Ratio analysis

P/E ratio
From 2006 to 2009 is 12.16
The average 0/e ratio is 13-15 hence this is acceptable

Current ratio
2 to 1
A good current ratio is from 1.5% to 3% hence this is a good ratio

Gross profit
Quarter Gross Profit Margin remained above company average rate of 86.11%. Observing
second quarter 2019 results within Money Center Banks industry Jpmorgan Chase & Co
has achieved highest Gross Profit Margin

Roa
8.4%
A good roa is considered above 5% hence is a good roa

SWOT ANALYSIS
Strengths~
Leading player in the global financial services: JPMC has operations in over 60 countries
and serves various customers, businesses, institutions and government clients. JPMC
leads the market in investment banking, commercial banking and financial services.

Strong liquidity and capital: JPMC’s liquidity and capital position are really strong.
JPMC’s deposits increased and loans decreased in the period 2008-2013 and thus
company’s deposits-to-loans ratio increased to 174%.

Diversified revenue streams: JPMC has a diversified and balanced revenue stream with
revenue shared by 5 different business segments which are corporate and investment
banking, consumer and community banking, asset management, commercial banking
and corporate entity.

Weakness~

Over dependence on certain markets: JPMC is heavily dependent on North America for a
major portion of its revenues (over 65%), especially the US. Such over dependence on
the as single market makes the company vulnerable to any economic or business
slowdown in that market.
Fluctuating markets: JPMC is susceptible to fluctuating markets and is subject to a
vulnerability of the markets and hence is unstable in such circumstances.

Opportunity ~

Positive outlook for asset management: The asset management industry is growing
leaps and bounds globally and is set to reach $102 trillion by 2020 with a CAGR of about
6 percent. JPMC is well equipped to be benefitted by the growth in asset management
industry.

Growing Credit Card market: Credit card circulation around the world and especially in
the US has been growing and with it, Chase cards are also been used more. JPMC has
the potential to be benefitted by this growth as well.

Threat ~
Regulatory challenges: Financial institutions worldwide have been challenged constantly
by changing regulations, which increases compliance costs for the companies and thus
affects operating margins.

A threat of Financial Crisis: Any recession or financial crisis affects financial institutions
the most and hence any financial crisis will certainly impact JPMC negatively.

ANALYSIS ~
Addressing some points given in the weakness and threats section
● it’s dependency on North America gives us an advantage as the stock provided to
us is listed in the American stock exchange
● Fluctuationg markets gives us an opportunity in investing in the short term due to
factors like sudden growth and frequent returns
● They have the independence they need but the tools are lacking. I would like to
see central banks have the ability to push interest rates well into negative territory
in a deep emergency, not in normal times, as a way to try to stimulate the
economy.
●
● It would have been much more effective than quantitative easing, forward
guidance, these obscure things that they were doing that had some effect, but
most studies show the effect was pretty limited