Stocks Using Python

Stocks Using Python
Tesla Vs. Lucid
The table below shows the comparison of key financial ratios of Tesla Inc. and Lucid Motors for
the year ending 31/12/2021:
Tesla Lucid
Current ratio 1.38 16.43
Debt-Equity Ratio 0.22 0.51
Long-term debt ratio 0.14 0.34
Inventory Turnover 6.99 1.22
Asset Turnover 0.87 0.00
Return on Equity (ROE) 18.20 -66.00
Return on Assets (ROA) 9.08 -32.73
Return on Investment (ROI) 15.57 -43.71
Stock Valuation
Present value of the stock $673.42 $17.60
Tesla and Lucid are among the American companies that produce electric vehicles; although
both electric vehicles manufacturers are based in California, Elon Musk's popularity may give
Tesla an advantage. Young Gravy, after all, exhorts young people to "whip a Tesla" rather than
"whip a Lucid." But after a few laps around the course, Lucid can catch up, much like in a real
automobile race. After all, Lucid only joined the chat couple of years ago, while Tesla had a head
start (MCWILLIAMS, 2021).
When it comes to how these two EV companies fare in the market, the above financial ratio table
is used; current ratio is used to show company’s capability to meet its short-term obligations - the
current ratio is a liquidity ratio that assesses a company's capacity to meet short-term financial
commitments with a one-year maturity. It explains to investors and analysts how a business can
use the majority of the current assets listed on its balance sheet to pay down its outstanding debt
and other payables (CFI, 2022). Tesla’s current ratio is 1.38; this means that the company is in a
good position when it comes to meeting its short-term obligations – the company is using its
current asset well. The Lucid’s current ratio is 16.43; it obvious that a larger current is good.
Acceptable current ratio ranges from 1.5 to 3. A current ratio of 9 or 10 can suggest that your
business is having trouble allocating capital and is keeping too much cash on hand. From a
financial standpoint, that money might be better used for investments or growth strategies.
Therefore it seems that Lucid is having difficulties managing its current assets.
Another key financial measure is the ROI (Return on Investment). It is a profitability measure
that evaluates the performance or potential return from a business or investment. The ROI
formula looks at the benefit received from an investment, or its gain, divided by the investment's
original cost (Carlson, 2019). In simple terms, ROI shows the profit or loss generated on the
amount of money invested; Tesla’s ROI of 15.57% shows that the company is efficient in
generating sales. On the other hand, Lucid’s negative ROI indicates that the company’s costs are
greater than the returns.

Stocks Using Python
Nike vs. Puma
The table below shows the comparison of key financial ratios of Nike and Puma for the year
ending 31/12/2021:
Nike Puma
Current ratio 2.72 1.28
Debt-Equity Ratio 0.74 -39.68
Long-term debt ratio 0.42 1.03
Inventory Turnover 3.59 8.96
Asset Turnover 1.18 1.12
Return on Equity (ROE) 44.86 1190.78
Return on Assets (ROA) 15.17 -1285
Return on Investment (ROI) 25.82 -3077
Stock Valuation
Present value of the stock $102.20 $63.16
Nike and Puma are among best companies in the sportswear manufacturing industry; each has
continued to hold the top rank in the sportswear industry. Over time, these companies have left
their distinctive imprints on users' hearts and minds, both consciously and unintentionally. And
they have no intention of stopping any time soon.
Both companies seem to be doing well when it comes to utilizing their current assets in paying
their short term obligations. Nike has a current ratio of 2.72 meaning that it is in a very healthy
position to pay its short term debts. Puma has less current ratio that Nike but the company is still
doing well a current ratio of 1.28.

The table above shows that Puma seems to be struggling with its debt management; when we
look at the company’s debt to equity ratio, it is not doing very well. The debt-to-equity ratio (also
known as the "risk ratio," "gearing," or "debt-equity ratio") is a leverage ratio that determines
how much overall debt and financial liabilities weigh against total shareholders' equity. A
company's negative D/E ratio indicates that its shareholders' equity is negative. It signifies that
the business has more liabilities than assets, to put it another way. This is typically regarded as a
very dangerous indicator, suggesting that the business may be in danger of going bankrupt. Nike
seems to be doing well when it comes to its debt management since it has a D/E ratio of 0.74.
Conclusion
After performing stock analysis in Python, I came to realize that my optimal portfolio would
require 56.8% of my money in Tesla investment, 38.6% in Nike investment, 4.2% in Puma
investment, and 0.4 in Lucid investment. This gives a portfolio beta of 1.05; this beta value
means that when relative to the S&P 500, it increases by 10.5% if the S&P's excess return
increases by 10%. At the end, my actual return would be 0.00174, which is larger than the
required return of 0.00148; therefore my investment portfolio is totally profitable due to the fact
that huge portions of my investments are in less riskier and highly profitable stocks.
References
Carlson, R. (2019). The Return on Investment Ratio Explained. Retrieved from
https://www.thebalancesmb.com/return-on-investment-ratio-393206
CFI. (2022). Current Ratio. Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/finance/current-ratio-formula/
MCWILLIAMS, J. (2021). Who Will Win The Electric Car Race? Tesla VS Lucid Motors.
Retrieved from https://greyjournal.net/hustle/inspire/who-will-win-the-electric-car-race-
tesla-vs-lucid-motors/

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Stocks Using Python

Tesla Vs. Lucid

the year ending 31/12/2021:

Current ratio 1.38 16.43

Debt-Equity Ratio 0.22 0.51

Long-term debt ratio 0.14 0.34

Inventory Turnover 6.99 1.22

Asset Turnover 0.87 0.00

Return on Equity (ROE) 18.20 -66.00

Return on Assets (ROA) 9.08 -32.73

Return on Investment (ROI) 15.57 -43.71

Present value of the stock $673.42 $17.60

start (MCWILLIAMS, 2021).

greater than the returns.

Nike vs. Puma

Current ratio 2.72 1.28

Debt-Equity Ratio 0.74 -39.68

Long-term debt ratio 0.42 1.03

Inventory Turnover 3.59 8.96

Asset Turnover 1.18 1.12

Return on Equity (ROE) 44.86 1190.78

Return on Assets (ROA) 15.17 -1285

Return on Investment (ROI) 25.82 -3077

Present value of the stock $102.20 $63.16

they have no intention of stopping any time soon.

doing well a current ratio of 1.28.

Carlson, R. (2019). The Return on Investment Ratio Explained. Retrieved from

CFI. (2022). Current Ratio. Retrieved from

Retrieved from https://greyjournal.net/hustle/inspire/who-will-win-the-electric-car-race-

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