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Gyutai Kim, Suhee Jung Department of Industrial Engineering, Chosun University, Gwangju, Korea

The Characteristics of the Stocks Listed in KOSPI by the Industries. Gyutai Kim, Suhee Jung Department of Industrial Engineering, Chosun University, Gwangju, Korea. Powerpoint Templates. Table of contents. 1. Introduction. Preliminary Research ; Result of TOPSIS. 2.

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Gyutai Kim, Suhee Jung Department of Industrial Engineering, Chosun University, Gwangju, Korea

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  1. The Characteristics of the Stocks Listed in KOSPI by the Industries Gyutai Kim, Suhee Jung Department of Industrial Engineering, Chosun University, Gwangju, Korea Powerpoint Templates

  2. Table of contents 1 Introduction Preliminary Research ; Result of TOPSIS 2 The Selection of the Base factors and Data Collection 3 The Characteristics of the industries using financial ratios 4 The concluding remarks 5

  3. Introduction • The company must announce publicly the financial statements every one year. • And the investors evaluate the value of the company from the financial statements to determine the investment alternative. • So we examine the feature for each industry through three categories; the stability analysis, the profitability analysis and the market value analysis. • To investigate about feature of each industry, we select two ratios which represent each category.

  4. Preliminary research; Result of TOPSIS

  5. Preliminary research; Result of TOPSIS Basic chemical component manufacturing Industry Pharmaceutical Industry

  6. The Selection of the Base Factors and Data Collection • Base factors • Data collection • The financial statements of each company in eight years (from 2001 to 2008)

  7. The Characteristics of the industries • 1. Construction industry • The current ratios are mostly “1.59” which are lower to the total average, we conclude the stability of short-term debt is rather low. • In case of profitability, except for some companies the average of companies in this industry is higher than total average, but there are a variety of returns in construction industry. • Also, the profitability index of companies are low but the PER is high. • It implies that the stock price will be decrease, so if we select the construction industry for the investment alternative, it seems to be inadequate.

  8. The Characteristics of the industries • The Ranking of Building Construction Industry by financial analysis and TOPSIS • 111

  9. The Characteristics of the industries • The financial affair ratios for Building construction industry (stability analysis)

  10. The Characteristics of the industries • The financial affair ratios for Building construction industry (probability analysis)

  11. The Characteristics of the industries • The financial affair ratios for Building construction industry (market value analysis)

  12. The Characteristics of the industries • The Ranking of Civil Construction Industry by financial analysis and TOPSIS

  13. The Characteristics of the industries • The financial affair ratios for Civil construction industry (stability analysis)

  14. The Characteristics of the industries • The financial affair ratios for Civil construction industry (probability analysis)

  15. The Characteristics of the industries • The financial affair ratios for Civil construction industry (market value analysis)

  16. A Comparisons of the Financial Result and TOPSIS Result • 2. Agriculture, forestry and fishery industry • The debt ratios are a relatively, but in the case of the stability of the short-term debt, the current ratios are less than total average, consequently, the ability to repay the short-term debt of company is shortage in this industry. • In case of profitability, the companies achieve low rate of return. • Also, the PER is generally high level, it implies that the stock price is highly ranked in the stock market. • In other words, the companies are highly overrated in spite of their low returns. • Thus, if we select the Agriculture, forestry and fishery industry for the investment alternative, it seems to be inadequate. • 3. Art, sport and related leisure service industry • The companies have good current financial condition in that they have high current ratios. • Furthermore, the companies have high part of the owners’ fund as they have debt ratios less than 35%. • But the PER is generally high level, it implies that the stock price is highly ranked in the stock market.

  17. The Characteristics of the industries • 4. Wholesale and retail trade industry • The current ratios are mostly 1.0 ~ 2.0, these are lower than a total average, also the companies are not safe about a short-term debt. • The debt ratios are relatively the low, so we can say these companies has good financial structure. • The profitability ratios are lower than total average, what was worse, some companies accomplish minus rates. • The PER figures are lower than the total average, but the stocks trade more higher than the net income in the stock market and the PBR figures are low, there is a low probability that the stock price will be increased. • So, if we select the Wholesale and retail trade industry for the investment alternative, it seems to be inadequate.

  18. A Comparisons of the Financial Result and TOPSIS Result • 5. Real estate business and leasing service industry • The current ratios are “0.0” ~ “1.5”, in general, if the current ratio exceeds the “2.0”, we can say the company is able to repay the short-term debt. • Hence, the companies in the Real estate business and leasing service industry are a little bad about the stability of the short-term debt. • But, the debt assets take possession very small proportion. • In case of profitability, the companies achieve around 5%. • There are very various PER in the Real estate business and leasing service industry. • In case of the PBR, that is the low level. • 6. Business facility management and business support service industry • The current ratios are 1.34, these are under average for overall industry, and so the companies are not safe about a short-term debt. • The average of the debt ratio is 206.30%, so the companies has poor financial do structures. • Also, examining the profitability ratios, returns are better than total average. • By contrast, the market value ratios are highly valued.

  19. The Characteristics of the industries • 7. Transportation industry • The current ratios are less than 2.0, in general, if the current ratio exceeds the “2.0”, we can say the company is able to repay the short-term debt, hence the companies in the transportation industry are no good in case of the stability of the short-term debt. • In case of profitability, the companies achieve low rate of returns rather than total average. • On the contrary to this, the PER is high, it seems that the stock trade the higher price that their real value. • And in case of the PBR, that is the low level, it means that the company does not have a potential ability of the comprehensive management. In conclusion, if we select the transportation industry for the investment alternative, it seems to be inadequate.

  20. The Characteristics of the industries • 9. Furniture manufacturing industry • The average of the current ratio is “2.07”, it is similar to the total average. • The profitability ratios of companies are low but the PER is high. • It implies that the stock price will be decrease, so if we select the Furniture manufacturing industry for the investment alternative, it seems to be inadequate. • 8. Electricity, gas, steam and air conditioning supply industry • The current ratios are mostly 0.8 ~ 1.2, these are under average for overall industry, so the companies are not safe about a short-term debt. • The average of the debt ratio is 53.30%, the equity ratios are high relatively in this industry. • Also, examining the profitability ratios, returns are better than total average except some companies. • By contrast, the market value ratios are highly valued.

  21. The Characteristics of the industries • 10. Specialized, scientific and technical service industry • The current ratios are less than “2.0” except for some companies, so the stability about the short-term debt of the company is in a bad condition. • In case of profitability, the companies achieve bad rate of return (ROTA) using the total assets, but they accomplish good returns using the equity assets (ROE). • In case of the PER, there are so many different, the PBRs are low.

  22. The Characteristics of the industries • 11. Primary metal manufacturing industry • The current ratios are mostly “1.0” ~ “2.0” which are similar to the total average, but we conclude the stability of short-term debt is rather low. • The debt ratios are less than 50 percentage, these mean the equity ratios are high relatively. • Except for some companies, the profitability ratios are lower than total average, even some companies achieve minus rate of return. • The market value ratios are highly valued, It implies that the stock price will be decrease, so if we select the Primary metal manufacturing industry for the investment alternative, it seems to be inadequate.

  23. The Characteristics of the industries • 12. Leather, bag and similar product manufacturing industry • The average of the current ratio is similar to the total average However except for the SAMYANG TONGSANG, others are less than 2.0, therefore this industry is safe about a short-term debt. • In case of profitability, the companies achieve very low rate of return. • Also, the profitability index of companies are low but the PER is high. • In case of the PBR figures are almost less than 1.0. It means that the company does not have a potential ability of the comprehensive management. • In conclusion, the Leather, bag and similar product manufacturing industry is not good investment alternative in stock market. • 13. Transportation equipment manufacturing industry • The current ratios are mostly 0.75 ~ 1.3, these are under average for overall industry, so the companies are not safe about a short-term debt. • The average of the debt ratio is 72.80%, the equity ratios are high relatively in this industry. • Also, examining the profitability ratios, returns are better than total average except some companies. • By contrast, the market value ratios are highly valued. • Also, the PER is generally high level, it implies that the stock price is highly ranked in the stock market. • In other words, the companies are highly overrated in spite of their low returns. • Thus, if we select the Transportation equipment manufacturing industry for the investment alternative, it seems to be inadequate.

  24. The Characteristics of the industries • 14. Rubber product and plastic product manufacturing industry • The current ratios are about “2.06”, the stability of short-term debt is comparatively guaranteed. • The average of the debt ratio is 34.52 percentage, the debt assets make up a very small portion of total assets. • The profitability indexes are the higher than total average as a whole. • The PER figures are lower than the total average and the PBR figures are low, there is a high probability that the stock price will be increased. • So, if we select the Rubber product and plastic product manufacturing industry for the investment alternative, it seems to be adequate.

  25. The Characteristics of the industries • 15. Metal processing product manufacturing industry • Generally, if the current ratio is over “2.0”, we can say the stability of the short-term debt is ideal, the current ratios are over the “2.0”, so we can describe the ability to repay the short-term debt of company is relatively enough in this industry. • By the profitability ratios, the industry average is lower than total average, but it is caused by the one company(Yoo Sung Technique & Stragetegy Investment) which accomplishes minus rate of return, so this industry has comparatively good profitability.

  26. The Characteristics of the industries • 16. Machine and equipment manufacturing industry • The debt ratios are a relatively low, and the current ratios are almost “2.0”, so the stability about the short-term debt of the company is in a good condition. • Looking into the profitability indexes, the returns do not exceed total average. • In case of the PER, we can not find a common character about companies in the Machine and equipment manufacturing industry. • The PBR figures are low, it means that the company does not have potentially an ability of the comprehensive management.

  27. The Characteristics of the industries • 17. Wood product manufacturing industry • The companies included in the wood product manufacturing industry, the current ratios are low, so the ability to repay the short-term debt is shortage. • In addition, the companies achieve low rate of returns. • In other words, the companies have low profitability and, at the same time, have bad condition about the stability. • Thus, if we select the wood product manufacturing industry for the investment alternative, it seems to be inadequate. • 18. Coke, briquette and refined petroleum product manufacturing industry • The industry average of the current is similar to total average, the debt ratios are less than 50%, so we can describe the ability to repay the short-term debt of company is shortage in this industry. • And the profitability ratios are comparatively high. • Also, the PER is high, however the PER is high.

  28. The Characteristics of the industries • 19. Nonmetal mineral product manufacturing industry • The Nonmetal mineral product manufacturing industry the current ratios are mostly “1.0” ~ “2.0”, that do not exceed “2.0”, therefore the companies are not safe about a short-term debt, • Only the glass and glass product manufacturing industry is safe to the short-term debt because the current ratio is “4.99”. • The debt ratios are less than 50%. • In case of profitability, the companies which are ranked in high level don’t achieve good rate of return. • In market value, the PERs are relatively high though they are lower than total average. • To the contrary the PBRs are the low level. It means that the company does not have potentially an ability of the comprehensive management.

  29. The Characteristics of the industries • 20. Textile products manufacturing industry • The Textile products manufacturing industry the current ratios are less than “1.5”, that do not exceed “2.0”, therefore the companies are not safe about a short-term debt, • Only the glass and glass product manufacturing industry is safe to the short-term debt because the current ratio is “4.99”. • The debt ratios are less than 50%. • In case of profitability, the companies which are ranked in high level don’t achieve good rate of return. • In market value, the PERs are relatively high though they are lower than total average. • To the contrary the PBRs are the low level, it means that the company does not have potentially an ability of the comprehensive management.

  30. The Characteristics of the industries • 21. Food commodity manufacturing industry • The debt ratios are a relatively low, the current ratios are less than total average, consequently the ability to repay the short-term debt of company is shortage in this industry. • In case of profitability, the companies achieve low rate of returns. • Also, the PER is generally high level, it implies that the stock price is highly ranked in the stock market. • In other words, the companies are highly overrated in spite of their low returns.

  31. The Characteristics of the industries • 22. Beverage manufacturing industry • The current financial condition of the companies that is no good. • And the profitability ratios are a little low and the PERs are relatively high even though that is lower than the average of the total. • 23. Clothing, clothing accessories and fur piece manufacturing industry • The current ratios are widely distributed from “0.0” to “5.0”. • And the profitability shows the very variety return. • The PERs also express a various figures. • Only the PBR is similar values about “1.0”. • So, in this industry we can not find the industry’s characteristic.

  32. The Characteristics of the industries • 24. Medical, precision, optical instrument and timepiece manufacturing industry • The current ratios are almost “2.0”, so the stability about the short-term debt of the company is in a good condition. • The debt ratios are a relatively low, so the companies is stable about financial structure. • In case of profitability, the companies achieve bad rate of return, even the some company generates the loss. • The profitability is poorly, on the contrary the PERs are high. In conclusion, the companies are not good investment alternative in stock market.

  33. The Characteristics of the industries • 26. Braided fabric and braiding product manufacturing industry • The current ratios are mostly “1.0” ~ “2.0”, these are under average for overall industry, so the companies are not safe about a short-term debt. • The average of the debt ratio is 48.84%, the equity ratios are high relatively in this industry. • Also, examining the profitability ratios, the companies show the very various returns. • That’s also the case with PER. Only the PBR is similar values about “1.0”. • So, in this industry we can not find the industry’s characteristic. • 25. Braided fabric and braiding product manufacturing industry • The industry average of the current ratio is “2.15”, it is higher than total average. • But, examining in detail, the ILKYUNG and the WONLIM are not exceed “2.0” about current ratio, so the three companies which are IL JEONG INDUSTRIAL, VGX International, BYC have stability about a short-term debt. • The debt ratios are under 50%. • In case of the profitability ratios, returns are lower than total average. • The PERs are lower than total average, and PBRs are low. • In this industry, the profitability is low, And the PERs are relatively high, although these lower than total average, so we think very careful if we invest our money in this industry.

  34. The Characteristics of the industries • 27. Automobile and trailer manufacturing industry • In this industry, most of companies their current ratio are less than “2.0”,generally if the current ratio is above “2.0”, the company has an ability to repay the short-term debt, therefore the companies in the automobile and trailer manufacturing industry are not too bad stability of the short-term debt. • The debt ratios relatively is good about 50%. • In case of profitability, there are so many different rate of return, even some companies make a loss. • In case of the PER figures are completely the reverse between two type of business, so we can not find out the characteristics.

  35. The Characteristics of the industries • 28. Electrical equipment manufacturing industry • The current ratios are less than “2.0”, we conclude the stability of short-term debt is rather low, but some companies in Electric motor, generator and electric conversion · supply · controlling device manufacturing industry are more than “2.0”, so these companies is able to repay the short-term debt. • The debt ratios are less than “50%”, so financial structure is good. • In case of profitability, the companies achieve a low profit. • The PER is generally high level expect for Primary battery and a storage battery manufacturing companies, it implies that the stock price is highly ranked in the stock market. • The PBR is generally low level.

  36. The Characteristics of the industries • 29. Electronic component, computer, vision, sound and communication equipment manufacturing industry • The current ratios are mostly “1.0” ~ “2.0”, if the current ratio exceeds the “2.0”, we can say the company is able to repay the short-term debt. • The debt ratios are higher than 50% expect for some companies. • From the profitability aspect, the companies generate the weak rate of return, even some companies achieve minus rate of return. • On the other hand, the PER is high, it seems that the stock trade the higher price that their real value. And in case of the PBR, that is the low level.

  37. The Characteristics of the industries • 30. Pulp, paper and paper product manufacturing industry • The debt ratios are a relatively low, but The current ratios are mostly “1.0” ~ “2.0”, so the stability about the short-term debt of the company is in a bad condition. • Consequently, the ability to repay the short-term debt of company is shortage in this industry. • Looking into the profitability indexes, the returns do not exceed total average. • The companies included in this industry are poor condition about the stability and the profitability. • Also, the PER is generally high level, it implies that the stock price is highly ranked in the stock market.

  38. The Characteristics of the industries • 31. Chemical material and chemical product manufacturing industry • The debt ratios are a relatively low, but, the current ratios are mostly under “2.0”, therefore we can say the stability of short-term debt is rather low in this industry. • In case of profitability, the average of companies in this industry is lower than total average, even some companies achieve minus rate of return. • Also, the profitability index of companies are low but the PER is high, it implies that the stock price will be decrease, so if we select the chemical material and chemical product manufacturing industry for the investment alternative, it seems to be inadequate.

  39. The Characteristics of the industries • 32. Publication, vision, broadcasting communication and information service industry • The debt ratios are approximately 50%, the current ratio is around “1.0”, that do not exceed “2.0”, therefore the companies are not safe about a short-term debt, only the companies in Data processing, hosting, portal and internet information intermediation service industry is safe to the short-term debt because the current ratio is “3.6”. • In case of profitability, the companies make a loss, so companies are no good concerning the stability and profitability. • Also, the PER is generally high level, it implies that the stock price is highly ranked in the stock market. • In other words, the companies are highly overrated in spite of their low returns.

  40. The concluding remarks • A total number of the industrial classifications of today listed in KOSPI (Korea Composite Stock Price Index) are 770 companies. • To research, the scope of the work will be confined to the stocks listed in KOSPI more than 5 years. • We took in total 32 industries including over 2 companies.

  41. The concluding remarks • The characteristics of stocks in terms of industries according to profitability analysis • The average of current ratios in terms of industries are “2.06” and the debt ratios in terms of industries are “50.33%”. • So, we can be describe the companies have enough ability to repay the short-term debt. • And we can say the companies has stable financial structure.

  42. The concluding remarks • The characteristics of stocks in terms of industries according to profitability analysis • The average of ROTA and ROE in terms of industries are “3.05%”, “5.61%” respectively. • The profitability ratios are relatively low. • The characteristics of stocks in terms of industries according to market value analysis • The average of PER and PBR in terms of industries are “17.50”, “1.15” respectively. • In case of market value analysis, it seems that the stock trade the higher price that their real value.

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