Running Head: Stoke Exchange Analysis

Running Head: Stoke Exchange Analysis

Stock Exchange Analysis 6

Stock Exchange Analysis



A. In your own words, please identify two different stock exchanges in the United States. Describe the similarities and differences between the two stock exchanges. Identify one stock from each of the two stock exchanges.

The New York Stock Exchange and the National Association for Stock Dealers Automated (NASDAQ) are the largest stock exchange in the U.S both located in New York. They both have a significantly high stock exchange per day. The two stock exchange market is different in their mode of operation. NASDAQ stoke exchange was established in 1971 and it operates with their dealers via internet and telephone. On the other hand, New York Stock Exchange operates with brokers buying or selling on the behalf of clients or firms on the exchange floor. The two stock exchange companies have about 4,700 listed company operating between them. Compared to NASDAQ, NYSE fees are a bit higher and there are possibilities that well-established companies like Ford Motor Company listed on NYSE (Hegde, Lin & Varshney, 2017).

B. Using the two stocks you identified, determine the free cash flow from 2013 & 2014. What inference can you draw from the companies’ free cash flow?


Nike Company Free Cash Flow: 2013 = $2.283B

Nike Company Free Cash Flow: 2014 = $1,999B

The free cash flow indicates that Nike had more funds coming in from operation and could invest more on capital expenses like building, patent, machinery, land, office equipment etc. while still, it had a decrease in the cash flow because it is a large company (Hegde et al., 2017).


Advance Auto Parts Free Cash Flow 2013 = $349.49M

Advance Auto Parts Free Cash Flow 2014 = $480.64M

Advance Auto Parts witnessed an increase in cash flow from their investment and use it to increase their capital expenditure. But they could increase their free cash flow and this indicates they have enough capital to maintain and expand the company using the excess funds from the stock exchange. Also, they can use the funds to pursue opportunities that improve their shareholder’s value (Hegde et al., 2017).

C. Using the most recent financial statements for both stocks, prepare two financial ratios for each of the following categories: liquidity ratios, asset management ratios, and profitability ratios. You should have a total of six ratios for each stock, per year. What challenges, strengths, or weaknesses do you see? Please be articulate.

According to the results from the calculation of the two stock market giants, it is evidenced that there is a significant value for each of the determined for liquidity, profitability and asset turnover. The significant difference can be attributed to the line of business for the stocks that were selected as well as the market and size of the companies (Yan, Xie & Wang, 2015).


Liquidity RatioTotal Assets Turnover RatioProfitability Ratio

Nike 20133.4744%9.8%

Nike 20142.7250%9.7%

Liquidity RatioTotal Assets Turnover RatioProfitability Ratio

Advance Auto Parts 20132.3417%6%

Advance Auto Parts 20141.3924%5%


The following are the various calculations according to each of the Ratios:


Nike 20142013

Current assets13,696 13,626

Current liabilities5,027 3,926

Current ratio2.723.47

Advance Auto31-May-1431-May-13

Current assets5.577.96

Current liabilities4.0493.4

Current ratio1.382.34

Liquidity Ratio Calculation

Liquidity Ratio Calculation




Nike Sales25,313,000.0027,799,000.00

Nike Assets17,545,000.0018,594,000.00


In Billions20132014

Advance Sales6.499.84

Advance Assets5.577.96


Total Assets Turnover Ration Calculation

Total Assets Turnover Ration Calculation




Nike Net Income$2,693,000 $2,472,000

Nike Sales$27,799,000 $25,313,000

Nike Ratio9.7%9.8%


Advance Net Income$492.47 $390.86

Advance Sales$9,843 $6,493

Advance Ratio5.0%6.0%

Profitability Calculatiomn

Profitability Calculatiomn


From the ratio, it clear that Advance Auto Parts has an advantage over Nike with their ability to generate operation flow with excellent for both 2013 and 2014. However, there only challenge is that Advance Auto Parts is still a developing company compared to Nike, hence their total operation cost and expansion costs are limited. Therefore, the age of the company, market and financial ratio should be considered when analyzing the firm’s worth and deciding if it is necessary to invest.


Yan, X. G., Xie, C., & Wang, G. J. (2015). Stock market network’s topological stability: Evidence from planar maximally filtered graph and minimal spanning tree. International Journal of Modern Physics B29(22), 1550161.

Hegde, S., Lin, H., & Varshney, S. (2017). Investor recognition and liquidity: evidence from dual listing on the NYSE and NASDAQ. Applied Economics Letters24(4), 229-232.

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