Sample Essay

Return on Equity

The debt equity ratio for the company in 1998 was at 5.31, and the return on assets ratio at 0.8%. The return on equity ratio stood at 13.5% with the interest coverage in 1998 was 1.3. In 2000, the year of the merger, the debt equity ratio for the company was at 5.28, and the return on assets ratio at 0.8%. The return on equity ratio stood at 13.5% with the interest coverage in 2000 was 1.3. Two years after the merger, the debt equity ratio for the company in 2002 was at 5.68, and the return on assets ratio at 0.2%. The return on equity ratio stood at 3.9% with the interest coverage in 2002 was 1.2.

Operating Cash Flows & Absolute Cash Flows

The operating cash flow for the company was at -$2,384 million in 1998, two years before the merger. In 2000, the year of the merger, this cash flow value decreased to -$3,753 million. However after the announcement and at the time of the deal closing the cash flow value for the company further decreased to -$13,673 million in 2000. The financial statements from flow two years after the merger, in 2002, depicted the cash flow from operating activities was at $(25,134)m, the net cash flow from investing activities was at $(23,334)m with the net cash flow form financing activities arriving at $44,643m. The total net cash flow for the year was at $5,825m

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