financial analysics
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Return on equityReturn on equity
ROE 2009 2010 2011
McGraw-Hill 39.57% 37.45% 57.51%
Return on equityReturn on equity
Has gone down Has gone down
The rise of stockholders’equity > The rise of Net income
The rise of stockholders’equity > The rise of Net income
ROE decreased 2.12 %ROE decreased 2.12 %
36.00%36.50%37.00%37.50%38.00%38.50%39.00%39.50%40.00%
2009 2010
Return on equityReturn on equity
Significant riseSignificant rise
Net income rised (828,000 to 911,000) & stockholders’equity decreased (2,211,000 to 1,508,000)
Net income rised (828,000 to 911,000) & stockholders’equity decreased (2,211,000 to 1,508,000)
ROE increased 22.06 %ROE increased 22.06 %
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2010 2011
Return on equityReturn on equity
0.00%
20.00%
40.00%
60.00%
80.00%
Pearson 9.17% 23.14% 16.05%
McGraw-Hill 39.57% 37.45% 57.51%
2009 2010 2011
Return on equityReturn on equity
2009
0.00%
20.00%
40.00%
McGraw-Hill
39.57%
Pearson 9%
2009
The using of McGraw-Hill’s stockholders’equity was better than Pearson
The using of McGraw-Hill’s stockholders’equity was better than Pearson
Return on equityReturn on equity
2010
0.00%
10.00%
20.00%
30.00%
40.00%
McGraw-Hill 37.45%
Pearson 23.14%
2010
The use of stockholders’equity and the debt of McGraw-Hill were more effective
The use of stockholders’equity and the debt of McGraw-Hill were more effective
2011
0.00%
20.00%
40.00%
60.00%
McGraw-Hill 57.51%
Pearson 16.05%
2011
Return on equityReturn on equity
2011
0.00%20.00%40.00%60.00%
McGraw-Hill 57.51%
IndustryAverage
16%
2011
More apply rewarded than other shareholders in the industry.
More apply rewarded than other shareholders in the industry.
Account Receivable Turnover Account Receivable Turnover
Receivables Turnover 2009 2010 2011
McGraw-Hill 6.05 times 6.24 times 5.98 times
Account Receivable TurnoverAccount Receivable Turnover
1.00
3.00
5.00
7.00
9.00
2009 2010 2011
Account Receivable TurnoverAccount Receivable Turnover
1
3
5
7
9
2009 2010
It increased 0.19 times It increased 0.19 times
Good policy in collecting money and effectively process credit Good policy in collecting money and effectively process credit
Account Receivable TurnoverAccount Receivable Turnover
1.00
3.00
5.00
7.00
9.00
2010 2011
The average collection period increased 2 days in 2011 ( 58 days 60 days ) The average collection period increased 2 days in 2011 ( 58 days 60 days )
It decreased 0.26 times It decreased 0.26 times
Account Receivable TurnoverAccount Receivable Turnover
1.00
3.00
5.00
7.00
9.00
Pearson 4.00 4.24 4.23
McGraw-Hill 6.05 6.24 5.98
2009 2010 2011
In general, McGraw-Hill’s receivables turnover is larger than Pearson through 3 years.In general, McGraw-Hill’s receivables turnover is larger than Pearson through 3 years.
The higher receivables turnover showed the more efficient business operation and tight credit policies. The higher receivables turnover showed the more efficient business operation and tight credit policies.
Account Receivable TurnoverAccount Receivable Turnover
Receivables Turnover
2009 2010 2011
McGraw-Hill 6.05 times 6.24 times 5.98 times
Pearson 4 times 4.24 times 4.23 times
2.05 times 2 times 1.75 times
McGraw-Hill’s policy to collect receivable was more effective than competitor.McGraw-Hill’s policy to collect receivable was more effective than competitor.
Account Receivable TurnoverAccount Receivable Turnover
2011 McGraw-Hill
Industry
Receivables Turnover
5.98 times 8 times
McGraw-Hill was collected its receivable less effective than industry.McGraw-Hill was collected its receivable less effective than industry.
2011: McGraw-Hill < Industry ( 2.02 times)2011: McGraw-Hill < Industry ( 2.02 times)