Full Year
2017 Financial Results and Provides Update on Operations.
Fuel Transfer Pumps and Meters - GPI. (2020). Retrieved 23
March 2020, from http://gpi.net/
Group 1 Automotive. (2020). Retrieved 23 March 2020, from
https://fortune.com/fortune500/2019/group-1-automotive/
References
Group 1 Automotive, I. (2020). Group 1 Automotive Announces
First Quarter 2019 Financial Results. Retrieved 23 March 2020,
from https://www.prnewswire.com/news-releases/group-1-
automotive-announces-first-quarter-2019-financial-results-
300837943.html
Scenario Analysis Example
for Case #23
Step 1: Define the Problem
There is a lack of communication at HSS, management needs to
communicate with Natalie in a way that can be productive.
There is confusion with what Natalie’s job description really is
and this is creating a stressful work environment for Natalie
because her two superiors are frustrated with her lack of
productivity in their eyes.
Step 2: Gather Data (8 facts)
Natalie Maclachlan was a part of The University of Western
Ontario’s honors business administration program (HBA).
Hospital Software
Solution
s (HSS) was founded in 1999 by 10 University of Ottawa
software engineering classmates
Maclachlan had interviews with the vice president Derek Chow,
manager Marcus Nardi, and vice-president of human resources
Allan Densmore.
After accepting the job, she was asked to begin her job two
months earlier (May 2005) than what was stated in her contract
(July 2005).
On July 1st, Natalie arrived at HSS headquarters and was
excited to begin her first day.
She was told her manager, Marcus Nardi, was fired three weeks
earlier
Chow believes that Natalie’s Data entry techniques are not up to
company standards and that she is responsible for the flaws
within the software.
April Worthington made a phone call to Natalie discussing why
she was working from home and not at the office.
Step 3: Certainties (3 of them)
Hospital Software

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Christina WilliamsFin571 Corporate FinanceJoseph McDonald.docx

  • 1. Christina Williams Fin/571 Corporate Finance Joseph McDonald 3/23/2020 FINANCIAL ANALYSIS The analysis of the key performance of 500 fortune company The analysis will outline the financial performance The company description The applications in the financial analysis Introduction The aim of this study is to evaluate the key performance of a 500 fortune company, the analysis focus on analyzing the organization financial performance over the period; the cashflows of the operations, performance ratios, the stock and dividends yields and revenue growth for the last three years. The analysis will also provide the company descriptions as well as the applications of this financial analysis 2 Group 1 Automotive, Inc.; NYSE: GPI Sell used and new car and trucks Performs auto maintenance and repairs
  • 2. Offers auto financial and insurance Ranked position 458 in 500 fortune list Company’s description Group 1 automotive Inc. (NYSE: GPI) deal with the new and used car and trucks, perform and maintenance and report repairs, and offers auto financing and offers auto financing and insurance services. Group 1 automotive Inc. is ranked position 458 in the 500 fortune list, thus this means that company is among the best performing automotive company in US 3 Cash flow from operations Cash flow in 2019 OperationsCashflow 2019Cashflow 2018Cashflow 2017Operating activities $ 370.9$ 270$ 196.5Investment Activities $ - 291$ - 168$ - 312.6Financial activates $ -67$- 109.5$ 121.5Net cash-flow $ 9.3 $ 10.9$ 5.4Stock based compensation $ 18.8$ 18.7 $18.9Common stock dividends $ - 20.3$ -20.8$ 20.5 Group 1 Automotive Cash Flow Statement 2005-2020 | GPI. This statement analysis included the all the operations activities in the organization in the three year from 2017 to 2019. 4 Current and historical p/e ratio
  • 3. P/E Ratio calculation Comparison of the p/e ratio Growth rate and p/e Debts and p/e Verdict of Group 1automotive p/e Price-to-earnings ratio The current price-to-earning ratio of Group 1 automotive stands at 3.82 in this year. The lowest achieved p/e that has ever been recorded for the organization was 0.00 for year 2009. conversely, the highest p/e that was ever recorded for the company was 23.8 for the upper quarter upper of year 2008. P/E ratios primarily reflect market expectations around earnings growth rates. If earnings are growing quickly, then the 'E' in the equation will increase faster than it would otherwise. Group 1 Automotive has a P/E of 3.82 that's below the average in the US market, which is 19.0 5 Variation in the purchase of shares Limited under the terms of the Revolving Credit Facility $132.3 million in restricted payments Dividends of $0.22, 0.3 and 0.91 per share Stock dividends and the yield The stock purchase program for the vary from time to time depending on the Board of director directives. However, the
  • 4. company stock operations are regulated by Revolving credit facility. For, in this the trade limit stood at 132.4 million for paying dividend. In 2019, the board of director approved for the quarterly dividends, in the first quarter the shareholders earned 0.22 per share, the second quarter they earned 0.3 and finally 0.91. 6 Current earn per share Trend over years Comparison of the earning per share ratio Earnings per share ratio As per 31 December 2019, the earning per share ratio was 2.58. analyzing the trend as from 2006, the earning per share ratio in been changing from time to time. The highest earning per share ratio was 5.23 recorded in 2017 and the lowest and the lowest being – 2.54 recorded in 2008. comparing this analysis with other companies, Group 1 automotive has been doing better. 7 Increase in the net income Increase in diluted earnings per common share Increase in the adjusted net income Increase in the total revenue Revenue estimates
  • 5. From analyzing the revenue trend in the last three years, the company has recorded an improved growth in the net income, diluted earning per common share, income and total revenue. Thus, considering this trends, the revenue is expected to grow for the next few three year holding all other factors constants. 8 In 2017 Total revenue $11.1billion Gross profit $425.7 million In 2018 Total revenue $11.6 billion Gross profit $432.1 million In 2019 Total revenue 12 billion Gross profits $75.2 million Revenue from the previous 3 years In the last three financial year, Group 1 Automotive has recorded an improve growth in its revenue. In 2017, the total revenue for the company was $11.1 billion, gross profits of $ 425.7 million. In the following year in 2018, the company recorded a increase in the total revenue and gross profits, the total revenue recorded was 11.6 million and gross profit of $432.1 million. 2019, still the company recorded an increase in total revenue and gross profits, the total revenue was 12 billion whereas gross profit stood at $ 75.2. 9 The market cap, 40.85 which 5.5% drop
  • 6. Open, 41.41 dividend yield High, 42.25 previous close Low, 38.94 from 52 week high Market cap is 738.25 M P/E ratio 4.3 Market cap for the company Stock price definition Price to earning ratio The relationship between the stock price and p/e Relate the stock price to price-to-earnings ratio. The P/E ratio is calculated by dividing a company's current stock price by its earnings per share (EPS). Thus, if the current stock earning per price share is high the ratio P/E ratio will be high. 11 Market capitalization Trends in stock price, dividend payout, and total stockholders’ equity Analysis, determination and recommendations Discussion
  • 7. Market capitalization refers to the total dollar market value of a company's outstanding shares of stock; the market capitalization shoes the size of the company in terms of production or any other characteristics the investor may be interested about the company. Currently, the stock range, $38.71, in the 50 day range the average price stood at $ 32.39 and the 52 week range had average 26.26. The P/E ratio was 4.29, dividend yield 2.87%. Based on this analysis, the organizations the organization is recording improved financial performance ranging from increase in profit and revenue. Thus I can recommend an investor to buy the share since there are higher chances of returns. 12 Update, F. Amarin Reports Record Fourth Quarter and Full Year 2017 Financial Results and Provides Update on Operations. Fuel Transfer Pumps and Meters - GPI. (2020). Retrieved 23 March 2020, from http://gpi.net/ Group 1 Automotive. (2020). Retrieved 23 March 2020, from https://fortune.com/fortune500/2019/group-1-automotive/ References Group 1 Automotive, I. (2020). Group 1 Automotive Announces First Quarter 2019 Financial Results. Retrieved 23 March 2020, from https://www.prnewswire.com/news-releases/group-1- automotive-announces-first-quarter-2019-financial-results- 300837943.html
  • 8. Scenario Analysis Example for Case #23 Step 1: Define the Problem There is a lack of communication at HSS, management needs to communicate with Natalie in a way that can be productive. There is confusion with what Natalie’s job description really is and this is creating a stressful work environment for Natalie because her two superiors are frustrated with her lack of productivity in their eyes. Step 2: Gather Data (8 facts) Natalie Maclachlan was a part of The University of Western Ontario’s honors business administration program (HBA). Hospital Software Solution s (HSS) was founded in 1999 by 10 University of Ottawa software engineering classmates Maclachlan had interviews with the vice president Derek Chow, manager Marcus Nardi, and vice-president of human resources Allan Densmore. After accepting the job, she was asked to begin her job two months earlier (May 2005) than what was stated in her contract (July 2005).
  • 9. On July 1st, Natalie arrived at HSS headquarters and was excited to begin her first day. She was told her manager, Marcus Nardi, was fired three weeks earlier Chow believes that Natalie’s Data entry techniques are not up to company standards and that she is responsible for the flaws within the software. April Worthington made a phone call to Natalie discussing why she was working from home and not at the office. Step 3: Certainties (3 of them) Hospital Software