JP Morgan Financial Returns and Capital Constraints

In evaluating the financial position, a firm conducts an in-depth analysis of the financial returns and the associated risk to get an idea of how much the company can withstand. An evaluation of JP Morgan was done in this review to determine its current findings. The findings would show that the firm has a huge reliance on net profit margin to improve its ROE. The data further shows that the company is struggling to keep up with the changes in the market. However, JP has a huge footing to identify other avenues of growth especially considering its current share is overvalued making it unappealing to invest. In addition, it would wise to avoid this share considering the company is at logger heads with the government.

Expected Financial Returns and Associated Risks

  1. Return on Equity (ROE) for JP Morgan (Morningstar, 2020)
  2. Net Profit Margin

= net income / revenue

= 34.64 / 115.63 (billion)

= 0.3

Net profit margin shows that JP Morgan generated $0.3 in net income per ev...