Cardinal Health Operating Margin vs. Return On Asset
| CLH Stock | EUR 115.95 0.40 0.34% |
For Cardinal Health profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Cardinal Health to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Cardinal Health utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Cardinal Health's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Cardinal Health over time as well as its relative position and ranking within its peers.
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Cardinal Health Return On Asset vs. Operating Margin Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Cardinal Health's current stock value. Our valuation model uses many indicators to compare Cardinal Health value to that of its competitors to determine the firm's financial worth. Cardinal Health is number one stock in operating margin category among its peers. It also is number one stock in return on asset category among its peers reporting about 2.72 of Return On Asset per Operating Margin. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Cardinal Health's earnings, one of the primary drivers of an investment's value.Cardinal Return On Asset vs. Operating Margin
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
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| = | 0.01 % |
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
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| = | 0.0223 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Cardinal Health Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Cardinal Health, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Cardinal Health will eventually generate negative long term returns. The profitability progress is the general direction of Cardinal Health's change in net profit over the period of time. It can combine multiple indicators of Cardinal Health, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Cardinal Health, Inc. operates as an integrated healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. Cardinal Health, Inc. was founded in 1979 and is headquartered in Dublin, Ohio. CARDINAL HEALTH operates under Medical Distribution classification in Germany and is traded on Frankfurt Stock Exchange. It employs 46354 people.
Cardinal Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Cardinal Health. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Cardinal Health position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Cardinal Health's important profitability drivers and their relationship over time.
Use Cardinal Health in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Cardinal Health position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cardinal Health will appreciate offsetting losses from the drop in the long position's value.Cardinal Health Pair Trading
Cardinal Health Pair Trading Analysis
The ability to find closely correlated positions to Cardinal Health could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Cardinal Health when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Cardinal Health - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Cardinal Health to buy it.
The correlation of Cardinal Health is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Cardinal Health moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Cardinal Health moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Cardinal Health can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Cardinal Health position
In addition to having Cardinal Health in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Additional Information and Resources on Investing in Cardinal Stock
When determining whether Cardinal Health offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Cardinal Health's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Cardinal Health Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Cardinal Health Stock:Check out Trending Equities. For more detail on how to invest in Cardinal Stock please use our How to Invest in Cardinal Health guide.You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
To fully project Cardinal Health's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Cardinal Health at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Cardinal Health's income statement, its balance sheet, and the statement of cash flows.