These numbers can be found on a recent 8-K report. Fourth quarter gross sales were 3% below the prior year quarter on a reported basis and in-line with the prior year quarter on a constant dollar basis. Net sales were 7% below the prior year quarter on a reported basis and 3% below the prior year quarter on a constant dollar basis. Full year 2016 net sale were 8% below the prior year on a reported basis. The numbers may have been a little low, but there is certainly more to look into with this company.
Taking a look at the chart, we can see that from a monthly basis, price has been fairly mobile but nothing dramatic. However, this recent month has provided a large boost in price, which could be from reports that have come out. I would certainly look into a large move such as this because it could become over extended real quick, which would mean that price could fall just as quickly. Beside that, the chart looks healthy and nothing stands out as a red flag.
How important is Mead Johnson's Liquidity
Mead Johnson
financial leverage refers to using borrowed capital as a funding source to finance Mead Johnson Nutrition ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Mead Johnson financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Mead Johnson's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Mead Johnson's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Mead Johnson's total debt and its cash.
Scrutinizing Mead Johnson - a closer look
Risks
You can find a full list of risks on the latest 10-K report, but here are a few to keep in mind while you’re doing your research. First, they are subject to political and economic risks of developing countries. This risk could even go for developed countries because even those countries have unrest. Secondly, with the business operating in China, the company has risks that could negatively affect their business. This is also an issue because a majority of their revenue and profit is derived from operations in China. Like the old words go, make sure all of your eggs are not in one basket.
Conclusion
Overall, the company has sound numbers and has been around for awhile, but only you can determine if this is a good fit for your portfolio. Use technical and fundamental analysis to formulate your own well rounded opinion, and if after that you still have questions, be sure to reach out to an investing professional as they can point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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