INFOSYS LTD's gross profit margin for the second quarter of its fiscal year 2014 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. INFOSYS LTD is extremely liquid. Currently, the Quick Ratio is 4.16 which clearly shows the ability to cover any short-term cash needs. INFY managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.
During the same period, stockholders' equity ("net worth") has increased by 18.72% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.
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|Income Statement||Q2 FY14||Q2 FY13|
|Net Sales ($mil)||2201.0||2066.0|
|Net Income ($mil)||511.0||383.0|
|Balance Sheet||Q2 FY14||Q2 FY13|
|Cash & Equiv. ($mil)||5232.0||4133.0|
|Total Assets ($mil)||9989.0||8397.0|
|Total Debt ($mil)||0.0||0.0|
|Profitability||Q2 FY14||Q2 FY13|
|Gross Profit Margin||40.66||38.24|
|Return on Assets||19.45||19.99|
|Return on Equity||23.71||24.33|
|Debt||Q2 FY14||Q2 FY13|
|Share Data||Q2 FY14||Q2 FY13|
|Shares outstanding (mil)||1142.81||1142.81|
|Div / share||0.0||0.0|
|Book value / share||7.17||6.04|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||2043396.0||1379855.0|
BUY. INFOSYS LTD's P/E ratio indicates a discount compared to an average of 23.82 for the IT Services industry and a value on par with the S&P 500 average of 19.99. To use another comparison, its price-to-book ratio of 4.54 indicates a significant premium versus the S&P 500 average of 2.76 and a significant discount versus the industry average of 8.98. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, INFOSYS LTD proves to trade at a discount to investment alternatives within the industry.
|INFY 19.20||Peers 23.82||INFY 16.89||Peers 17.50|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.
INFY is trading at a discount to its peers.
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
INFY is trading at a valuation on par to its peers.
|INFY 17.71||Peers 20.50||INFY NM||Peers 1.64|
Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.
INFY is trading at a valuation on par with its peers.
Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
INFY's negative PEG ratio makes this valuation measure meaningless.
|INFY 4.54||Peers 8.98||INFY 15.30||Peers 20.79|
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
INFY is trading at a significant discount to its peers.
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
However, INFY is expected to significantly trail its peers on the basis of its earnings growth rate.
|INFY 4.36||Peers 5.21||INFY 7.84||Peers 8.61|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
INFY is trading at a discount to its industry on this measurement.
Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.
INFY is keeping pace with its peers on the basis of sales growth.
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