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Steven Madden Ltd: Financial Analysis

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The book value is defined of an asset has the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation (Staff, July 2015). Steven Madden Ltd book value is determine by subtracting their total assets of $973.05 million from their total liabilities of $231.98 million giving us a book value of $741.07 million. The book value is then divided by the total number of stocks outstanding which is $60.41 million. The total book value for Steven Madden Ltd is $12.27 per share. It is always good when the book value is lower than the market value because “it usually indicates investors believe the company has excellent future prospects for growth, expansion and increased profits …show more content…

The stock price is calculated by using the price-earnings (P/E) ratio which allows the investors to quickly compare the cost of earnings. “The P/E ratio is simply the current price of the stock divided by the last four quarters of earnings per share” (Cornett, 2016). Steven Madden Ltd current stock of $40.40 is multiplied by the shares outstanding $60.41 million which gives the total value of the stock $2.44 billion. Then the $2.44 billion is then divided by the net income of 120.91 million (Steven Madden Income, n.d.), which gives the P/E ratio of 20.18. Steven Madden P/E ratio “indicates the dollar amount an investor can expect to invest in a company in order to receive one dollar of the company’s earnings” (Staff, November …show more content…

The bond and stock analysis shows the growth of the company. Their recent earnings of 2017 have been revealed as increasing to 15% over 2016 and its expected annual revenue to increase by 11% (2017). Steven Madden Ltd has no long-term debt. This means that Steven Madden Ltd can meet their financial requirements for outstanding loans. By Steven Madden paying their short-term debt, it determines that their quick ratio measures their ability to meet their obligations and indicated good short-term financial strength. By Steven Madden Ltd being a successful company, it is highly recommended as a company to invest in. Steven Madden Ltd is a company that continues to open new stores. They are also in the demand for satisfying the market needs. By having the low P/E ratio, Steven Madden Ltd is a company that people will want to invest stock

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