REYNOLDS AMERICAN INC's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged 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. REYNOLDS AMERICAN INC has very weak liquidity. Currently, the Quick Ratio is 0.44 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.71% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
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|Income Statement||Q3 FY14||Q3 FY13|
|Net Sales ($mil)||2240.0||2135.0|
|Net Income ($mil)||467.0||457.0|
|Balance Sheet||Q3 FY14||Q3 FY13|
|Cash & Equiv. ($mil)||1289.0||2694.0|
|Total Assets ($mil)||15332.0||16592.0|
|Total Debt ($mil)||5487.0||6262.0|
|Profitability||Q3 FY14||Q3 FY13|
|Gross Profit Margin||54.91||54.05|
|Return on Assets||10.52||9.43|
|Return on Equity||31.82||30.8|
|Debt||Q3 FY14||Q3 FY13|
|Share Data||Q3 FY14||Q3 FY13|
|Shares outstanding (mil)||531.28||541.03|
|Div / share||0.67||0.63|
|Book value / share||9.4||9.39|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||1958902.0||2325663.0|
BUY. REYNOLDS AMERICAN INC's P/E ratio indicates a premium compared to an average of 18.57 for the Tobacco industry and a premium compared to the S&P 500 average of 19.74. To use another comparison, its price-to-book ratio of 6.96 indicates a significant premium versus the S&P 500 average of 2.73 and a significant discount versus the industry average of 14.07. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average.
|RAI 22.02||Peers 18.57||RAI 19.77||Peers 16.72|
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.
RAI is trading at a premium to its peers.
Premium. 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.
RAI is trading at a premium to its peers.
|RAI 17.63||Peers 10.94||RAI 2.52||Peers 0.88|
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.
RAI is trading at a significant premium to its peers.
Premium. 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.
RAI trades at a significant premium to its peers.
|RAI 6.96||Peers 14.07||RAI 4.21||Peers 0.02|
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.
RAI is trading at a significant discount to its peers.
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
RAI is expected to have an earnings growth rate that significantly exceeds its peers.
|RAI 4.15||Peers 4.44||RAI 1.22||Peers 4.15|
Average. 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.
RAI is trading at a valuation on par with its industry on this measurement.
Lower. A sales growth rate that trails the industry implies that a company is losing market share.
RAI significantly trails its peers on the basis of sales growth
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