The Distinction of Evaluation on Companies in Different Fields

Abstract

This paper explores the variations in Return on Equity (ROE) and Price-to-Sales Ratio among publicly traded companies across different time periods and market capitalizations. The analysis employs Linear Regression and Correlation Coefficients to examine the relationships between ROE, Price-to-Sales Ratio, Market Capitalization, and economic conditions during these periods. The findings reveal that Price-to-Sales Ratio serves as a reliable indicator of a company's market capitalization. Furthermore, companies within the same industry exhibit substantial disparities in Market Capitalization, ROE, Price-to-Sales Ratio, Price-to-Earnings (P/E) Ratio, and PEG Index due to differing corporate strategies and backgrounds. For instance, in the new energy sector, both BYD and NIO display a negative correlation between market capitalization, while Tesla contradicts this trend. This discrepancy is attributed to internal factors such as asset composition, liabilities, and shareholder structure, which significantly influence a company's financial performance. The Market Capitalization of these new energy companies is predicted to rise due to global interest in AI technology, with technology companies being at the forefront of AI development. In the technology sector, companies like Google have solidified their positions by advancing AI concepts. New entrants, like Apple, combining Artificial Intelligence and Robotics, are gaining consumer support, indicating potential Market Cap. growth. The fashion industry also demonstrates distinctive strategies, with companies like NIKE, Adidas, and Anta focusing on sustainability and carbon neutrality. Therefore, future company evaluations should consider both financial indices and a company's long-term vision and sustainability practices to predict their future value effectively.