Comparing IP to UPM to Industry As you can see from the financial ratio table, there are numerous ratios at our disposal to compare companies. Simply, the ratio tells us how many times earnings the stock is selling for at market. From the above ratios, UPM is selling for only six times earnings, which promotes the stock is undervalued as compared to IP and the Industry.
Liquidity ratios provide the companies financial strength.
The current ratio compares current assets to current liabilities. From these results, IP has the highest liquidity, which allows a company flexibility in future planning and resolving current issues. Next, profitability ratios inform us of the companies annual performance. The Net Profit Margin shows us the amount of net profit retained from total revenue. The management ratios describe the results achieved by management, usually net income, in relation to assets, equity, or investment.