Profitability Ratios Proving Vital for Investment: Cliffs Natural Resources (NYSE:CLF), ConocoPhillips (NYSE:COP)

Moving on tracing line, Cliffs Natural Resources Inc. (NYSE:CLF) need to consider for profitability analysis, in latest session share price swings at $8.97 with percentage change of 1.70%. Cliffs Natural Resources’s (CLF) CEO, Laurenco Goncalves, has always been vocal about the subsidized steel products entering the US market and the consequent woes of the US steel industry.

While the situation had already started changing in the beginning of 2016, several trade rulings increased the duties on dumped steel products, thereby protecting domestic steel players. Donald Trump’s win in the US presidential election seems to be serving as a further positive in this regard.

The Co has positive 1.90% profit margin to find consistent trends in a firm’s earnings. Gross profit margin and operating profit margin are its sub parts that firm have 13.70% and 16.30% respectively. The returns on assets were 1.80% that gives an idea about how efficient management is at using its assets to generate earnings. It has returns on equity of -1.70%, which is measuring profitability by disclosing how much profit generates by CLF with the shareholders’ money.

The firm attains analyst recommendation of 3.00 on scale of 1-5 with week’s performance of -3.86%. The firm current ratio calculated as 2.20, this value is acceptable if it lies in 1.3% to 3%. But its varies industry to industry. To strengthen these views, active industry firm has Quick Ratio of 0.90, which indicates firm has sufficient short-term assets to cover its immediate liabilities.

ConocoPhillips (NYSE:COP) also making a luring appeal, share price swings at $50.77 with percentage change of -1.61% in most recent trading session.

Profitability Valuation

The profit margin can answer significantly to find consistent trends in a firm’s earnings, the Co has negative -30.00% profit margin that indicates every dollar of sales a firm actually keeps in earnings, and the larger number indicates improving and vise worse. Gross profit margin, operating profit margin are its sub parts that firm has 35.00% and -37.20% respectively. Moving toward returns ratio, COP has returns on investment of -6.50% which indicates firm’s investment efficiency or to compare the efficiency of a number of different investments.

While returns on assets calculated as -7.30% hat gives an idea about how efficient management is at using its assets to generate earnings. It has returns on equity of -18.40%, which is measuring a corporation’s profitability by revealing how much profit generates by COP with the shareholders’ money. The firm attains analyst recommendation of 2.10 on scale of 1-5 with week’s performance of -1.51%.

Moving toward ratio analysis, it has current ratio of 1.30 and quick ratio was calculated as 1.10. The debt to equity ratio appeared as 0.79 for seeing its liquidity position. The firm attains analyst recommendation of 2.10 out of 1-5 scale with week’s performance of -1.51%.

 

About Devon Leftovich

Devon Leftovich is an entrepreneur. He has been writing and editing professionally for over six years. He is admin editor and senior content writer of SWR. However, he has determined to give investors something rare, a dignified partner who can manage money with integrity and a clear conscience about the degree of due diligence behind investment decisions. He said, "I love the financial world because it is like one big puzzle and I hope we the SWR help each other out to solve the puzzle to help us realize our dreams." Interests: Analysis of different Companies; including news and analyst rating updates. He performs analysis of Companies and publicizes important information for investor/traders community. Stocks long-term and short-term holding views, Tech Stocks

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