Finance Case Assignment

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Finance Case Assignment

Introduction

The companies that we have selected include Bank of America, America International Group (AIG), and Alpha Natural Resources (ANR). All of these companies are listed on the New York Stock Exchange (NYSE). While Bank of America and AIG are services companies, ANR is a products company that extracts and sells coal in America.

Financial analysis

All of the companies have much cash available to pay their debts. Bank of America (BOA) has $120.102 million of cash available to pay its short-term debts. However, the short-term or current amount of its long-term debt is not foreseeable. This is because it has numerous kinds of short-term liabilities in the form of customer deposits and other liabilities. Still, it has much cash available. On the other hand, the cash balance of AIG is $1.474 million. On the other hand, its total current liabilities are about $315 million. Again, these represent short-term insurance liabilities rather than current portion of long-term debt. Therefore, it has ample cash available. Finally, ANR has $585.882 million of cash available at hand. On the other hand, its current portion of long-term debt is only $46.029 million. Therefore, it is in a good position.

The companies also appear to be in good condition. The current assets of BOA are $1,983.36 million. On the other hand, its total current liabilities are $1,526.68 million. Likewise, the total current assets of AIG are $504.385 million. On the contrary, its total current liabilities are $366.191 million. Finally, the total current assets of ANR are equal to $2,480.493 million. While its total current liabilities are $1,766.049 million. Therefore, they are all in good condition.

Likewise, the companies are also investing in their operations. For BOA, total investment from operations was $52.429 million in cash. Likewise, the non-current assets decreased by $36.438 million. This means that no major investments were made in non-current investments. Then, AIG also did not invest in operations and got $36.332 million in cash. Likewise, its non-current assets decreased by $3.044 million. On the other hand, ANR did invest in operations. There was a negative cash outflow of $1,147.007 million. Then, its non-current assets also grew by $177.099 million.

Likewise, it is also expected that the companies are doing good in their operations. For BOA, there is an upward trend in its net income. There was a loss in the previous two years, while this year there was a profit of $85 million. However, there is a negative trend from net cash from operating activities. This means that BOA is not doing fine. For AIG, there has been an upward trend in profits. However, the net cash from operating activities indicate that it is doing badly over the years. Hence, it is not doing fine in its operations. Similarly, ANR is also doing badly as its net income decreased this year. However, the net cash from operating activities decreased very slightly indicating that it is doing fine in its operations (BOA, 2012; AIG, 2012; ANR, 2012).

In this way, ...