July 18, 2014 (Chinavestor) This ratio analysis of Youku Tudou Inc. (NYSE:YOKU) completes two previous articles on Chinavestor. Food for thought was introduction and financial analysis was aimed at giving investors an independent view of the income statement and cash flows. This third piece is information obtained from the balance sheet of YOKU.
Price/Sales, Price/Book Value increased from 2012 to 2013, indicating a faster price increase compared with sales and book value increase. YOKU stock might be a little bit over-priced; EV/Sales increase year to year, indicating a faster increasing enterprise value than sales resulting from larger market capitalization.
Even though sales per share are increasing, EPS is continuously negative, bringing no value added for investors. Moreover, YOKU is not paying dividend over the recent three years, gaining no returns for the investors.
Asset Turnover ratios are increasing in 2013, which might be a good sign that the large investments in purchase of copyrights and equipment will have future revenue generating potential.
Current Ratio and Quick Ratio are well above 1; hence the company has no problem paying its short-term obligations.
YOKU generally uses little or no debt to finance its business; hence it is impossible for it to get into any financial default risk.