Lazard Company Profile
Lazard Ltd Shs A (LAZ) is a financial advisory and asset management firm. The company has a diverse set of clients around the globe including corporations, governments, institutions, partnership, and individuals. The company is currently operating from 42 cities in key business and financial centers across 27 countries throughout North America, Europe, Asia, Australia, the Middle East, and Central and South America. Moreover, LAZ has 2,610 employees as of 2015.
Lazard Ltd Shs A (LAZ) Extended Graph Analysis
A. LAZ CASH FLOW
|Net cash provided by operating activities||Net cash used for investing activities||Net cash provided (used for) financing activities||Capital expenditure||Free Cash Flow|
- Cash from operating activities is $795.6 million.
- And the cash from investing activities is -$36 million.
- In addition, the net cash provided by (used for) financing activities is -$519 million.
- While, capital expenditure is -$36 million.
- Likewise, free cash flow is $831.6 million.
- The five years of growth of cash from operating activities was 100 percent.
- Net cash used for investing activities are purchases of property, plant, and equipment.
- In addition, the net cash used for financing activities is long-term debt repayment, repurchase of treasury stock, and cash dividend payments.
- While, capital expenditures are purchases of property, plant, and equipment.
- Likewise, free cash flow has 88 percent growth in five years.
Lazard is capable of generating sufficient cash for its business operation.
Overall, Lazard is generating sufficient cash revenue for the business operation. In addition, the company was able to purchase properties, plant, and equipment for the operations. Moreover, the company was able to pay their long-term debt, repurchase treasury stock and cash dividend payments. Finally, free cash flow is growing.
B. LAZ BALANCE SHEET
|Cash and Cash Equivalent||Current Assets||Total Assets||Current Liabilities||Total liabilities||Equity||Retained Earnings||Total Debt||Working Capital|
- Cash and cash equivalent was $853.9 million in 2016.
- And the current assets were $1.9 billion IN 2016.
- In addition, total assets were $4.3 billion IN 2016.
- While the current liabilities were $587 million IN 2016.
- On the other hand, total liabilities were $3.0 billion IN 2016.
- Moreover, retained earnings were $1.1 billion IN 2016.
- And total equity was $1.3 billion IN 2016.
- Rather, working capital was $1.3 billion IN 2016.
- Total debt was $1.2 billion IN 2016.
- Cash and cash equivalent have negative growth of 34 percent from 2011 at $436 million.
- And the current assets have negative growth of 21 percent from 2011 at $488 billion.
- Likewise, total assets have grown 40 percent in 2011 at $1.2 billion.
- On the other hand, current liabilities increased by 99 percent from 2011 at $293 million.
- And the total liabilities increased by 27 percent from 2011 at $645 million.
- In addition, retained earnings had increased by 309 percent from 2011 at $800 million.
- Similarly, total equity had increased by 79 percent from 2011 at $575 million.
- And the working capital was erratic in movement and has decreased 37 percent from 2011 at $781 million.
- Finally, the total debt had decreased by 8 percent from 2011 at $86 million.
As a result, the company is financially healthy and stable in the last six years of its business operations.
Overall, LAZ is liquid and capable of paying its short-term financial obligations using its cash and cash equivalents. Although its liability/equity ratio is 72/28 percent, respectively, meaning the company is using more of borrowed funds in its capital structures, in other words, creditors have more stake in the assets of the company than the investors. Moreover, total assets, retained earnings and equity were increasing year-over-year from 2012.
C. LAZ RATIOS
|Operating Margin||Net Margin||Return on Assets||Return on Equity||Asset Turnover||Financial Leverage||Debt to Equity|
- The current operating margin is 23 percent; averaging 14 percent from 2011.
- And the net margin was 17.43 percent; averaging 17 percent from 2011.
- In addition, return on assets was 10.20 percent; averaging 10.14 percent from 2011.
- Likewise, return on equity was 36.96 percent; averaging 43 percent from 2011.
- Further, asset turnover was 0.59, averaging 0.61 from 2011.
- And the debt to equity was 1.37; decreased by 0.47 from 2011 and averaging 1.37.
- Financial leverage was 3.80; decreased by 0.44 from 2011 and averaging 4.35.
- Operating margin shows that management is efficient and shows a decent leftover on revenue after deducting operating costs.
- And the net margin shows a decent return on revenue after deducting all expenses.
- On the other hand, return on assets shows a return of 10 cents for every dollar invested in assets.
- Moreover, return on equity shows a return of 37 percent on investments made in the stocks of LAZ.
- Likewise, asset turnover shows that LAZ is generating 59 cents of net sales for every dollar invested in the assets.
- While debt to equity shows that more assets are financed by debt than those financed by investors.
- Hence, financial leverage is total assets over stockholders equity. LAZ uses more debt in its capital structure.
It indicates that LAZ is profitable, however, the company is utilizing more on borrowed funds to finance assets.
Overall, the results of ratios show that the company is profitable in its business operations and can generate a decent return on the investments made by investors. However, creditors have more stake in the assets of the company.
D. LAZ INCOME AND MARKET
|Total Revenue||Revenues, net of int expense||Inc before inc taxes||Net Income||Intrinsic Value||Market Cap|
- The current revenue is $2.5 billion; grown 31 percent from 2011.
- The revenue net of interest expense was $2.46 billion; grown 24 percent from 2011.
- Income before income taxes was $569 million; grown 142 percent from 2011.
- Net income was $428 million; grown 145 percent in six years.
- The current intrinsic value was $6.1 billion; grown 343 percent in six years.
- Market capitalization was $5.3 billion; grown 45 percent in six years.
- Revenue is interest and dividend income.
- Interest expense is approximately 2 percent of total revenue.
- And the income before income taxes is 23 percent of total revenue.
- Likewise, net income is 17 percent of the total revenue.
- On the other hand, the Intrinsic value is increasing year-over-year at an average of 32 percent.
- Moreover, the growth in market capitalization year-over-year was 9 percent.
The income statement of LAZ shows that the company is capable of generating sufficient income for its daily operation. Moreover, in 2016 and 2017 shows that the stock of LAZ is undervalued.
LAZ is efficient in generating sufficient revenue and earnings for its operations. It indicates that the company is profitable and financially stable.
E. LAZ KEY EXECUTIVE COMPENSATION
|Key Executive Compensation||Chairman and CEO – Kenneth M. Jacobs||CEO of Lazard Asset Management – Ashish Bhutani||COO and CEO, Fianancial Advisory – Alexander F. Stern||General Counsel – Scott D. Hoffman|
- The key executive compensation was $36 million.
- The Chairman and CEO compensation are $ 11.6 million.
- And the CEO of Lazard Asset Management compensation was $9.5 million.
- In addition, the COO and CFO Financial Advisory compensation were $6.9 million.
- Moreover, the General Counsel compensation was $4 million.
- The key executive compensation represents 1.5 percent of the total revenue.
- The Chairman and CEO compensation represent 32 percent of the total key executive compensation.
- And the CEO of Lazard Asset Management compensation represents 26 percent of the total key executive compensation.
- While the COO and CFO Financial Advisory compensation represent 19 percent of the total key executive compensation.
- And the General Counsel compensation represents 11 percent of the total key executive compensation.
The key executive compensation is composed of basic salary, bonus, restricted stock award, and other compensation.
Laz is paying its key executives a decent salary plus incentives and benefits.
F. LAZ LOBBYING AND CONTRIBUTIONS
- The company spent lobbying year-over-year, and in 2016 lobbying was $360,000.
- Likewise, LAZ spent contributions and in 2016 contributions was $568.632.
- LAZ lobbying is spending made to candidates like Hillary Clinton and many others.
- In addition, the contributions of $568,632 are composed of the following:
- Contributions to candidates $351,148
- Contribution to Leadership PACs 7,900
- Contributions to parties 183,584
- Contributions to outside spending groups 26,000
Lazard is spending approximately 2 percent of revenue in lobbying and 2 percent of revenue in contributions.
Annually the company is spending lobbying to candidates and other figures. The company’s highest spending on lobbying was in 2009 in approximately $1 million.
G. LAZ FINANCIAL STRENGTH
- The calculated score in 2011 was 2.99.
- In 2012 score was 2.81.
- And in 2013 score was 3.68.
- Likewise in 2014 score was 4.12.
- While in 2015 score was 3.09
- Moreover, in 2016 score was 2.91
- Future score for 2017 was 2.98
- Finally, the future score in 2018 was 3.05
Lazard has an erratic score from 2011. A score of above 1.8 to 3 indicates that the company might be headed to bankruptcy and a score of above 3 is considered financially stable.
The future score in 2018 is based on the current trend movement in 2017. It shows from 2016 to 2017 there was an upward trend in the score, therefore, the future score is up at the same ratio.
Multiple financial ratios were combined to form the score, it is a gauge of the company’s financial strength and the likelihood of bankruptcy. It indicates that LAZ is considered financially stable, although, the score in 2017 fall less than 3. The score went up from 2016, therefore, the future score is based on the current trend.
Lazard is generating sufficient cash revenue for the business operation. The company was able to purchase properties, plant, and equipment for the operations. Moreover, the company was able to pay their long-term debt, repurchase treasury stock and cash dividend payments. Above all, free cash flow is growing.
Further, Lazard is liquid and capable of paying its short-term financial obligations using its cash and cash equivalents. Although its liability/equity ratio is 72/28 percent, respectively. Meaning, LAZ is using more of borrowed funds in its capital structures. In other words, creditors have more stake in the assets of the company than the investors. In addition, total assets, retained earnings and equity were increasing year-over-year from 2012.
The company shows profitability in its business operations and can generate a decent return on the investments made by investors. Moreover, the company is efficient in generating sufficient revenue and earnings for its operations. It indicates that the company is profitable and financially stable.
In addition, LAZ is paying its key executives a decent salary plus incentives and benefits. Further, the financial strength indicates that LAZ is considered financially stable, although, the score in 2017 fall less than 3, and the score went up from 2016, as a result, the future score is based on the current trend.
Researched and Written by Criselda