Ashland Inc

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ASH : NYSE : Basic Materials
$112.71 -0.85 | -0.75%
Today's Range: 111.97 - 113.90
Avg. Daily Volume: 393,000
07/28/16 - 3:59 PM ET

Financial Analysis


ASHLAND INC's gross profit margin for the third quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. ASHLAND INC has average liquidity. Currently, the Quick Ratio is 1.27 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 13.67% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)1290.01366.0
EBITDA ($mil)0.0275.0
EBIT ($mil)-574.0189.0
Net Income ($mil)71.0106.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1215.01143.0
Total Assets ($mil)9912.09955.0
Total Debt ($mil)4087.03698.0
Equity ($mil)2734.03167.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin-23.6436.09
EBITDA Margin0.020.13
Operating Margin-44.513.84
Sales Turnover0.50.57
Return on Assets1.944.32
Return on Equity7.97.07
Debt Q3 FY16 Q3 FY15
Current Ratio1.742.25
Debt/Capital0.60.54
Interest Expense0.049.0
Interest Coverage0.03.86


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)62.0667.62
Div / share0.390.39
EPS1.551.68
Book value / share44.0546.83
Institutional Own % n/a n/a
Avg Daily Volume396708.0581923.0

Valuation


BUY. ASHLAND INC's P/E ratio indicates a significant premium compared to an average of 24.26 for the Chemicals industry and a significant premium compared to the S&P 500 average of 25.10. To use another comparison, its price-to-book ratio of 2.76 indicates valuation on par with the S&P 500 average of 2.81 and a significant discount versus the industry average of 5.81. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ASH 35.48 Peers 24.26   ASH 12.17 Peers 15.62

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

ASH is trading at a significant premium to its peers.

 

Discount. 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.

ASH is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ASH 15.50 Peers 20.01   ASH 0.23 Peers 2.35

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ASH is trading at a discount to its peers.

 

Discount. 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.

ASH trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ASH 2.76 Peers 5.81   ASH 4.25 Peers 50.57

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.

ASH 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, ASH is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ASH 1.52 Peers 2.25   ASH -11.79 Peers -7.11

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.

ASH is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ASH significantly trails its peers on the basis of sales growth

 

 

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