Northrop Grumman Corporation (NOC) Extended Graph Analysis

June 3rd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

NOC logo

Northrop Grumman Corporation (NOC) is an American Corporation that provides solutions in space,  aeronautics, defense and cyberspace worldwide. It is the third defense company in the US and the number two provider of information technology to the federal government and is the largest naval shipbuilder in the world. The company also provides information technology solutions to the government and commercial clients.

NOC was founded in 1994 in Denver, Colorado, United States, headquartered in Falls Church, Virginia, US. The company has more than 90,000 employees as of 2020.

 

Northrop Grumman Corporation (NOC) Extended Graph Analysis

 

1. NOC CASH FLOW

NOC CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 2,162,000,000 2,813,000,000 2,613,000,000 3,827,000,000 4,297,000,000 4,217,000,000
Net cash used for investing activities -431,000,000 -805,000,000 -889,000,000 -8,878,000,000 -1,207,000,000 -1,197,000,000
Net cash provided by (used for) financing activities -3,275,000,000 -1,786,000,000 6,960,000,000 -4,595,000,000 -2,424,000,000 -590,000,000
Capital expenditure -471,000,000 -920,000,000 -928,000,000 -1,249,000,000 -1,264,000,000 -1,252,000,000
Free cash flow 1,691,000,000 1,893,000,000 1,685,000,000 2,578,000,000 3,033,000,000 2,965,000,000
Working Capital 877,000,000 1,226,000,000 9,384,000,000 1,406,000,000 1,251,000,000 1,251,000,000


Facts:

  • Cash provided by operating activities was $4.2 billion in 2020.
  • Cash used for investing activities was -$1.2 billion in 2020.
  • Cash provided by (used for) financing activities was -$590 million in 2020.
  • Capital expenditures were -$1.252 billion in 2020.
  • Free cash flow was $3 billion in 2020.
  • Working capital was $1.251 in 2020.

Explanation

  • Cash flow from operations grew 95 percent in five years.
  • Cash from investing activities was investment in property, plant and equipment.
  • Net cash provided by (used for) financing activities were debt repayment, common stock repurchased, dividends paid and other financing activities.
  • Capital expenditure was investment in property, plant and equipment.
  • Free cash flow grew 75 percent in five years. 
  • Working capital grew 45 percent in five years.

Interpretation

The company was able to generate cash from operations in the last five years. There was free cash flow and working capital in the last five years.

 

2. NOC BALANCE SHEET

NOC BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 2,319,000,000 2,541,000,000 11,225,000,000 1,579,000,000 2,245,000,000
Current Assets 6,334,000,000 6,856,000,000 16,349,000,000 9,680,000,000 10,685,000,000
Net property, plant and equipment 3,064,000,000 3,588,000,000 4,225,000,000 6,372,000,000 8,423,000,000
Total non-current assets 18,120,000,000 18,758,000,000 18,568,000,000 27,973,000,000 30,404,000,000
Total assets 24,454,000,000 25,614,000,000 34,917,000,000 37,653,000,000 41,089,000,000
Current liabilities 5,457,000,000 5,630,000,000 6,965,000,000 8,274,000,000 9,434,000,000
Non-current liabilities 13,475,000,000 14,725,000,000 20,904,000,000 21,192,000,000 22,836,000,000
Total liabilities 18,932,000,000 20,355,000,000 27,869,000,000 29,466,000,000 32,270,000,000
Retained earnings 10,661,000,000 10,630,000,000 11,548,000,000 8,068,000,000 8,748,000,000
Stockholders equity 5,522,000,000 5,259,000,000 7,048,000,000 8,187,000,000 8,819,000,000

Facts:

  • Total cash was $2.2 billion in 2019.
  • Current assets were $10.7 billion in 2019.
  • Net property, plant and equipment was $8.4 billion in 2019.
  • Non-current assets were $30.4 billion in 2019.
  • Total assets were $41 billion in 2019.
  • Current liabilities were $9.4 billion in 2019.
  • Non-current liabilities were $23 billion in 2019.
  • Total liabilities were $32 billion in 2019.
  • Retained earnings were $8.7 billion in 2019.
  • Stockholders equity was $8.8 billion in 2019.

Explanation

  • Total cash represents 5 percent of total assets and 21 percent of current liabilities.
  • Current assets grew 67 percent and represent 26 percent of total assets.
  • Net property, plant and equipment grew 175 percent and it represents 21 percent of total assets.
  • Non-current assets grew 68 percent in five years and it represents 74 percent of total assets.
  • Total assets grew 68 percent in five years.
  • Current liabilities represent 29 percent of total liabilities.
  • Non-current liabilities represent 71 percent of total liabilities.
  • Total liabilities represent 79 percent of total liabilities and stockholders equity.
  • Retained earnings represents 99 percent of total stockholders equity.
  • Stockholders equity represents 21 percent of total liabilities and stockholders equity.

Interpretation

The company has enough resources to meet its current obligations. The company is using borrowed money more than the investor’s investment in the operation of its business.

 

3. INCOME AND MARKET

NOC INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 23,526,000,000 24,508,000,000 25,803,000,000 30,095,000,000 33,841,000,000 34,272,000,000
EBIT 3,076,000,000 3,193,000,000 3,299,000,000 3,780,000,000 3,969,000,000 3,967,000,000
Net Income 1,990,000,000 2,200,000,000 2,015,000,000 3,229,000,000 2,248,000,000 2,253,000,000
EBITDA 3,558,000,000 3,680,000,000 3,884,000,000 5,104,000,000 4,094,000,000 4,095,000,000
Intrinsic Value 36,610,000,000 54,474,519,777 89,267,000,000 79,353,016,543 178,677,000,000 354,091,000,000
Market Capitalization 34,232,000,000 40,995,000,000 53,426,000,000 41,782,000,000 57,735,000,000 55,124,000,000

Facts:

  • Revenue was $34 billion in 2020.
  • EBIT was $39.7 billion in 2020.
  • Net income was $2.3 billion in 2020.
  • EBITDA was $4 billion in 2020.
  • Intrinsic value was $354 billion the trailing twelve months 2020.
  • Market capitalization was $55 billion in the trailing twelve months 2020.

Explanation:

  • Revenue increased 46 percent in five years. 
  • EBIT increased 29 percent in five years and it represents 12 percent of revenue.
  • Net income grew 13 percent in five years and it represents 7 percent of total revenue.
  • EBITDA increased 15 percent of the revenue and it represented 12 percent of revenue.
  • Intrinsic value was greater by more than 500 percent of the market capitalization.
  • Market capitalization is only 16 percent of the intrinsic value.

Interpretation

Revenue and EBIT was increasing year-over-year and was capable of producing a fair net profit. Its earning per share was 13.38 in the trailing twelve months of 2020. NOC has a stable balance sheet.

 

4. NOC FINANCIAL RATIOS

NOC FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.92 0.97 0.85 0.83 0.86 0.83
Return on assets % 7.80 8.79 6.66 8.90 5.71 5.43
Return on equity % 31.20 40.81 32.75 42.39 26.44 25.31
Return on invested capital % 17.57 20.01 13.35 17.07 12.07 10.42
Debt/Equity 1.16 1.34 2.04 1.70 1.60 1.72

Facts:

  • Asset turnover was averaging 0.83 in 2020 trailing twelve months.
  • Return on assets was 5.43 percent in 2020 trailing twelve months.
  • Return on equity was 25.31 percent in 2020 trailing twelve months.
  • Return on invested capital was 10.42 percent in 2020 trailing twelve months.
  • Debt/Equity ratio was 1.72 in 2020 trailing twelve months.

Explanation

  • Asset turnover indicates that for every dollar invested in assets it generated 83 cents of sales.
  • Return on assets indicates that for every dollar invested in assets it generated 5.43 cents of net income.
  • Return on equity indicates that for every dollar invested in stockholders equity it generated a return of 0.2531 cents of net income.
  • Return on invested capital indicates that the company generated a return of 0.4142 cents per share.
  • Debt/Equity ratio means that the company has $1.72 in debt for every dollar invested in equity. Debt level is 172 percent of equity.

Interpretation

The company is efficient in using its assets to generate a good sales and return on net income. Financial ratios show a good return on the invested capital. The company is profitable.

 

5. NOC KEY EXECUTIVE COMPENSATION

NOC KEY EXECUTIVE COMPENSATION

  2015 2016 2017 2018 2019
Key Executive Compensation     
Salary 1,386,154 1,529,039 2,299,931 3,391,347 4,783,904
Bonus 0 0 100,000 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 6,200,145 6,499,836 10,250,040 20,899,981 26,499,659
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,654,000 2,504,000 2,963,000 5,880,000 10,044,000
Other Compensation 622,561 480,320 1,590,371 1,139,525 11,631,569
Total 9,883,642 11,213,415 17,960,756 31,310,853 46,384,546
Kathy J. Warden/Chairman of the Board, President and CEO 
Salary 701,077 772,500 807,116 963,462 1,488,462
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 3,200,053 3,499,856 3,499,993 9,999,869 13,000,159
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 814,000 1,272,000 1,061,000 1,920,000 4,509,000
Other Compensation 425,783 165,596 206,548 458,976 622,758
Total 5,161,675 5,910,172 5,962,672 13,342,307 20,307,994
Kenneth L. Bedingfield/Former Corporated VP and CFO    
Salary 685,077 756,539 790,192 811,154 834,385
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 3,000,092 2,999,980 3,250,106 3,500,008 3,499,779
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 840,000 1,232,000 1,041,000 1,304,000 1,401,000
Other Compensation 196,798 314,724 351,426 312,214 296,756
Total 4,721,967 5,303,243 5,432,724 5,927,376 6,031,920
Janis Pamiljans/Corporate VP and President, Aerospace Systems    
Salary 702,623 826,154 850,192
Bonus 100,000 0 0
Annual Other Income 0 0 0
Restricted Stock Award 3,499,941 3,500,008 3,499,779
Securities Options 0 0 0
LTIP Payout 0 0 0
Non-Equity Compensation 861,000 1,328,000 1,428,000
Other Compensation 1,032,397 241,318 356,125
Total 6,565,360 5,895,480 7,222,256
Mark A. Caylor/Corporate VP and President, Mission Systems 
Salary 790,577 850,192
Bonus 0 0
Annual Other Income 0 0
Restricted Stock Award 3,900,096 3,499,779
Securities Options 0 0
LTIP Payout 0 0
Non-Equity Compensation 1,328,000 1,428,000
Other Compensation 127,017 129,727
Total 6,145,690 6,794,344
Christopher T. Jones/Corporate VP and President, Technology Services 
Salary 790,673
Bonus 0
Annual Other Income 0
Restricted Stock Award 3,000,163
Securities Options 0
LTIP Payout 0
Non-Equity Compensation 1,278,000
Other Compensation 226,203
Total 6,028,032

Facts:

  • Total key executive compensation was $9,883,642 in 2015.
  • Total key executive compensation in 2016 was $11,213,415.
  • Key executive compensation in 2017 was $17,960,756.
  • Key executive compensation in 2018 was $31,310,853.
  • Executive compensation in 2019 was $46,384,546.

Explanation

  • Total key executive compensation represents 2 percent of the net income in 2019
  • Kathy J. Warden, CEO total compensation represents 44 percent of the total key executive compensation in 2019.
  • Kenneth L Bedingfield, CFO total compensation represents 13 percent of the total key executive compensation.
  • Janis Pamiljans, VP and President Aerospace System total compensation in 2019 represents 16 percent of total key executive compensation.
  • Mark A. Caylor, Corporate VP and President, Mission Systems total compensation for 2019 represents 15 percent of the total executive compensation.
  • Christopher T. Jones, Corporate VP and President, Technology Services total salary represents 13 percent of total key executive compensation compensation.

Interpretation

Total executive compensation includes salary, restricted stock award, non-equity compensation and other compensation.

 

6. NOC LOBBYING AND CONTRIBUTIONS

NOC LOBBYING ND CONTRIBUTIONS

PERIOD USD LOBBYING CONTRIBUTIONS
1998 6,120,000 6,120,000
1999 5,130,000 5,130,000
2000 7,000,000 7,000,000
2001 12,510,000 12,510,000
2002 11,770,000 11,770,000
2003 10,410,000 10,410,000
2004 12,650,000 12,650,000
2005 13,720,000 13,720,000
2006 16,830,000 16,830,000
2007 11,180,000 11,180,000
2008 20,930,000 20,930,000
2009 15,180,000 15,180,000
2010 15,740,000 15,740,000
2011 12,770,000 12,770,000
2012 20,437,387 17,540,000 2,897,387
2013 20,590,000 20,590,000
2014 14,271,739 10,216,960 4,054,779
2015 11,020,000 11,020,000
2016 16,284,706 12,050,000 4,234,706
2017 14,460,000 14,460,000
2018 19,987,039 14,390,000 5,597,039
2019 17,314,233 13,620,000 3,694,233
2020 13,620,000 13,620,000

Facts:

Northrop Grumman Corp is incurring lobbying and contributions from 1998 to the present date.

Explanation:

A note from Center for Responsive Politics, OpenSecrets.org, quoted as follows:

“Campaign finance totals for the current election cycle were released by the FEC on May 21, 2020 and by the IRS on April 03, 2019, lobbying data was released by the Senate Office of Public Records on March 19, 2019, outside spending data was released by the FEC on May 29, 2020, and personal finances data was released by the House, Senate, and US Office of Government Ethics starting in June 2011.”

Interpretation

The amount of lobbying and contributions spent by Northrop Grumman Corp. varies per cycle.

 

7. NOC FINANCIAL STRENGTH

NOC FINANCIAL STRENGTH

DATA

Working Capital $1,251,000,000
Total Assets $41,089,000,000
Sales $34,272,000,000
EBIT $3,967,000,000
Market value of equity $54,330,100,000
Book value of total liabilities $32,270,000,000
Retained earnings $8,748,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.03 1.2 0.04
B – Retained Earnings / Total Assets 0.21 1.4 0.30
C – EBIT / Total Assets 0.10 3.3 0.32
D – Market Value of Equity / Book Value of Total Liabilities 1.68 0.6 1.01
E – Sales / Total Assets 0.83 1 0.83
Z-Score 2.50


Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The calculated Z-Score of Northrop Grumman was 2.50.Dr. Altman’s grading scale of below 3.0 indicates that the company is likely to declare bankruptcy in near future. Altman score weights different profitability and liquidity metrics to arrive at the overall score. It is then compared to his grading scale. The formula does not reflect cash flows, the company might be able to pay liabilities however, may have difficulty in the operations and may gradually lead to insolvency.

Overview

Northrop Grumman Corporation is financially strong due to its innovative and advanced technology solutions. The company focused on high technology solutions for its customers. The company was able to solve critical problems in space, aeronautics, defense and cyberspace.

CITATION

https://www.northropgrumman.com/

https://www.morningstar.com/stocks/xnys/noc/quote

https://www.opensecrets.org/orgs/summary?id=D000000170

Researched and written by Criselda

Texas Instruments Inc (TXN) Extended Graph Alalysis

May 18th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

TXN LOGO

Texas Instruments Incorporated (NASDAQ: TXN) designs and manufactures, tests and sells analog and embedded semiconductor chips around the world. The company was founded in 1930 as Geophysical Service Inc., an oil and gas exploration company however in the 1950s became officially Texas Instruments Incorporated a semiconductor conductor industry. Headquartered in Dallas, Texas in the United States.

The company market in electronic systems includes industrial, automotive, personal electronics, communications equipment and enterprise systems.

 

Texas Instruments (TXN) Extended graph Analysis

 

1. TXN CASH FLOW

TXN CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 4,268,000,000 4,614,000,000 5,363,000,000 7,189,000,000 6,649,000,000 6,393,000,000
Net cash used for investing activities -302,000,000 -650,000,000 -1,127,000,000 -78,000,000 -1,920,000,000 -2,267,000,000
Net cash provided by (used for) financing activities -4,165,000,000 -3,810,000,000 -3,734,000,000 -6,329,000,000 -4,730,000,000 -5,328,000,000
Capital expenditure -551,000,000 -531,000,000 -695,000,000 -1,131,000,000 -847,000,000 -757,000,000
Free cash flow 3,717,000,000 4,083,000,000 4,668,000,000 6,058,000,000 5,802,000,000 5,636,000,000
Working Capital 4,519,000,000 5,193,000,000 6,476,000,000 5,623,000,000 6,638,000,000 6,638,000,000

Facts:

  • Cash provided by operating activities was $6 billion in the trailing twelve months.
  • Net cash from investing activities was $-2 billion in the trailing twelve months.
  • Cash provided by (used for) financing activities was $-5 billion in the trailing twelve months.
  • Capital expenditures were $-757 million in the trailing twelve months.
  • Free cash flow was $6 billion in the trailing twelve months.
  • Working capital was $7 billion in the trailing twelve months.

Explanation:

  • Cash from operations has a growth rate of 50% in five years, moreover, the management was able to generate cash from operations in the last five years.
  • Cash from investing activities were investment in property, plant and equipment, and purchases of investments.
  • The cash provided by financing activities were common stock repurchased, dividends paid and other financing activities.
  • Capital expenditures was investment in property, plant and equipment.
  • Free cash flow grew 52 percent in five years.
  • Working capital grew 47 percent in five years.

Interpretation

The management is efficient and capable of producing cash from operations, positive free cash flow and working capital in the last five years.

 

2. TXN BALANCE SHEET

TXN BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 3,218,000,000 3,490,000,000 4,469,000,000 4,233,000,000 5,387,000,000
Current Assets 7,074,000,000 7,457,000,000 8,734,000,000 8,097,000,000 8,761,000,000
Net property, plant and equipment 2,596,000,000 2,512,000,000 2,664,000,000 3,183,000,000 3,303,000,000
Total non-current assets 9,156,000,000 8,974,000,000 8,908,000,000 9,040,000,000 9,257,000,000
Total assets 16,230,000,000 16,431,000,000 17,642,000,000 17,137,000,000 18,018,000,000
Current liabilities 2,555,000,000 2,264,000,000 2,258,000,000 2,474,000,000 2,123,000,000
Non-current liabilities 3,729,000,000 3,694,000,000 5,047,000,000 5,669,000,000 6,988,000,000
Total liabilities 6,284,000,000 5,958,000,000 7,305,000,000 8,143,000,000 9,111,000,000
Retained earnings 31,176,000,000 33,107,000,000 34,662,000,000 37,906,000,000 39,898,000,000
Stockholders equity 9,946,000,000 10,473,000,000 10,337,000,000 8,994,000,000 8,907,000,000

Facts:

  • Total cash was $5 billion in 2019.
  • Current assets were $9 billion in 2019.
  • Net property, plant and equipment was $3 billion in 2019.
  • Non-current assets were $9 billion in 2019.
  • Total assets were $18 billion in 2019.
  • Current liabilities were $2 billion in 2019.
  • Non-current liabilities were $7 billion in 2019.
  • Total liabilities were $9 billion in 2019.
  • Retained earnings were $40 billion in 2019.
  • Stockholders equity was $9 billion in 2019.

Explanation

  • Total cash grew 67 percent in five years and it represents 30 percent of the total assets.
  • Current assets grew 24 percent in five years and it represented 49 percent of total assets.
  • Net property, plant and equipment grew 27 percent in five years and it represented 18 percent of total assets.
  • Non-current assets represented 51 percent of the total assets.
  • Total assets grew 11 percent in five years.
  • Current liabilities represent 23 percent of total liabilities.
  • Non-current liabilities represent 77 percent of total liabilities.
  • Total liabilities represents 51 percent of total liabilities and stockholders equity.
  • Retained earnings increased year-over-year in the last five years.
  • Stockholders equity represents 49 percent of total liabilities and stockholders equity.

Interpretation

The company is liquid and stable, and capable of meeting current obligations in due time. Retained earnings was huge compared to total assets, it was over 121 percent of the total assets. The shareholders have 50 percent stake in the total assets and creditors have also 50 percent stake in total assets.

 

3. TXN INCOME AND MARKET

TXN INCOME AND MARKET

2015 2016 2017 2018 2019 TTM
Revenue 13,000,000,000 13,370,000,000 14,961,000,000 15,784,000,000 14,383,000,000 14,118,000,000
EBIT 4,532,000,000 5,103,000,000 6,531,000,000 7,034,000,000 5,975,000,000 5,811,000,000
Net Income 2,986,000,000 3,595,000,000 3,682,000,000 5,580,000,000 5,017,000,000 4,976,000,000
EBITDA 5,439,000,000 5,965,000,000 7,062,000,000 7,765,000,000 6,948,000,000 6,794,000,000
Market Capitalization 55,428,000,000 72,932,000,000 102,932,000,000 89,317,000,000 119,570,000,000 105,526,000,000
Intrinsic Value 99,968,027,187 125,687,492,273 171,079,397,912 158,840,889,167 232,349,843,836 268,195,183,423

Facts:

  • Revenue was $14 billion in the trailing twelve months.
  • EBIT was $6 billion in the trailing twelve months.
  • Net income was $5 billion in the trailing twelve months.
  • EBITDA was $7 billion the trailing twelve months.
  • Market capitalization was $105.526 billion in the trailing twelve months.
  • Intrinsic value was $268.195 billion in the trailing twelve months.

Explanation

  • Revenue grew 9 percent in five years.
  • EBIT represents 41 percent of revenue.
  • Net income represents 35 percent of revenue and it grew 67 percent in five years.
  • EBITDA represents 48 percent of revenue.
  • Market capitalization grew 90 percent in five years.
  • Intrinsic value was over 154 percent of the market capitalization.

Interpretation

The management was able to generate sufficient revenue for its business operations and net income represents one-third of the revenue which is impressive. The stock price of TXN was undervalued.

 

4. TXN FINANCIAL RATIOS

TXN FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Asset turnover (average) 0.77 0.82 0.88 0.91 0.82 0.81
Return on assets % 17.34 21.74 21.41 31.84 28.54 28.66
Return on equity % 28.94 34.77 35.06 57.29 56.05 61.23
Return on invested capital % 20.6 25.60 25.94 39.62 35.59 35.89
Debt/Equity 0.31 0.28 0.34 0.48 0.62 0.71

Facts:

  • Asset turnover was averaging 0.81 in the trailing twelve months.
  • Return on assets  was 28.66 percent in the trailing twelve months.
  • Return on equity was 61.23 percent in the trailing twelve months.
  • Return on invested capital was 35.89 percent in the trailing twelve months.
  • Debt to Equity ratio was 0.71 in the trailing twelve months.

Explanation:

  • Asset turnover indicates that TXN is generating 81 cents of sales for every dollar invested in assets.
  • Return on assets indicates that the company generates 28.66 cents of net income for every dollar invested in assets.
  • Return on equity indicates that for every dollar invested in common equity it generated 61.23 cents of net income.
  • Debt/Equity ratio indicates that TXN has $0.71 in debt for every dollar of assets.

Interpretation

The financial ratios show that Texas Instruments is in good financial health and liquid. The company was able to generate a good return on the investments made.

 

5. KEY EXECUTIVE COMPENSATION

TXN KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 1,140,250 1,164,083 2,375,087 3,774,169 4,102,917
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 4,900,017 4,900,048 9,300,131 12,800,422 13,600,237
Securities Options 4,900,006 4,900,007 8,300,033 12,800,070 13,600,039
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 3,653,877 3,682,817 6,050,018 9,104,833 8,580,583
Other Compensation 317,702 325,510 407,131 642,455 0
Total 14,925,802 15,080,069 25,090,172 39,123,826 42,670,368
Richard K. Templetion/ Chairman of the Board, President and Chief Executive Officer   
Salary 1,140,250 1,164,083 1,188,004 1,131,252 1,295,833
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 4,900,017 4,900,048 5,500,010 6,000,091 6,500,045
Securities Options 4,900,006 4,900,007 5,500,004 600,019 6,500,012
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 3,653,877 3,682,817 3,862,601 4,026,250 3,809,167
Other Compensation 317,702 325,510 329,825 418,612 326,162
Total 14,925,802 15,080,069 16,546,722 17,576,224 18,633,807
Rafael R. Lizardi/ SVP and CFO     
Salary 488,333 591,667 655,000
Bonus 0 0 0
Annual Other Income 0 0 0
Restricted Stock Award 2,000,047 1,200,084 1,500,058
Securities Options 1,000,013 1,200,013 1,500,006
LTIP Payout 0 0 0
Non-Equity Compensation 947,667 1,118,333 1,081,000
Other Compensation 60,814 77,072 125,671
Total 4,496,874 4,187,169 4,861,735
R. Gregory (greg) Delagi / Former Senior VP    
Salary 698,750 713,750 728,750.00
Bonus 0 0 0.00
Annual Other Income 0 0 0.00
Restricted Stock Award 1,800,074 1,800,071 1,800,028.00
Securities Options 1,800,016 1,800,008 1,800,003.00
LTIP Payout 0 0 0.00
Non-Equity Compensation 1,239,750 1,292,750 1,125,750.00
Other Compensation 16,492 5,500 6,045.00
Total 7,046,576 5,613,956 7,414,651.00
Niels Anderskouv / Senior VP     
Salary 668,750 711,667.00
Bonus 0 0.00
Annual Other Income 0 0.00
Restricted Stock Award 1,900,088 1,900,053.00
Securities Options 1,900,015 1,900,009.00
LTIP Payout 0 0.00
Non-Equity Compensation 1,333,750 1,282,333.00
Other Compensation 89,458 103,898.00
Total 5,892,061 5,897,960.00
Haviv Ilan / Senior Vice President     
Salary 668,750 711,667.00
Bonus 0 0.00
Annual Other Income 0 0.00
Restricted Stock Award 1,900,088 1,900,053.00
Securities Options 1,900,015 1,900,009.00
LTIP Payout 0 0.00
Non-Equity Compensation 1,333,750 1,282,333.00
Other Compensation 51,813 68,153.00
Total 5,854,416 5,862,215

Facts:

  • The total key executive compensation in 2015 was $ 14,925,802.
  • Total key executive compensation in 2016 was $15,080,069.
  • Total key executive compensation in 2017 was $16,546,722.
  • Key executive compensation in 2018 was $39,123,826.
  • Key executive compensation in 2019 was $42,670,368.

Explanation

  • Total executive compensation represents 0.85 percent of the net income in 2019.
  • Richard K. Templetion, CEO compensation represents 44 percent of the total executive compensation in 2019.
  • Rafael R. Lizardi, CFO compensation represents 11 percent of the total executive compensation in 2019.
  • R. Gregory (greg) Delagi, Former Senior VP compensation represents 17 percent of the total executive compensation in 2019.
  • Niels Anderskouv / Senior VP compensation represents 14 percent of the total executive compensation in 2019.
  • Haviv Ilan / Senior Vice President compensation represents 14 percent of the total executive compensation in 2019.

Interpretation

Total executive compensation includes salary, restricted stock award, securities options, non-equity compensation and other compensation.

 

6. TXN LOBBYING AND CONTRIBUTIONS

TXN LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT PERIOD AMOUNT
1998 $2,226,000 2010 $1,600,000
1999 $1,910,000 2011 $1,880,000
2000 $2,200,000 2012 $1,810,000
2001 $2,090,000 2013 $1,740,000
2002 $2,600,000 2014 $1,680,000
2003 $1,740,000 2015 $2,050,000
2004 $2,120,000 2016 $1,860,000
2005 $2,200,000 2017 $2,160,000
2006 $2,310,000 2018 $1,960,000
2007 $2,760,000 2019 $1,540,000
2008 $2,140,000 2020 $1,739,631
2009 $1,800,000

Facts:

Texas Instruments Inc is spending lobbying and contributions annually and record shows above lobbying from 1998 to 2019.

Explanation:

Note from OpenSecret.org Center for Responsive Politics, quoted below:

NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on April 22, 2020 and includes spending from January 1 – March 31. Prior years include spending from January through December.

Interpretation

Annually the lobbying may increase or decrease depending on the federal government on how much attention they are giving their issues. 

 

7. TXN FINANCIAL STRENGTH

TXN FINANCIAL STRENGTH

DATA

Working capital $6,638,000,000
Total assets $18,018,000,000
Sales $14,118,000,000
EBIT $5,811,000,000
Market value of equity $106,526,000,000
Book value of total liabilities $9,111,000,000
Retained earnings $39,898,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.37 1.20 0.44
B – Retained Earnings / Total Assets 2.21 1.40 3.10
C – EBIT / Total Assets 0.32 3.30 1.06
D – Market Value of Equity / Book Value of Total Liabilities 11.69 0.60 7.02
E – Sales / Total Assets 0.78 1.00 0.78
Z-Score     12.41

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The calculated Z-Score of Texas Instruments Inc was 12.41. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Texas Instruments has a strong financial health and is very far from insolvency.

Overview

Texas Instruments Inc is stable and healthy, the income statement shows that the company is profitable in the last five years of operations. The management is very efficient in generating sufficient and impressive revenue for its normal business operations in five years. The stock price of TXN is undervalued at the time this article was published and might be a good candidate for a Buy.

 

CITATION

http://www.ti.com/about-ti/company/history.html

https://www.morningstar.com/stocks/xnas/txn/quote

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000000722

Researched and written by Criselda

Microsoft Corporation (MSFT) Extended Graph Analysis

May 4th, 2020 Posted by Extended Analysis No Comment yet

Microsoft Corporation (MSFT) Extended Graph Analysis

Company Profile

MSFT logo

Microsoft Corporation (Nasdaq: MSFT) is a technology American multinational corporation headquartered in Redmond, Washington. According to Wikipedia, it develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.

The company enables digital transformation that empowers users and organizations in achieving more. Microsoft has a variety of products and services including Microsoft Office, Microsoft Word, Microsoft Excel, Onedrive, Microsoft Outlook, Microsoft PowerPoint, Microsoft Teams, Microsoft Windows, Microsoft Azure, Microsoft Visual Studio, Microsoft Onenote, Microsoft Exchange Server, Xbox and Microsoft System Center Configuration Manager.

Microsoft Corporation (MSFT) Extended Graph Analysis

 

1. MSFT CASH FLOW

MSFT CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activites 29,080,000,000 33,325,000,000 39,507,000,000 42,884,000,000 52,185,000,000 54,126,000,000
Net cash used for investing activities -23,001,000,000 -23,950,000,000 -46,781,000,000 6,061,000,000 -15,773,000,000 -16,432,000,000
Net cash provided by (used for) financing activities -9,080,000,000 -8,393,000,000 8,408,000,000 -33,590,000,000 -36,887,000,000 -35,411,000,000
Capital expenditure -5,944,000,000 -8,343,000,000 -8,129,000,000 -11,632,000,000 -13,925,000,000 -13,546,000,000
Free cash flow 23,136,000,000 24,982,000,000 31,378,000,000 32,252,000,000 38,260,000,000 40,580,000,000
Working Capital 74,854,000,000 80,303,000,000 95,324,000,000 111,174,000,000 106,132,000,000 106,132,000,000

Facts:

  • Cash provided by operating activities was $54 billion in the trailing twelve months 2020.
  • Cash used for investing activities was $-16 billion in 2020 trailing twelve months.
  • Net cash provided by (used for) financing activities was $-35 billion in 2020 trailing twelve months.
  • Capital expenditure was $-14 billion in 2020 trailing twelve months.
  • Free cash flow was $41 billion in 2020 trailing twelve months.
  • Working capital was $106 billion in 2020 trailing twelve months.

Explanation

  • Cash from operating activities increased year-over-year and had a growth rate of 86 percent in five years.
  • Cash used for investing activities were investment in property, plant and equipment; and purchases of investment.
  • Net cash provided by (used for) financing activities were debt repayment, common stock repurchase and dividend paid.
  • Capital expenditures were investment in property, plant and equipment.
  • Free cash flow increased year-over-year and had a growth rate of 75 percent in five years.
  • Working capital had a growth rate of 42 percent in five years.

Interpretation

MSFT is efficient in maintaining cash from operations in the last five years and it is increasing year-over-year as the net income increases as well. Moreover, the company is capable of generating a positive cash and working capital in the last five years.

 

2. MSFT BALANCE SHEET

MSFT BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 96,526,000,000 113,240,000,000 132,981,000,000 133,768,000,000 133,819,000,000
Current Assets 124,712,000,000 139,660,000,000 159,851,000,000 169,662,000,000 175,552,000,000
Net property, plant and equipment 14,731,000,000 18,356,000,000 23,734,000,000 36,146,000,000 43,856,000,000
Total non-current assets 51,511,000,000 54,034,000,000 81,235,000,000 89,186,000,000 111,004,000,000
Total assets 176,223,000,000 193,694,000,000 241,086,000,000 258,848,000,000 286,556,000,000
Current liabilities 49,858,000,000 59,357,000,000 64,527,000,000 58,488,000,000 69,420,000,000
Non-current liabilities 46,282,000,000 62,640,000,000 104,165,000,000 117,642,000,000 114,806,000,000
Total liabilities 96,140,000,000 121,697,000,000 168,692,000,000 176,130,000,000 184,226,000,000
Retained earnings 9,096,000,000 2,282,000,000 2,648,000,000 13,682,000,000 24,150,000,000
Stockholders equity 80,083,000,000 71,997,000,000 72,394,000,000 82,718,000,000 102,330,000,000
Total Liabilities and Stockholders Equity 176,223,000,000 193,694,000,000 241,018,600,000 258,848,000,000 286,556,000,000

Facts:

  • Total cash was $134 billion in 2019.
  • Current assets were $176 billion in 2019.
  • Net property, plant and equipment was $44 billion in 2019.
  • Total non-current assets were $111 billion in 2019.
  • Total assets were $287 billion in 2019.
  • Current liabilities were $69 billion in 2019.
  • Non-current liabilities were $184 billion in 2019.
  • Total liabilities were $184 billion in 2019.
  • Retained earnings were $24 billion in 2019.
  • Stockholders equity was $102 billion in 2019.

Explanation:

  • Total cash increased year-over-year and has a growth rate of 39 percent in five years.
  • Total cash represents 47 percent of total assets.
  • Current assets increased year-over-year and have a growth rate of 61 percent in five years.
  • Current assets represent 61 percent of total assets.
  • Net property, plant and equipment increased year-over-year and have grown 198 percent in five years.
  • Net property, plant and equipment represent 15 percent of the total assets.
  • Total non-current assets increased year-over-year and grew 116 percent in five years.
  • Non-current assets represent 39 percent of total assets.
  • Total assets increased year-over-year and it grew 63 percent in five years.
  • Current liabilities represent 38 percent of total liabilities.
  • Non-current liabilities represent 62 percent of total liabilities.
  • Current liabilities represent 64 percent of total liabilities and equities.
  • Retained earnings represent 24 percent of total equities.
  • Total liabilities represent 64 percent of total liabilities and stockholders equity.
  • Stockholders equity represents 36 percent of total liabilities and stockholders equity.

Interpretation

The balance sheet is stable and the company is liquid; its total cash is more than enough to pay for its current obligations.

3. MSFT INCOME AND MARKET

MSFT INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 93,580,000,000 85,320,000,000 89,950,000,000 110,360,000,000 125,843,000,000 134,249,000,000
EBIT 28,172,000,000 21,292,000,000 22,632,000,000 35,058,000,000 42,959,000,000 49,323,000,000
Net Income 12,193,000,000 16,798,000,000 21,204,000,000 16,571,000,000 39,240,000,000 44,323,000,000
EBITDA 25,245,000,000 27,616,000,000 34,149,000,000 49,468,000,000 58,056,000,000 64,508,000,000
Market Capitalization 439,679,000,000 483,160,000,000 659,906,000,000 780,362,000,000 1,200,255,000,000 1,303,800,000,000
Intrinsic Value 401,084,844,920 573,333,286,219 993,423,476,928 2,363,321,837,249 3,311,254,516,335 4,673,490,334,265

Facts:

  • Revenue was $134 billion in  2020.
  • EBIT was $49 billion in 2020.
  • Net income was $44 billion in 2020.
  • EBITDA was $65 billion in 2020.
  • The market capitalization was $1.304 trillion in the trailing twelve months of 2020.
  • Intrinsic value was $4.7 trillion in the trailing twelve months 2020.

Explanation

  • Revenue grew 43 percent in five years.
  • EBIT grew 75 percent in five years and represented 37 percent of revenue.
  • Net income grew 264 percent in five years and it represented 33 percent of revenue.
  • EBITDA grew 131 percent in five years and it represented 48 percent of revenue.
  • Market capitalization is lesser than the intrinsic value.
  • Intrinsic value is higher than the market capitalization.
  • The stock price of MSFT is undervalued.

Interpretation

Microsoft Corporation has been profitable in the last five years. The company was able to maintain a net income of one/third of its revenue. Market capitalization was lesser than the intrinsic value of the stock. In other terms the stock price of Microsoft was undervalued.

 

4. MSFT FINANCIAL RATIOS

MSFT FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.54 0.46 0.41 0.44 0.46 0.50
Return on assets % 7.00 9.08 9.75 6.63 14.39 16.37
Return on equity % 14.36 22.09 29.37 21.37 42.41 43.83
Return on invested capital % 11.16 14.81 16.39 11.49 24.13 26.08
Debt/Equity 0.35 0.57 1.05 0.94 0.71 0.64

Facts

  • Asset turnover was averaging 0.50 in 2020.
  • Return on assets was 16.37 percent in 2020.
  • Return on equity was 43.83 percent in 2020.
  • Return on invested capital was 26.08 percent in 2020.
  • Debt/Equity ratio was 0.64 in 2020.

Explanation:

  • Asset turnover ratio means that every dollar invested in assets it generates $0.50 in sales.
  • Return on assets indicate that every dollar invested in the asset it generated $0.16 net income.
  • Return on equity indicates that every dollar invested in equity it generated 44 cents in profit.
  • Return on invested capital indicates that the company generated $0.26 profit for every dollar invested in capital.
  • Debt/Equity indicate that for every dollar in equity the company has 64 cents in leverage.

Interpretation

Financial ratios indicate that the company was efficient in producing a good return on the investments made in equity, assets and capital.

 

5. MSFT KEY EXECUTIVE COMPENSATION

MSFT KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 3,065,189 3,339,584 4,554,804 4,723,000 5,654,666
Bonus 11,393,000 106,949,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 33,866,330 29,339,737 43,286,384 48,925,444 76,879,883
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 18,830,384 20,055,199 22,993,561
Other Compensation 58,991 65,442 419,890 459,964 500,139
Total 48,383,510 43,393,763 67,091,602 74,163,607 106,028,249
Satya Nadella, CEO and Director
Salary 1,200,000 1,200,000 1,450,000 1,500,000 2,333,333
Bonus 4,320,000 4,464,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 12,761,263 12,013,927 11,434,557 16,807,208 29,668,651
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 7,032,406 7,425,000 10,796,868
Other Compensation 13,007 14,104 97,189 111,055 111,363
Total 18,294,270 17,692,031 20,014,152 25,843,263 42,910,215
Amy Hood, Executive VP and CFO
Salary 675,985 731,250 852,917 875,000 958,333
Bonus 1,978,000 2,304,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 6,090,606 7,326,650 7,015,071 10,232,265 15,316,653
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 3,624,896 3,718,750 3,855,040
Other Compensation 10,372 12,730 89,260 98,442 97,608
Total 8,754,963 10,374,630 11,582,144 14,924,457 20,227,634
Bradford L. Smith, President and Chief Legal Officer
Salary 650,000 704,167 785,833 800,000 850,000
Bonus 1,300,000 1,972,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 4,833,835 5,915,948 6,193,370 9,033,868 13,045,437
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 3,241,543 3,566,700 3,366,148
Other Compensation 16,847 18,497 98,989 111,055 111,412
Total 6,800,682 8,610,612 10,319,735 13,511,623 17,372,997
Jean-philippe Courtois, EVP and President Global Sales Marketing and Operations
Salary 751,054 833,000 798,000
Bonus 0 0 0
Annual Other Income 0 0 0
Restricted Stock Award 14,735,464 7,149,549 11,309,474
Securities Options 0 0 0
LTIP Payout 0 0 0
Non-Equity Compensation 2,762,884 3,092,513 2,889,049
Other Compensation 45,214 51,187 88,231
Total 18,294,616 11,126,249 15,084,754
Margaret L. Johnson, EVP, Business Development
Salary 539,204 704,167 715,000 715,000 715,000
Bonus 3,795,000 1,909,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 10,180,626 4,083,212 3,907,922 5,702,554 7,539,668
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 2,168,795 2,252,236 2,086,456
Other Compensation 18,765 20,111 89,238 88,225 91,525
Total 14,533,595 6,716,490 6,880,955 8,758,015 10,432,649

Facts:

  • The total key executive compensation in 2015 was $48,383,510.
  • Total key executive compensation in 2016 was $43,393,763.
  • Total key executive compensation in 2017 was $67,091,602.
  • Key executive compensation in 2018 was $74,163,607.
  • The total key executive compensation in 2019 was $106,028,249.

Explanation:

  • Total key compensation represents 0.24 percent of the net income in 2019.
  • Total compensation of Satya Nadella, CEO and Director represents 40 percent of the total key executive compensation in 2019.
  • Total compensation of Amy Hood, Executive VP and CFO represents19 percent of the total key executive compensation in 2019.
  • Total compensation of Bradford L. Smith, President and Chief Legal Officer representing 16 percent of the total compensation in 2019.
  • Total compensation of Jean-philippe Courtois, EVP and President Global Sales Marketing and Operations represent 14 percent of the total compensation in 2019.
  • Total compensation of Margaret L. Johnson, EVP, Business Development represents 10 percent of the total compensation in 2019.

Interpretation

The total key executive compensation increased year-over-year at a different level. Compensation includes salary, bonus, restricted stock award and non-equity compensation and some other income.

 

6. MSFT LOBBYING AND CONTRIBUTIONS

MSFT LOBBYING AND CONTRIBUTIONS

PERIOD USD
1998 3,920,000
1999 4,860,000
2000 6,520,000
2001 6,640,000
2002 6,500,000
2003 8,740,000
2004 9,460,000
2005 8,700,000
2006 8,880,000
2007 9,000,000
2008 8,900,000
2010 6,910,000
2011 7,340,000
2012 8,090,000
2013 10,490,000
2014 8,330,000
2015 8,490,000
2016 8,710,000
2017 8,660,000
2018 9,590,000
2019 10,260,000

Facts:

Microsoft Corp is incurring lobbying and contributions to politicians since 1998 to the current period.

Explanation:

A note from OpenSecret.org

Campaign finance totals for the current election cycle were released by the FEC on March 23, 2020 and by the IRS on April 03, 2019, lobbying data was released by the Senate Office of Public Records on March 19, 2019, outside spending data was released by the FEC on April 24, 2020, and personal finances data was released by the House, Senate, and US Office of Government Ethics starting in June 2011.

 

7. MSFT FINANCIAL STRENGTH

MSFT FINANCIAL STRENGTH

DATA

USD
Working capital 106,132,000,000
Total assets 286,556,000,000
Sales 134,249,000,000
EBIT 49,323,000,000
Market value of equity 1,199,550,000,000
Book value of total liabilities 184,226,000,000
Retained earnings 24,150,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.37 1.2 0.44
B – Retained Earnings / Total Assets 0.08 1.4 0.12
C – EBIT / Total Assets 0.17 3.3 0.57
D – Market Value of Equity / Book Value of Total Liabilities 6.51 0.6 3.91
E – Sales / Total Assets 0.47 1 0.47
Z-Score     5.51

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The calculated Z-Score of Microsoft Corp was 5.51. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. MSFT has a strong financial health and is very far from insolvency.

OVERVIEW

Microsoft Corp is financially stable and net margin was 33 percent of revenue. The balance sheet is liquid and its current is more than enough to settle current obligations in due period.The management was efficient in maintaining a positive cash from operations and free cash flow in the five years. The company has been profitable in the last five years. Market capitalization was undervalued.

CITATION

https://www.microsoft.com

https://www.morningstar.com/stocks/xnas/msft/quote

https://www.opensecrets.org/orgs/summary?id=D000000115

Researched and written by Criselda

Facebook Inc (FB) Extended Graph Analysis

April 17th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

FB logo

Facebook, Inc. is an online social media and social networking service available in 140 multilingual. Founded by Mark Zuckerberg and was launched on February 4, 2004. Headquartered in Menlo Park, California. 

Facebook active users are more than 2 billion worldwide. And there are about 140 million businesses that use the apps to connect with customers, and more than 100 billion messages are shared daily.

 

Facebook Inc (FB) Extended Graph Analysis

1. FB CASH FLOW

FB CASH FLOWS

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activities 8,599,000,000 16,108,000,000 24,216,000,000 29,274,000,000 36,314,000,000 36,314,000,000
Net cash used for investing activities -9,434,000,000 -11,739,000,000 -20,038,000,000 -11,603,000,000 -19,864,000,000 -19,864,000,000
Net cash provided by (used for) financing activities 1,582,000,000 -310,000,000 -5,235,000,000 -15,572,000,000 -7,299,000,000 -7,299,000,000
Capital expenditure -2,523,000,000 -4,491,000,000 -6,733,000,000 -13,915,000,000 -15,102,000,000 -15,102,000,000
Free cash flow 6,076,000,000 11,617,000,000 17,483,000,000 15,359,000,000 21,212,000,000 21,212,000,000
Working Capital 19,727,000,000 31,526,000,000 44,803,000,000 43,463,000,000 51,172,000,000 51,172,000,000

Facts:

  • Cash provided by operating activities was $ 36 billion in 2020.
  • Cash used for investing activities was $ -20 billion in 2020.
  • Net cash provided by (used for) financing activities was $ -7 billion in 2020.
  • Capital expenditure was $ -15 billion in 2020.
  • Free cash flow was $21 billion in 2020.
  • Working capital was $51 billion in 2020.

Explanation:

  • Cash from operating activities increased year-over-year and grew 322 percent in five years.
  • Net cash used from investing activities were investment in property, plant and equipment and purchases of investments and net acquisitions.
  • Cash provided by financing activities were debt repayment, common stock repurchases and other financing activities.
  • Capital expenditure was investment in property, plant and equipment.
  • Free cash flow increases year-over-year and has a growth of 249 percent in five years.
  • Working capital increased 149 percent in five years.

Interpretation

Facebook Inc. managed to generate cash from operations year-over-year in five years from regular business operations. The company’s cash was stable by managing a positive cash flow.

 

2. FB BALANCE SHEET

FB BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 18,434,000,000 29,449,000,000 41,711,000,000 41,114,000,000 54,855,000,000
Current Assets 21,652,000,000 34,401,000,000 48,563,000,000 50,480,000,000 66,225,000,000
Net property, plant and equipment 5,687,000,000 8,591,000,000 13,721,000,000 24,683,000,000 44,783,000,000
Total non-current assets 27,755,000,000 30,560,000,000 35,961,000,000 46,854,000,000 67,151,000,000
Total assets 49,407,000,000 64,961,000,000 84,524,000,000 97,334,000,000 133,376,000,000
Current liabilities 1,925,000,000 2,875,000,000 3,760,000,000 7,017,000,000 15,053,000,000
Non-current liabilities 3,264,000,000 2,892,000,000 6,417,000,000 6,190,000,000 17,269,000,000
Total liabilities 5,189,000,000 5,767,000,000 10,177,000,000 13,207,000,000 32,322,000,000
Retained earnings 9,787,000,000 21,670,000,000 33,990,000,000 41,981,000,000 55,692,000,000
Stockholders equity 44,218,000,000 59,194,000,000 74,347,000,000 84,127,000,000 101,054,000,000

Facts:

  • Total cash was $55 billion in 2019.
  • Current assets were $66 billion in 2019.
  • Net property, plant and equipment was $45 billion in 2019.
  • Non-current assets were $67 billion in 2019.
  • Total assets were $133 billion in 2019.
  • Current liabilities were $32 billion in 2019.
  • Retained earnings were $56 billion in 2019.
  • Stockholders equity were $101 billion in 2019.

Explanation:

  • Total cash increased year-over-year and grew 198 percent in five years. Cash represents 41 percent of total assets.
  • Current assets increased year-over-year and grew 206 percent in five years.
  • Current assets represent 50 percent of total assets.
  • Net property, plant and equipment grew 687 percent in five years and it represents 34 percent of total assets.
  • Total non-current assets grew 142 percent in five years and it represents 50 percent of the total assets.
  • Total assets grew 170 percent in five years.
  • Current liabilities represent 47 percent of total liabilities.
  • Non-current liabilities represent 53 percent of total liabilities.
  • Total liabilities represents 24 percent of total liabilities and stockholders equity.
  • Retained earnings represent 55 percent of total stockholders equity.
  • Stockholders equity represents 76 percent of total liabilities and equity.

Interpretation

The balance sheet of the company is financially healthy and is liquid. The management is very efficient in maintaining a strong balance sheet, cash was capable to meet obligations in due period. 

 

3. FB INCOME AND MARKET

FB INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 17,928,000,000 27,638,000,000 40,653,000,000 55,838,000,000 70,697,000,000 70,697,000,000
EBIT 6,225,000,000 12,427,000,000 20,203,000,000 24,913,000,000 23,986,000,000 23,986,000,000
Net Income 3,688,000,000 10,217,000,000 15,934,000,000 22,112,000,000 18,485,000,000 18,485,000,000
EBITDA 8,162,000,000 14,870,000,000 23,625,000,000 29,685,000,000 30,573,000,000 30,573,000,000
Market Capitalization 303,330,000,000 340,120,000,000 516,130,000,000 382,790,000,000 585,370,000,000 507,923,000,000
Intrinsic Value 0 0 86,576,736,693 108,416,979,226 243,076,122,705 279,125,593,215

Facts:

  • Revenue was $71 billion in 2020.
  • EBIT was $24 billion in 2020.
  • Net income was $18 billion in 2020.
  • EBITDA was $31 billion in 2020.
  • Market capitalization was $508 billion in 2020 trailing twelve months.
  • Intrinsic value was $279 billion in 2020 trailing twelve months.

Explanation:

  • Revenue increases year-over-year and has grown 294 percent in five years.
  • EBIT grew 285 percent in five years and it represented 34 percent of revenue.
  • Net income grew 401 percent in five years and represented 26 percent of the total revenue.
  • EBITDA increases year-over-year and it grew 275 percent in five years.
  • Market capitalization grew 67 percent in five years.
  • Intrinsic value is lower by 45 percent of the market capitalization, in other terms the stock of Facebook is undervalued by 45 percent.

Interpretation

The company was profitable by maintaining a positive bottom line averaging 31 percent in the last five years. 

 

4. FB FINANCIAL RATIOS

FB FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Asset turnover (average) 0.40 0.46 0.54 0.61 0.61 0.51
Return on assets % 8.19 17.82 21.30 24.32 16.02 16.02
Return on equity % 9.14 19.70 23.84 27.90 19.96 19.96
Return on invested capital % 9.03 19.42 23.39 27.02 17.32 17.32

Facts:

  • Asset turnover was averaging 0.51 2020 trailing twelve months.
  • Return on assets were 16.02 percent in 2020.
  • Return on equity was 19.96 percent in 2020.
  • Return on invested capital was 17.32 percent in 2020.

Explanation:

  • Asset turnover indicates that for every $1 invested in assets Facebook generated 51 cents of sales.
  • Return on assets indicates that for every dollar invested in assets it generated 16 cents of net income.
  • Return on equity indicates that for every dollar invested in equity it generated a $0.20 return.
  • Return on invested capital means that the return made by the company was 17% or .17.

Interpretation

Financial ratios indicate that the company has the ability to generate good returns on the investments made.

 

5. FB KEY EXECUTIVE COMPENSATION

FB KEY EXECUTIVE COMPENSATION

2014 2015 2016 2017 2018
Key Executive Compensation  
Salary 2,080,168 2,659,617 2,718,462 2,930,387 3,104,616
Bonus 3,037,293 3,756,059 4,026,621 2,474,416 2,208,042
Annual Other Income 0 0 0 0 0
Restricted Stock Award 47,406,563 51,552,744 64,703,214 84,289,724 73,694,092
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 6,244,925 6,318,204 8,653,231 11,816,608 26,405,800
Total 58,768,949 64,286,624 80,101,528 101,511,135 105,412,550
Mark Zuckerberg/CEO
Salary 1 1 1 1 1
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 0 0 0 0
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 6,213,106 5,037,840 6,015,431 9,101,965 22,554,542
Total 6,213,107 5,037,841 6,015,432 9,101,966 22,554,543
David M. Wehner/CFO
Salary 418,051 665,385 662,692 711,539 753,846
Bonus 535,077 653,365 940,421 633,317 499,494
Annual Other Income 0 0 0 0 0
Restricted Stock Award 11,024,750 15,465,667 14,931,596 21,072,431 18,423,523
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 9,905 9,000 9,566 9,000 9,250
Total 11,987,783 16,793,417 16,544,275 22,426,287 19,689,113
Sheryl K Sandberg/COO
Salary 592,885 715,385 738,077 795,769 843,077
Bonus 624,204 1,265,193 1,293,635 640,378 638,310
Annual Other Income 0 0 0 0 0
Restricted Stock Award 14,332,313 15,465,667 19,908,426 21,072,431 18,423,523
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 0 1,252,724 2,609,318 2,687,643 3,823,508
Total 15,549,402 18,698,969 24,549,457 25,196,221 23,728,418
Michael Schroepfer/ Chief Technology Officer
Salary 535,577 639,423 658,846 711,539 753,846
Bonus 979,021 943,360 859,356 633,317 570,744
Annual Other Income 0 0 0 0 0
Restricted Stock Award 11,024,750 10,310,705 14,931,596 21,072,431 18,423,523
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 9,164 9,140 9,377 9,000 9,250
Total 12,548,512 11,902,628 16,459,175 22,426,287 19,757,363
Christopher K. Cox/Former Chief Product Officer
Salary 533,654 639,423 658,846 711,539 753,846
Bonus 898,991 894,141 933,209 567,204 499,494
Annual Other Income 0 0 0 0 0
Restricted Stock Award 11,024,750 10,310,705 14,931,596 21,072,431 18,423,523
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 12,750 9,500 9,538 9,000 9,250
Total 12,470,145 11,853,769 16,533,189 22,360,374 19,686,113

Facts:

  • Total key executive compensation in 2018 was $105,412,550.
  • Total compensation of Mark Zuckerburg/CEO in 2018 was $22,554,542.
  • Compensation of David M. Wehner/CFO in 2018 was $19,689,113.
  • Compensation of Sheryl K Sandberg/COO in 2018 was $23,728,418.
  • Total compensation of Michael Schroepfer/ Chief Technology Officer in 2018 was $19,757,363.
  • Compensation of Christopher K. Cox/Former Chief Product Officer in 2018 was $19,686,113.

Explanation

  • The total key executive compensation represents 0.57% of the total net income in 2018.
  • Mark Zuckerberg, CEO total compensation in 2018 represents 21.40% of the total key executive compensation.
  • David M. Webner, CFO total compensation in 2018 represents 18.68% of the total key executive compensation.
  • Sheryl K. Sandberg, COO total compensation in 2018 represents 22.51% of the total key executive compensation.
  • Michael Schroepfer, CTO total compensation in 2018 represents 18.74% of the total key executive compensation. 
  • Christopher K. Cox, Former Chief Product Officer total compensation in 2018 represents 18.68% of total key executive compensation.

Interpretation

The total key executive compensation in 2018 was less one percent of the total net income. The executive salary includes basic salary, bonuses, restricted stock award and other compensation. 

 

6. FB LOBBYING AND CONTRIBUTIONS

FB LOBBYING AND CONTRIBUTIONS

PERIOD USD
2009 207,878
2010 351,390
2011 1,350,000
2012 3,850,000
2013 6,430,000
2014 9,340,000
2015 9,850,000
2016 8,692,000
2017 11,510,000
2018 12,620,000
2019 16,710,000

Facts:

  • Facebook Inc was spending lobbying and contributions from 2009 to the current period.

Explanation:

A note from OpenSecret.org

“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on March 18, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.”

Source: OpenSecret.org Center for Responsive Politics

 

7. FB FINANCIAL STRENGTH

FB FINANCIAL STRENGTH

DATA:

USD
Working capital 51,172,000,000
Total assets 133,376,000,000
Sales 70,697,000,000
EBIT 23,986,000,000
Market value of equity 507,923,000,000
Book value of total liabilities 32,322,000,000
Retained earnings 55,692,000,000

 

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.38 1.2 0.46
B – Retained Earnings / Total Assets 0.42 1.4 0.58
C – EBIT / Total Assets 0.18 3.3 0.59
D – Market Value of Equity / Book Value of Total Liabilities 15.71 0.6 9.43
E – Sales / Total Assets 0.53 1 0.53
Z-Score 11.60

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

Facebook calculated Z-Score 11.60. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Facebook Inc has a strong financial health and is very far from insolvency.

Overview

Facebook Inc. has a strong balance sheet and is liquid. The income statement shows that the company has been profitable in the last five years. The company has a very strong financial strength. 

 

CITATION

https://www.morningstar.com/stocks/xnas/fb/quote

https://www.facebook.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000033563

Researched and written by Criselda

 

Alibaba Group Holding Ltd ADR (BABA N) Extended Graph Analysis

April 3rd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

BABA logo

Alibaba Group Holding Ltd Company is a Chinese multinational online company. Specializing in e-commerce, retail, internet and technology. Founded by Jack Ma on 4 April 1999 in Hangzhou, Zhejiang. Alibaba is a public company and traded as NYSE: BABA.

 

Alibaba Group Holding Ltd ADR (BABA N) Extended Graph Analysis

 

1. BABA CASH FLOWS

BABA CASH FLOWS

2015 2016 2017 2018 2019 2020
Net cash provided by operating activities 41,217,000,000 56,836,000,000 80,326,000,000 125,171,000,000 150,975,000,000 196,996,000,000
Net cash used for investing activities -53,454,000,000 -42,831,000,000 -78,364,000,000 -83,890,000,000 -151,060,000,000 -97,828,000,000
Net cash provided by (used for) financing activities 87,497,000,000 -15,846,000,000 32,914,000,000 20,359,000,000 -7,392,000,000 68,605,000,000
Capital expenditures -7,705,000,000 -10,845,000,000 -17,546,000,000 -29,836,000,000 -49,643,000,000 -49,643,000,000
Free cash flow 33,512,000,000 45,991,000,000 62,780,000,000 95,335,000,000 101,332,000,000 147,353,000,000
Working capital 102,437,000,000 82,031,000,000 88,745,000,000 121,045,000,000 62,604,000,000 62,604,000,000

Facts:

  • Cash provided by operating activities was CNY 196.996 billion in 2020.
  • Cash used for investing activities were CNY -97.8 in 2020.
  • Net cash provided by financing activities was CNY 68.605 billion in 2020.
  • Capital expenditure was CNY -49.6 billion in 2020.
  • Free cash flow was CNY 147 billion.
  • Working capital was CNY 62.6 billion in 2020.

Explanation

  • Cash from operations was increasing year-over-year and has a growth rate of 378 percent in five years.
  • Cash from investing activities were purchases of property, plant and equipment, acquisitions and purchases of investments.
  • Cash provided by (used for) financing activities were debt repayment and common stock repurchase.
  • Capital expenditures were purchases of property, plant and equipment and purchases of intangibles.
  • Free cash flow increases year-over-year and has a growth rate of 340% in five years.
  • Working capital was erratic in movement in the last five years.

Interpretation

Alibaba was capable and efficient in maintaining a positive cash from operations, free cash flow and working capital in the last five years. 

 

2. BABA BALANCE SHEET

BABA BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 125,999,000,000 115,696,000,000 150,801,000,000 210,210,000,000 203,165,000,000
Current Assets 142,109,000,000 134,070,000,000 182,516,000,000 256,855,000,000 270,273,000,000
Net property, plant and equipment 12,244,000,000 16,505,000,000 24,897,000,000 75,866,000,000 98,449,000,000
Total non-current assets 113,325,000,000 230,380,000,000 324,296,000,000 460,269,000,000 694,803,000,000
Total assets 255,434,000,000 364,450,000,000 506,812,000,000 717,124,000,000 965,076,000,000
Current liabilities 39,672,000,000 52,039,000,000 93,771,000,000 135,810,000,000 207,669,000,000
Non-current liabilities 70,323,000,000 95,424,000,000 134,242,000,000 215,492,000,000 265,150,000,000
Total liabilities 109,995,000,000 147,463,000,000 228,013,000,000 351,302,000,000 472,819,000,000
Retained earnings 24,842,000,000 78,752,000,000 108,558,000,000 172,353,000,000 257,886,000,000
Stockholders equity 145,439,000,000 216,987,000,000 278,799,000,000 365,822,000,000 492,257,000,000

Facts:

  • Total cash was CNY 203 billion in 2019.
  • Current assets were CNY 270 billion in 2019.
  • Net property, plant and equipment was CNY 98 billion in 2019.
  • Non-current assets were CNY 695 billion in 2019.
  • Total assets were CNY 965 billion in 2019.
  • Current liabilities were CNY 208 billion in 2019.
  • Non-current liabilities were CNY 265 billion in 2019.
  • Total liabilities were CNY 473 billion in 2019.
  • Retained earnings were CNY 258 billion in 2019.
  • Stockholders equity was CNY 492 billion in 2019.

Explanation

  • Cash was increasing year-over-year and has a growth rate of 61% in five years. It represents 21 percent of the total assets.
  • Current assets represent 28 percent of total assets and have a growth rate of 90 percent in five years.
  • Net property plant and equipment represents 10 percent of total assets. It grew 704 percent in five years.
  • Non-current assets was 72 percent of total assets and it grew 513 percent in five years.
  • Total assets grew 278 percent in five years.
  • Current liabilities represent 44 percent of total liabilities.
  • Non-current liabilities represent 56 percent of total liabilities.
  • Total liabilities represents 49 percent of total equities and liabilities.
  • Retained earnings represent 52 percent of total equities.
  • Stockholders equity represents 41 percent of total equities and liabilities.

Interpretation

The balance was strong and in good health. The company was efficient in maintaining a solid balance sheet in the last five years. 

 

3. BABA INCOME AND MARKET

BABA INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 76,204,000,000 101,143,000,000 158,273,000,000 250,266,000,000 376,844,000,000 488,895,000,000
EBIT 23,637,000,000 29,958,000,000 48,055,000,000 70,363,000,000 57,750,000,000 94,306,000,000
Net Income 24,261,000,000 71,460,000,000 43,675,000,000 64,985,000,000 87,886,000,000 172,126,000,000
EBITDA 39,491,000,000 90,115,000,000 76,992,000,000 125,989,000,000 138,491,000,000 212,655,000,000
Market Capitalization 0 1,356,753,374,878 2,601,380,048,653 2,601,380,048,653 3,231,462,292,833 3,231,462,292,833
Intrinsic Value 0 0 5,454,154,281,120 7,219,369,371,316 13,772,141,627,743 12,164,643,972,274

Facts:

  • Revenue was CNY 489 billion in 2020.
  • EBIT was CNY 94 billion in 2020.
  • Net Income was CNY 172 billion in 2020.
  • EBITDA was CNY 213 billion in 2020.
  • Market capitalization was CNY 3 trillion in trailing twelve months.
  • The calculated intrinsic value was CNY 12 trillion in trailing twelve months.

Explanation:

  • Revenue increases year-over-year and has grown 542 percent in five years.
  • EBIT has a growth of 299 percent in five years.
  • Net income grew 609 percent in five years.
  • Market capitalization increased year-over-year and grew 138 percent in five years.
  • Intrinsic value was over 276 percent against market capitalization, therefore market price was undervalued.

Interpretation

Alibaba was profitable in the last five years. The management was able to generate more than enough revenue for the operation of the business.

 

4. BABA FINANCIAL RATIOS

BABA FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.42 0.33 0.36 0.4 0.45 0.43
Return on assets % 13.16 23.06 10.03 10.46 10.41 15.37
Return on equity % 27.63 39.43 17.62 19.85 20.42 28.54
Debt/Equity 0.35 0.25 0.28 0.33 0.23 0.16
Return on invested capital % 13.99 11.08 12.13 9.72 9.89 12.16
Interest coverage 12.72 42.86 23.47 29.16 19.54 37.63

Facts:

  • Asset turnover was averaging 0.43 in 2020.
  • Return on assets was 15.37 percent in 2020.
  • Return on equity was 28.54 percent in 2020.
  • Debt/Equity ratio was 0.16 in 2020.
  • Return on invested capital was 12.16 percent in 2020.
  • Interest coverage was 37.63 in 2020.

Explanation

  • Asset turnover indicates that for every $1 in asset, the company generates 0.43 CNY.
  • Return on assets indicates that the company produces .15 CNY of net income for every CNY invested in assets.
  • Return on equity indicates that for every CNY invested in equity, it earns .2854 CNY net income.
  • Debt/Equity ratio indicates that for every CNY in equity, the company has .16 CNY in leverage.
  • Return on invested capital means the company earns .12 CNY profit for its invested capital.
  • Interest coverage means that the company can afford to pay its interest payment 38 times of its current financial obligations.

Interpretation

The financial ratios show that the company is managed very well from its business operations. The company is profitable.

 

5. BABA KEY EXECUTIVE

NAME TITLE
Sophie Minzhi WU Chief Customer Officer
Timothy A. Steinert General counsel and Corporate Secretary
Luyuan Fan Pres, Alibaba Digital Media and Entertainment
J. Michael Evans Director and President
Shan Trudy Dai President Wholesale Marketplaces
Jeff Jianfeng Zhang Chief Technology Officer and President
Junfang Jessie Zheng Chief Risk Officer and Chief Platform Governance Officer
Pen-Hung Chris Tung Chief Marketing Officer
Judy Wenhong Tong Chief People Officer

Facts:

Alibaba does not reveal the key executive compensation.

 

6. BABA LOBBYING AND CONTRIBUTIONS

BABA LOBBYING AND CONTRIBUTIONS

Period USD
2011 100,000
2012 461,000
2013 430,000
2014 450,000
2015 410,000
2016 1,020,000
2017 2,010,000
2018 2,740,000
2019 2,620,000

Facts:

Alibaba has been spending annual lobbying and contributions since 2011. The figures vary  every period. A Note from OpenSecrets is quoted as follows:

NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.

Source: OpenSecret.org Center for Responsive Politics

 

7. BABA FINANCIAL STRENGTH

BABA FINANCIAL STRENGTH

DATA CNY
Working capital 62,604,000,000
Total assets 965,076,000,000
Sales 488,895,000,000
EBIT 94,306,000,000
Market value of equity 3,404,603,312,500
Book value of total liabilities 472,819,000,000
Retained earnings 257,886,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.06 1.2 0.08
B – Retained Earnings / Total Assets 0.27 1.4 0.37
C – EBIT / Total Assets 0.10 3.3 0.32
D – Market Value of Equity / Book Value of Total Liabilities 7.20 0.6 4.32
E – Sales / Total Assets 0.51 1 0.51
Z-Score 5.60


Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

Alibaba. has a Z-Score of 5.60. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.

Overview

Alibaba Group Holding Ltd ADR has a strong balance sheet and is financially healthy. The income statement shows that the company was profitable and liquid. The stock price of Alibaba was undervalued, therefore, could be a good Buy.

CITATION

https://www.morningstar.com/stocks/xnys/baba/quote

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2011&id=D000064488

https://www.alibabagroup.com/en/global/home

Researched and written by Criselda

 

ConocoPhillips (COP) Extended Graph analysis

March 14th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

COP logo

ConocoPhillips is one of the largest American multinational energy Corporations engaged in the exploration, production, transportation and marketing of crude oil, gas, petroleum  and other products. ConocoPhillip is a public company traded as NYSE: COP. The company was founded in 1875 by Frank Phillips, headquartered in Houston Energy Corridor, Houston Texas, USA.

 

ConocoPhillips (COP) Extended Graph Analysis

1. COP CASH FLOW

COP CASH FLOW

2015 2016 2017 2018 2019 TTM
Net cash flow provided by operating activites 7,572,000,000 4,403,000,000 7,077,000,000 12,934,000,000 11,104,000,000 11,104,000,000
Net cash used for investing activities -8,655,000,000 -3,859,000,000 7,762,000,000 -3,843,000,000 -6,618,000,000 -6,618,000,000
Net cash provided by (used for) financing activities -1,429,000,000 764,000,000 -12,356,000,000 -9,359,000,000 -5,229,000,000 -5,229,000,000
Capital expenditure -10,050,000,000 -4,869,000,000 -4,591,000,000 -6,750,000,000 -6,636,000,000 -6,636,000,000
Free cash flow -2,478,000,000 -466,000,000 2,486,000,000 6,184,000,000 4,468,000,000 4,468,000,000
Working Capital -467,000,000 1,700,000,000 7,115,000,000 5,879,000,000 9,870,000,000 9,870,000,000

Facts:

  • Cash provided by operating activities was $11.104 billion in the trailing twelve months.
  • Cash used for investing activities were -$6.6 billion in the trailing twelve months.
  • Net cash used for financing activities were -$5 billion in the trailing twelve months.
  • Capital expenditures were -$6.6 billion in the trailing twelve months.
  • Free cash flow was $4.5 billion in the trailing twelve months.
  • Working capital was $9.87 billion in the trailing twelve months.

Explanation:

  • Cash provided by operating activities is erratic in movement in the last five years. It has a negative growth of 14% from 2018.
  • Cash used for investment activities are investment in property, plant and equipment.
  • Cash provided by financing activities are debt repayment, common stock repurchased and dividends paid.
  • Capital expenditures are investment in property, plant and equipment.
  • Free cash flow was erratic in movement in the last five years and has a negative growth of 28% from 2018.
  • Working capital grew 68% in the last five years.

Interpretation

The cash flow statements were stable although there was negative growth within five years period. The company has the ability to provide cash from operations in five years and has not seen any negative cash from operations in five years.

 

2. COP BALANCE SHEET

COP BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 2,368,000,000 3,660,000,000 10,097,000,000 7,625,000,000 10,227,000,000
Current Assets 8,789,000,000 8,609,000,000 16,512,000,000 13,274,000,000 16,913,000,000
Net property, plant and equipment 66,446,000,000 58,331,000,000 45,683,000,000 45,698,000,000 42,269,000,000
Total non-current assets 88,695,000,000 81,163,000,000 56,850,000,000 56,706,000,000 53,601,000,000
Total assets 97,484,000,000 89,772,000,000 73,362,000,000 69,980,000,000 70,514,000,000
Current liabilities 9,256,000,000 6,909,000,000 9,397,000,000 7,395,000,000 7,043,000,000
Non-current liabilities 48,466,000,000 47,889,000,000 33,358,000,000 30,646,000,000 28,490,000,000
Total liabilities 57,722,000,000 54,798,000,000 42,755,000,000 38,041,000,000 35,533,000,000
Retained earnings 36,414,000,000 31,548,000,000 29,391,000,000 34,010,000,000 39,742,000,000
Stockholders equity 39,762,000,000 34,974,000,000 30,607,000,000 31,939,000,000 34,981,000,000

Facts:

  • Cash was $10 billion in 2019.
  • Current assets were $16.9 billion in 2019.
  • Net property, plant and equipment was $42 billion in 2019.
  • Non-current assets were $53.6 billion in 2019.
  • Total assets were $70.5 billion in 2019.
  • Current liabilities were $7 billion in 2019.
  • Non-current liabilities $28 billion in 2019.
  • Total liabilities were $35.5 billion in 2019.
  • Retained earnings were $39.7 billion in 2019.
  • Stockholders equity was $35 billion in 2019.

Explanation

  • Cash represents 15% of total assets.
  • Current assets represent 24% of total assets.
  • Net property, plant and equipment represent 60% of total assets.
  • Non-current assets represent 76% of total assets.
  • Total assets grew 0.76% in one year, 2018 to 2019.
  • Current liabilities represent 20% of the total liabilities.
  • Non-current liabilities represent 80% of the total liabilities.
  • Total liabilities represents 50% of the total liabilities and stockholders equity.
  • Stockholders equity represents 50% of the total liabilities and equity.

Interpretation

The company is liquid and financially healthy. The balance sheet is strong and stable.

 

3. COP INCOME AND MARKET

COP INCOME AND MARKET

2015 2016 2017 2018 2019 TTM
Revenue 29,564,000,000 23,693,000,000 29,106,000,000 36,417,000,000 32,567,000,000 32,567,000,000
EBIT -5,440,000,000 -4,634,000,000 2,360,000,000 8,859,000,000 7,278,000,000 7,278,000,000
Net Income -4,428,000,000 -3,615,000,000 -855,000,000 6,257,000,000 7,189,000,000 7,189,000,000
EBITDA 2,794,000,000 4,777,000,000 5,328,000,000 16,664,000,000 16,392,000,000 16,392,000,000
Market Capitalization 57,709,000,000 62,125,000,000 65,622,000,000 70,976,000,000 70,549,000,000 52,348,000,000
Intrinsic Value 106,536,316,910 184,383,385,632 323,869,764,451 218,122,508,960 115,498,848,453 167,935,607,654

Facts:

  • Revenue was $33 billion in the trailing twelve months.
  • EBIT was $7 billion in the trailing twelve months.
  • Net income was $7 billion the trailing twelve months.
  • EBITDA was $16 billion in the trailing twelve months.
  • Market capitalization was $52.348 billion in the trailing twelve months.
  • Intrinsic value was $168 billion in the trailing twelve months.

Explanation

  • Revenue was down by 11% from 2018 to 2019.
  • EBIT represents 22% of revenue.
  • Net income represents 22% of revenue.
  • EBITDA represents 50% of revenue.
  • Market capitalization was down 28% from 2019 to the trailing twelve months.
  • Intrinsic value was up by more than 200% of the market capitalization.

Interpretation

The earnings of the company shows improvements in the last three years. Bottomline was impressive.

 

4. COP FINANCIAL RATIOS

COP FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Asset turnover (average) 0.28 0.25 0.36 0.51 0.46 0.46
Return on assets % -4.14 -3.86 -1.05 8.73 10.23 10.23
Return on equity % -9.66 -9.67 -2.61 20.01 21.49 21.49
Debt/Equity 0.59 0.75 0.56 0.47 0.42 0.42
Return on invested capital % -5.61 -4.49 -0.47 13.7 15.82 15.82
Interest coverage -6.87 -3.44 -1.38 14.57 13.24 13.24

Facts:

  • Asset turnover was averaging 0.46 in the trailing twelve months.
  • Return on assets was 10.23% in the trailing twelve months.
  • Return on equity was 21.49% in the trailing twelve months
  • Debt/Equity was 0.42 in the trailing twelve months.
  • Return on invested capital was 15.82% in the trailing twelve months.
  • Interest coverage was 13.24 in the trailing twelve months.

Explanation

  • Asset turnover indicates that for every $1 invested in assets, COP generated 46 cents of sales.
  • Return on assets indicates that every $1 invested in assets, the company produced 10.23 cents of net income.
  • Return on equity indicates that for every $1 invested in equity, it generated 21.49 cents of earnings.
  • Debt/Equity means that for every dollar in equity COP has 42 cents in leverage. 
  • Return on invested capital means the percent of return on the invested capital.
  • Interest coverage means the company has the ability to pay its current interest in cash 13 times more on due date.

Interpretation

The company’s financial ratios were impressive. The company is healthy and profitable.

 

5. COP KEY EXECUTIVE COMPENSATION

COP Key Executive Compensation

2014 2015 2016 2017 2018
Key Executive Compensation
Salary 5,653,527 5,671,032 5,818,782 5,868,032 6,046,315
Bonus 0 0 0 0 200,000
Annual other income 0 0 0 0 0
Restricted Stock Award 15,271,390 15,906,476 15,850,148 17,274,323 30,769,372
Securities options 13,426,434 13,892,148 10,602,130 11,492,442 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 8,992,090 6,457,004 6+904518 12,568,554 12,679,435
Other compensation 1,021,157 798,083 590,167 853,753 4,097,176
Total 60,785,066 49,678,375 48,458,456 55,612,133 67,594,977
Ryan M. Lance/Chairman of the Board and CEO
Salary 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 6,116,797 6,630,693 6,607,217 6,993,660 11,006,296
Securities options 5,790,798 5,790,780 4,419,261 4,652,424 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 3,568,640 2,524,160 2,638,400 4,596,800 4,868,800
Other compensation 467,776 301,786 245,437 327,393 372,815
Total 27,577,071 21,339,719 19,212,038 21,848,930 23,405,270
Don E Wallette/Executive VP and CFO
Salary 874,000 874,000 939,550 961,400 985,444
Bonus 0 0 0 0 1
Annual other income 0 0 0 0 0
Restricted Stock Award 1,800,494 1,951,740 1,944,837 2,264,449 3,563,725
Securities options 1,704,492 1,704,798 1,301,146 1,506,438 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,102,988 811,072 911,364 1,720,906 1,763,945
Other compensation 1,333,181 85,414 61,530 109,606 109,403
Total 7,878,314 6,518,635 7,406,824 9,498,081 10,272,497
Alan Hirshberg/EVP, Production Drilling & Projects
Salary 1,085,667 1,096,000 1,178,200 1,205,600 1,205,600
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 3,219,979 2,761,283 2,751,504 3,203,706 5,040,839
Securities options 2,016,711 2,411,712 1,840,685 2,131,596 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,602,444 1,169,651 1,314,282 2,481,728 2,343,084
Other compensation 146,230 159,072 121,457 170,957 156,827
Total 11,747,432 8,787,738 9,468,653 9,632,808 12,970,551
Matthew J. Fox/EVP and COO
Salary 1,241,000 1,241,000 1,241,000 1,241,000 1,241,000
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 2,884,300 3,126,619 3,115,552 3,297,776 5,189,837
Securities options 2,730,645 2,730,348 2,083,774 2,194,020 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,872,421 1,324,395 1,384,336 2,625,956 2,554,599
Other compensation 177,039 159,327 91,371 149,519 150,731
Total 9,323,404 8,707,373 8,330,391 9,946,434 9,394,458
Janet L Carrig/Former Senior VP, Legal General Counsel & Corporate ecretary
Salary 752,860 760,032 760,032 760,032 672,333
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 1,249,820 1,436,141 1,431,038 1,514,732 2,383,843
Securities options 1,183,788 1,254,510 957,264 1,007,964 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 845,597 627,726 656,136 1,143,164 806,641
Other compensation 96,931 92,484 70,372 96,278 3,281,368
Total 4,258,845 4,324,910 4,040,550 4,685,880 7,144,185
Kelly Brunetti Rose/Senior VP, Legal General Counsel & Corporate Secretary
Salary 241,938
Bonus 200,000
Annual other income 0
Restricted Stock Award 3,583,832
Securities options 0
LTIP Payout 0
Non-Equity Compensation 342,366
Other compensation 26,031
Total 4,407,016

Facts:

  • The total key executive compensation was $67.594,977 in 2018.
  • Ryan M. Lance, Chairman of the Board and CEO compensation was $23,405,270 in 2018.
  • Don E. Wallette, EVP and CFO compensation was $10,292,497 in 2018.
  • Alan Hirshberg, EVP Production Drilling and Project compensation was $12,970,551 in 2018.
  • Mathew J. Fox, EVP and COO compensation was $9,394,458 in 2018.
  • Janet L. Carrig, Former Senior VP, Legal General Counsel & Corporate Secretary compensation was $7,144,185 in 2018.
  • Kelly Brunetti Rose/Senior VP, Legal General Counsel & Corporate Secretary compensation was $4,407,016 in 2018.

Explanation

  • The total key executive compensation represents 0.94% of the net income.
  • CEO compensation represents 35% of the total key executive compensation.
  • CFO compensation represents 15% of the total key executive compensation.
  • EVP Production Drilling and Project compensation represents 19% of the total key executive compensation.
  • EVP and COO compensation represents 14% of the total key executive compensation.
  • Former Senior VP, Legal General Counsel & Corporate Secretary compensation represents 11% of the total key executive compensation.
  • Senior VP, Legal General Counsel & Corporate Secretary compensation represents 7% of the total key executive compensation.

Interpretation

The key executive compensation was  less than 1 percent which is fair enough for the compensation of the executives.

 

6. COP LOBBYING AND CONTRIBUTIONS

COP LOBBYING AND CONTRIBUTIONS

Period Amount Period Amount
2020 1,473,459 2008 8,459,053
2019 4,870,000 2007 4,089,568
2018 3,080,000 2006 2,038,291
2017 3,010,000 2005 5,218,084
2016 2,498,000 2004 2,670,438
2015 3,135,583 2003 1,380,000
2014 3,969,840 2002 1,157,000
2013 4,242,353 2001 878,639
2012 3,863,736 2000 1,235,159
2011 20,557,043 1999 1,340,812
2010 19,626,382 1998 10,000
2009 18,069,858

Explanation

ConocoPhillips has been spending annual lobbying and contributions since 1998. The amount varies annually. A Note from OpenSecrets is quoted as follows:

“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.”

Source: OpenSecret.org Center for Responsive Politics

 

7. COP FINANCIAL STRENGTH

COP FINANCIAL STRENGTH

DATA

Working capital 9,870,000,000
Total assets 70,514,000,000
Sales 32,567,000,000
EBIT 7,278,000,000
Market value of equity $52,348,000,000
Book value of total liabilities 35,533,000,000
Retained earnings 39,742,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.1400 1.20 0.17
B – Retained Earnings / Total Assets 0.56 1.40 0.79
C – EBIT / Total Assets 0.10 3.30 0.34
D – Market Value of Equity / Book Value of Total Liabilities 1.47 0.60 0.88
E – Sales / Total Assets 0.46 1.0 0.46
Z-Score 2.64

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The Z-Score of COP was 2.64.  According to Dr. Edward Altman a grading scale of 1.8 – 3.0 is more likely to declare bankruptcy. The figures used above are based on the latest financial reports. The Altman score weights different profitability and liquidity metrics to arrive at the overall score. This measurement is not calculated for the purpose of estimating the company will declare bankruptcy but it helps in comparing other companies that have become insolvent.

Hence, this measurement categorized the profitability or return on investment, liquidity, leverage and the efficiency in operating.

Conclusion

ConocoPhillips has been in the industry for more than a century and has been managed successfully. The company is stable and has a strong balance sheet and is  profitable. 

CITATION

http://www.conocophillips.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000000303

https://www.morningstar.com/stocks/xnys/cop/quote

Researched and written by Criselda

PepsiCo Inc (PEP) Extended Graph Analysis

March 5th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

PEP logo

PepsiCo is leading in the food and beverage multinational company, well known for its product diversification selling products in around 200 countries and territories. Their products caters to the tastes of their customers young and adults. They faced the challenge of providing their consumers nutritious food and beverages. Its main competitors is The Coca-Cola Company.

PepsiCo was founded by Caleb Bradham, headquartered in Purchase, Harrison, New York, United States. It is a public company registered under NASDAQ with ticker symbol PEP.

 

PepsiCo (PEP) Extended Graph Analysis

 

1. PEP CASH FLOW

PEP CASH FLOW

2015 2016 2017 2018 2019 TTM
Net cash flow provided by operating activites 10,580,000,000 10,404,000,000 9,994,000,000 9,415,000,000 9,649,000,000 9,649,000,000
Net cash used for investing activities -3,569,000,000 -7,148,000,000 -4,403,000,000 4,564,000,000 -6,437,000,000 -6,437,000,000
Net cash provided by (used for) financing activities -3,828,000,000 -2,942,000,000 -4,186,000,000 -13,769,000,000 -8,489,000,000 -8,489,000,000
Capital expenditure -2,758,000,000 -3,040,000,000 -2,969,000,000 -3,282,000,000 -4,232,000,000 -4,232,000,000
Free cash flow 7,822,000,000 7,364,000,000 7,025,000,000 6,133,000,000 5,417,000,000 5,417,000,000
Working Capital 5,453,000,000 5,954,000,000 10,525,000,000 -245,000,000 -2,816,000,000 -2,816,000,000

Facts:

  • Cash from operating activities was $9.649 billion in the trailing twelve months.
  • Cash used for investing activities was -$6.437 billion in the trailing twelve months.
  • Net cash from financing activities was -$8.489 billion in the trailing twelve months.
  • Capital expenditure was -$4.232 billion in the trailing twelve months.
  • Free cash flow was $5.417 billion in the trailing twelve months.
  • Working capital was -$2.816 billion in the trailing twelve months.

Explanation:

  • Cash from operating increased 2.49% from 2018 to trailing twelve months.
  • Investing activities were purchase of property, plant and equipment and acquisitions.
  • Financing activities were debt repayment, common stock repurchased and dividend payments.
  • Capital expenditure was investment in property, plant and equipment.
  • Free cash flow decreased 12 percent from 2018.
  • Working capital was negative from 2018, current liabilities were higher than the current assets.

Interpretation

The company was able to provide cash from its operating activities in the last five years. PEP had a number of business acquisitions in recent years as one of their strategic moves.

 

2. PEP BALANCE SHEET

PEP BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 12,009,000,000 16,125,000,000 19,510,000,000 8,993,000,000 5,738,000,000
Current Assets 23,031,000,000 27,089,000,000 31,027,000,000 21,893,000,000 17,645,000,000
Net property, plant and equipment 16,317,000,000 16,591,000,000 17,240,000,000 17,589,000,000 20,853,000,000
Total non-current assets 46,636,000,000 47,040,000,000 48,777,000,000 55,755,000,000 60,902,000,000
Total assets 69,667,000,000 74,129,000,000 79,804,000,000 77,648,000,000 78,547,000,000
Current liabilities 17,578,000,000 21,135,000,000 20,502,000,000 22,138,000,000 20,461,000,000
Non-current liabilities 40,166,000,000 41,899,000,000 48,413,000,000 40,992,000,000 43,300,000,000
Total liabilities 57,744,000,000 63,034,000,000 68,915,000,000 63,130,000,000 63,761,000,000
Retained earnings 50,472,000,000 52,518,000,000 52,839,000,000 59,947,000,000 61,946,000,000
Stockholders equity 11,923,000,000 11,095,000,000 10,889,000,000 14,518,000,000 14,786,000,000

Facts:

  • Total cash was $5.738 billion in 2019.
  • Current assets were $17.645 billion in 2019.
  • Net property, plant and equipment was $20.853 in 2019.
  • Total non-current assets were $60.902 billion in 2019.
  • Total assets were $78.547 billion in 2019.
  • Current liabilities were $20.641 billion in 2019.
  • Non-current liabilities were $43.300 in 2019.
  • Total liabilities were $63.761 in 2019.
  • Retained earnings were $61.946 in 2019.
  • Stockholders equity was $14.786 in 2019

Explanation:

  • Total cash represents 7.31% of total assets.
  • Current assets represent 22.46% of total assets.
  • Net property, plant and equipment represents 26.55% of total assets.
  • Total non-current assets represent 77.54% of total assets.
  • Total assets grew 13% in five years.
  • Current liabilities represent 32% of total liabilities.
  • Non-current liabilities represent 68% of total liabilities.
  • Total liabilities represents 81% to total liabilities and equity.
  • Stockholder equity represents 19% of total liabilities and equity.

Interpretation

The company is highly leveraged, using four-fifth of creditors money in its business operation, nearly 20% of investors money is utilized in the operation. In other words, the creditors have more stake than the investors. 

 

3. PEP INCOME AND MARKET

PEP INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 63,056,000,000 62,799,000,000 63,525,000,000 64,661,000,000 67,161,000,000 67,161,000,000
EBIT 9,712,000,000 9,785,000,000 10,509,000,000 10,110,000,000 10,291,000,000 10,291,000,000
Net Income 5,452,000,000 6,329,000,000 4,857,000,000 12,515,000,000 7,314,000,000 7,314,000,000
EBITDA 10,828,000,000 12,263,000,000 13,122,000,000 13,113,000,000 12,879,000,000 12,879,000,000
Market Capitalization 144,684,000,000 150,059,000,000 170,543,000,000 155,666,000,000 190,108,000,000 197,550,000,000
Intrinsic Value 209,836,396,353 745,025,154,189 839,073,420,473 2,631,653,205,144 4,029,094,790,996 4,718,747,139,220

Facts:

  • Revenue was $67.161 billion in trailing twelve months.
  • EBIT was $10.291 billion in the trailing twelve months.
  • Net income was $7.314 billion in the trailing twelve months.
  • EBITDA was $12.879 billion in the trailing twelve months.
  • The market capitalization was $197.550 billion.
  • Intrinsic value was $4.719 trillion in the trailing twelve months.

Explanation:

  • Revenue grew 7% in five years and from 2018 it grows 3.87%.
  • EBIT grew 6% in five years and shows an increase of 1.79% from 2018.
  • Net income grew 34% in five years. It has a negative growth of 41.56% from 2018.
  • EBITDA grew 19% in five years. It has a negative growth from 2018 at 1.78%.
  • Market capitalization was erratic in movement in the last five years and it increased 4% from 2019 to the last quarter.
  • The calculated intrinsic value shows a very high value at $4.719 trillion.

Interpretation

The company is investing heavily in advertising and marketing, the reason its sales, general and administrative expense was high at 72% of gross profit which impacted the net income.

 

4. PEP FINANCIAL RATIOS

PEP FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.90 0.87 0.83 0.82 0.86 0.86
Return on assets % 7.77 8.79 6.31 15.89 9.37 9.37
Return on equity % 37.20 55.14 44.32 98.66 49.92 49.92
Debt/Equity 2.46 2.72 3.12 1.95 1.97 1.97
Return on invested capital % 13.38 15.55 11.00 27.64 17.11 17.11
Interest coverage 8.67 7.37 9.34 7.03 9.20 9.20

Facts:

  • Asset turnover was 0.86 in the trailing twelve months.
  • Return on asset was 9.37% in the trailing twelve months.
  • Return on equity was 49.92% in the trailing twelve months.
  • Return on invested capital was 17.11% in the trailing twelve months.
  • Interest coverage was 9.20 in the trailing twelve months.

Explanation:

  • Asset turnover means that the company is generating $0.86 of sales for every $1 investment in assets.
  • Return on assets means for every $1 invested in assets the company generates 9.37 cents of net income.
  • Return on equity indicates that for every $1 of shareholders equity, PEP generated 49 or 50 cents in profit.
  • Return on invested capital indicates that the invested capital yielded 17.11 percent of return.
  • Interest coverage indicates that the company earns 9 times earnings than its current interest payment.

Interpretation

The company’s financial ratios show acceptable ratios. The company is liquid

 

5. PEP KEY EXECUTIVE COMPENSATION

PEP KEY EXECUTIVE COMPENSATION

Name/Title 2014 2015 2016 2017 2018
Key Executive Compensation 37,399,250 48,405,262 56,275,124 63,116,455 65,489,721
Indra K. Nooy/ Chairman of the Board and Chief Executive Officer 22,485,574 26,444,990 29,783,416 31,082,648 24,491,117
Ramon L Laquarta/Chairman of the Board and CEO 5,655,039 6,113,574 10,157,245 10,827,396
Albert P. Carey/CEO North America 7,712,149 7,744,388 10,071,299 10,160,310 7,868,118
Laxman Narasimhan/Global Chief Commercial Officer and CEO Latin America 7,009,990
Silviu Popovici/CEO Europe Sub Saharan Africa 6,151,034
Hugh F. Johnston/Vice Chairman, Executive Vice President and Chief Financial Officer 7,201,527 8,560,845 10,306,835 11,716,252 9,142,066

Facts:

  • The key executive compensation was $65,489,721 in 2018.
  • The CEO compensation was $24,491,117 in 2018.
  • Chairman of the Board and CEO compensation was $10,827,396 in 2018.
  • CEO North America compensation was $7,868,118 in 2018.
  • Chief Commercial Officer and CEO Latin America compensation was $7,009,990 in 2018.
  • CEO Europe Sub Saharan Africa compensation was 6,151,034 in 2018.
  • Vice Chairman, Executive Vice President and Chief Financial Officer compensation was $9,142,066 in 2018.

Explanation:

  • The total key executive compensation represents 0.90% of net income.
  • CEO compensation represents 37.40% of the total key executive compensation.
  • Chairman of the Board and CEO compensation represents 16.53% of the total key executive compensation.
  • CEO North America compensation represents 12% of the total key executive compensation.
  • Chief Commercial Officer and CEO Latin America compensation represents 11% of the total key executive compensation.
  • CEO Europe Sub Saharan Africa compensation represents 9.39% of the total key executive compensation.
  • Vice Chairman, Executive Vice President and Chief Financial Officer compensation represents 14% of the total key executive compensation.

Interpretation

The company’s key executive compensation represents 0.90% of the net income.

 

6. PEP LOBBYING AND CONTRIBUTIONS

PEP LOBBYING AND CONTRIBUTIONS

Period USD Period USD
1998 960,000 2009 9,373,000
1999 1,300,000 2010 6,874,800
2000 1,320,000 2011 3,260,000
2001 1,035,000 2012 3,330,000
2002 960,000 2013 3,720,000
2003 860,000 2014 3,510,000
2004 720,000 2015 4,470,000
2005 740,000 2016 3,140,000
2006 880,318 2017 2,880,000
2007 1,000,636 2018 3,470,000
2008 1,096,000 2019 3,490,000

Explanation:

PepsiCo has been spending annual lobbying and contributions since 1998. The amount varies annually. NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.

Source: OpenSecret.org Center for Responsive Politics

 

6. PEP FINANCIAL STRENGTH

PEP FINANCIAL STRENGTH

DATA

Working capital -$2,816,000,000
Total assets $78,547,000,000
Sales $67,161,000,000
EBIT $10,291,000,000
Market value of equity $197,550,000,000
Book value of total liabilities $63,761,000,000
Retained earnings $61,946,000,000

 

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets -0.0359 1.20 -0.04
B – Retained Earnings / Total Assets 0.79 1.40 1.10
C – EBIT / Total Assets 0.13 3.30 0.43
D – Market Value of Equity / Book Value of Total Liabilities 3.10 0.60 1.86
E – Sales / Total Assets 0.86 1.0 0.86
Z-Score 4.21

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The overall Z-Score of PEP was 4.21, the grading scale for 3.00 and over according to Altman indicates that the company will not declare bankruptcy. This measurement is not calculated for the purpose of estimating the company will declare bankruptcy but it helps in comparing other companies that have become insolvent.

Conclusion

PepsiCo was liquid and has great potential for accelerating its revenue in the long run due to its diversification strategy. The company manufactures and sells a variety of food and beverages that caters to young people and adults. Although the company is highly leveraged, PEP is stable and has a strong financial strength.

CITATION

https://www.opensecrets.org/federal-lobbying/firms/summary?cycle=1998&id=D000000200

https://www.pepsico.com/about/about-the-company

https://www.morningstar.com/stocks/xnas/pep/quote

Researched and written by Criselda

Chevron Corp (CVX) Extended Graph Analysis

February 20th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

CVX logo

Chevron Corporation is a public multinational energy corporation traded as NYSE:CVX, headquartered in San Ramon, California USA. Chevron and was founded on September 10, 1879. CVX is one of the largest oil companies as of 2019. The company produced fuel products, base oils and process oils, lubricants, chemicals, aviation fuels and marine fuels. The company is engaged in hydrocarbon exploration and production and refining. 

 

Chevron Corp (CVX) Extended Graph Analysis

1. CVX CASH FLOW

CVX CASH FLOW

2014 2015 2016 2017 2018 2019
Net cash flow provided by operating activities 31,475,000,000 19,456,000,000 12,846,000,000 20,515,000,000 30,618,000,000 30,808,000,000
Net cash provided by (used for) financing activities -4,999,000,000 2,815,000,000 25,000,000 -14,554,000,000 -13,699,000,000 -15,243,000,000
Net cash used for investing activities -29,893,000,000 -23,808,000,000 -16,852,000,000 -8,201,000,000 -12,290,000,000 -13,468,000,000
Capital expenditure -35,407,000,000 -29,504,000,000 -18,109,000,000 -13,404,000,000 -13,792,000,000 -13,897,000,000
Free cash flow -3,932,000,000 -10,048,000,000 5,263,000,000 7,111,000,000 16,826,000,000 16,911,000,000

Facts:

  • Net cash flow provided by operating activities were $30.8 billion in the trailing twelve months.
  • Net cash used for investing activities was -$13.5 billion in the trailing twelve months.
  • Cash provided by (used for) financing activities was -$15 billion in the trailing twelve months.
  • Capital expenditure was -$13.9 billion in the trailing twelve months.
  • Free cash flow was $16.9 billion in the trailing twelve months.

Explanation

  • Net income and depreciation have a significant amount in cash provided by operating activities.
  • Cash used for investing activities were investment in property, plant and equipment, and purchases of investment.
  • Cash provided by (used for) financing activities were debt issued and repayment, and dividend payments.
  • Capital expenditure is investment in property, plant and equipment.
  • Free cash flow had less one percent increase from 2018 to the trailing twelve months.

Interpretation

CVX was able to provide cash from operations in the last five years. Moreover, the company was able to generate a free cash flow from 2017 to the trailing twelve months.

 

2. CVX BALANCE SHEET

CVX BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 13,215,000,000 11,332,000,000 7,001,000,000 4,822,000,000 10,345,000,000 11,755,000,000
Current Assets 42,232,000,000 35,347,000,000 29,619,000,000 28,560,000,000 34,021,000,000 33,988,000,000
Net property, plant and equipment 183,173,000,000 188,396,000,000 182,186,000,000 177,712,000,000 169,207,000,000 164,363,000,000
Total non-current assets 223,794,000,000 230,756,000,000 230,459,000,000 225,246,000,000 219,842,000,000 222,549,000,000
Total assets 266,026,000,000 266,103,000,000 260,078,000,000 253,806,000,000 253,863,000,000 256,537,000,000
Current liabilities 31,926,000,000 26,464,000,000 31,785,000,000 27,737,000,000 27,171,000,000 30,233,000,000
Non-current liabilities 79,072,000,000 86,923,000,000 82,737,000,000 77,945,000,000 72,138,000,000 70,463,000,000
Total liabilities 110,998,000,000 113,387,000,000 114,522,000,000 105,682,000,000 99,309,000,000 100,696,000,000
Retained earnings 184,987,000,000 181,578,000,000 173,046,000,000 174,106,000,000 180,987,000,000 183,783,000,000
Stockholders equity 155,028,000,000 152,716,000,000 145,556,000,000 148,124,000,000 154,554,000,000 155,841,000,000

Facts:

  • Total cash was $11.8 billion in Q3 2019.
  • Current assets were $34 billion in Q3 2019.
  • Net property, plant and equipment was $164 billion in Q3 2019.
  • Total non-current assets were $223 billion in Q3 2019.
  • Total assets were $257 billion in Q3 2019.
  • Current liabilities were $30 billion in Q3 2019.
  • Non-current liabilities were $70 billion in Q3 2019.
  • Total liabilities were $107 billion in Q3 2019.
  • Retained earnings were $184 billion in Q3 2019.
  • Stockholders equity was $156 billion in Q3 2019.

Explanation

  • Total cash was erratic in movement in the last five years. It grows 14 percent from 2018. It represents 35 percent of current assets.
  • Current assets were erratic in movement in the last five years. It represents 13 percent of total assets.
  • Net property, plant and equipment represents 74 percent of total non-current assets.
  • Total non-current assets represents 87 percent of total assets.
  • Total assets grew 1 percent from 2018.
  • Current liabilities represent 30 percent of total liabilities.
  • Non-current liabilities represent 70 percent of total liabilities.
  • Total liabilities was 39 percent of total liabilities and stockholders equity.
  • Retained earnings was 118 percent of equity.
  • Stockholders equity represents 61 percent of total liabilities and shareholders equity.

Interpretation

The balance sheet is liquid. The company’s current assets are sufficient for its current obligations. CVX is using more of the shareholders investment than the sources from creditors in the usual business operations. In other words the shareholders have more stake than the creditors in the trailing twelve months.

3. CVX INCOME AND MARKET

CVX INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 200,494,000,000 129,925,000,000 110,215,000,000 134,674,000,000 158,902,000,000 145,629,000,000
EBIT 19,726,000,000 -3,710,000,000 -6,216,000,000 2,480,000,000 14,446,000,000 13,295,000,000
Net Income 19,241,000,000 4,587,000,000 -497,000,000 9,195,000,000 14,824,000,000 13,264,000,000
Market Capitalization 211,347,120,000 169,378,000,000 222,190,000,000 237,783,000,000 207,010,000,000 202,588,000,000
Intrinsic Value 209,073,862,419 212,683,314,721 333,795,619,400 423,503,597,323 716,272,790,115 995,200,421,499

Facts:

  • Revenue was $146 billion in the trailing twelve months.
  • EBIT was $13 billion in the trailing twelve months.
  • Net income was $13 billion in the trailing twelve months.
  • The market capitalization was $202.588 billion in the trailing twelve months.
  • Intrinsic value was $995 billion in the trailing twelve months.

Explanation:

  • Revenue was erratic in movement. It was down 8 percent from 2018.
  • EBIT represents 9 percent of revenue in the trailing twelve months.
  • Net income was 9 percent of revenue in the trailing twelve months.
  • Market capitalization was erratic in movement in the last five years. It shows a decrease of 2 percent from 2018.
  • Intrinsic value was higher than the market capitalization by 3x in the trailing twelve months.

Interpretation

The company was able to generate sufficient revenue for the operation of the business in the trailing twelve months.

 

4. CVX FINANCIAL RATIOS

CVX FINANCIAL RATIOS

2014 2015 2016 2017 2018 TTM
Asset turnover (average) 0.77 0.49 0.42 0.52 0.63 0.57
Return on assets % 7.4 1.72 -0.19 3.58 5.84 5.17
Return on equity % 12.65 2.98 -0.33 6.26 9.8 8.57
Debt/Equity 0.15 0.22 0.24 0.23 0.19 0.16
Return on invested capital % 10.92 2.45 -0.2 5.02 8.17 7.31
Interest coverage 0 0 -9.75 31.04 28.51 24.25

Facts:

  • Asset turnover was averaging 0.57 in the trailing twelve months.
  • Return on asset was 5.17 percent in the trailing months.
  • Return on equity was $8.57 percent in the trailing twelve months.
  • Debt/Equity was 0.16 in the trailing twelve months.
  • Return on invested capital was 7.31 percent in the trailing twelve months.
  • Interest coverage was 24.25 in the trailing twelve months.

Explanation

  • Asset turnover indicates that for every dollar invested in assets, the company generates 57 cents of sales.
  • Return on asset indicates that for every dollar invested in assets, CVX generated 5.17 cents of net income.
  • Return on equity indicates that for every dollar of the capital that the shareholders invested, the company generates 8.57 cents profit.
  • Debt to Equity indicates that the company has $0.16 debt for every dollar of assets.
  • Return on invested capital indicates that the company generated a 7.31 percent return from the company’s investments.
  • The interest coverage indicates that the company has the ability to make interest payments on its debt in due date.

Interpretation

The company has the ability to generate cash for its daily business operations. CVX is using more of the investors money than creditors.

 

5. CVX KEY EXECUTIVE COMPENSATION

CVX KEY EXECUTIVE COMPENSATION

2014 2015 2016 2017 2018
Key Executive Compensation 44,239,015 46,489,214 57,690,075 64,632,139 55,846,538
John S. Watson/Chairman of the Board and Chief Executive Officer 25,970,417 22,029,809 24,657,491 24,781,568 1,241,499
Patricia E. Yarrington/Vice President and Chief Financial Officer 9,781,357 7,379,867 6,541,425 8,152,053 7,159,079
Michael K. Wirth/Vice Chairman of the Board and Executive Vice President, Midstream & Development 8,487,241 8,123,840 9,129,645 11,669,681 20,640,623
James William Johnson/Executive Vice President, Upstream 8,955,698 9,416,320 11,024,515 10,925,982
Pierre R. Breber/Executive Vice President, Downstream & Chemicals 8,030,044
Joseph C. Geagea/Executive Vice President, Technology, Projects and Services 7,945,194 9,004,322 7,849,411

Facts:

  • Total key executive compensation was $55,846,538 in 2018.
  • Chairman of the Board and CEO compensation was $1,241,499 in 2018.
  • Vice President and CFO compensation was $7,159,079 in 2018.
  • Vice Chairman of the Board and EVP Mainstream & Development compensation was $20,640,623 in 2018.
  • EVP Upstream compensation was $10,925,982 in 2018.
  • EVP Downstream and Chemicals compensation was $8,030,044 in 2018.
  • EVP Technology, Projects and Services compensation was $7,849,411 in 2018.

Explanation:

  • The key executive total compensation represents 0.38 percent of net income in 2018.
  • Chairman of the Board and CEO compensation represents 2 percent of the total key executive compensation.
  • Vice President and CFO compensation represents 13 percent of the total key executive compensation in 2018.
  • Vice Chairman of the Board and EVP Mainstream & Development compensation represents 37 percent of the total key executive compensation in 2018.
  • EVP Upstream compensation represents 20 percent of the total key executive compensation in 2018.
  • EVP Downstream and Chemicals compensation represents 14 percent of the total key executive compensation in 2018.
  • EVP Technology, Projects and Services compensation  represents 14 percent of the total key executive compensation in 2018.

Interpretation

The company is spending less than one percent of its net income in its key executive compensation.

 

6. CVX LOBBYING AND CONTRIBUTIONS

CVX LOBBYING AND CONTRIBUTIONS

PERIOD USD PERIOD USD
2019 9,270,000 2008 12,994,000
2018 9,600,000 2007 9,030,000
2017 9,290,000 2006 7,480,000
2016 7,470,000 2005 9,490,000
2015 7,200,000 2004 5,220,000
2014 8,280,000 2003 4,620,000
2013 10,530,000 2002 4,620,000
2012 9,550,000 2001 1,519,296
2011 9,510,000 2000 1,680,000
2010 13,130,000 1999 2,040,000
2009 20,815,000 1998 2,969,825

Explanation:

The company has been lobbying and contributions to politicians yearly since 1998. A note from Center for Responsive Politics were quoted below:

NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.”

Interpretation

The company’s total lobbying and contributions in 2019 represents 0.07 percent of net income in 2019.

 

7. CVX FINANCIAL STRENGTH

CVX FINANCIAL STRENGTH

DATA USD
Working capital 6,850,000,000
Total assets 253,683,000,000
Sales 145,629,000,000
EBIT 13,295,000,000
Market value of equity 211,134,800,000
Book value of total liabilities 99,309,000,000
Retained earnings 180,987,000,000

 

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.0270 1.20 0.03
B – Retained Earnings / Total Assets 0.71 1.40 1.00
C – EBIT / Total Assets 0.05 3.30 0.17
D – Market Value of Equity / Book Value of Total Liabilities 2.13 0.60 1.28
E – Sales / Total Assets 0.57 1.0 0.57
Z-Score     3.05

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

Chevron Corporation. has a Z-Score of 3.05. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.

Overview

The company is capable of producing sufficient revenue for the operation of the business and able to produce free cash flow in the last three years.

 

Citation

https://www.chevron.com/about

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=1998&id=D000000015

https://www.morningstar.com/stocks/xnys/cvx/quote

Researched and written by Criselda

Samsung Electronics Co Ltd (005930) Extended Graph Analysis

February 12th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

Samsung logo

Samsung Electronics Co Ltd is a multiple consumer electronics business which manufactures and sells IT and Mobile Communications and Device Solutions around the world. They have diversified products from home appliances to health and medical equipment aside from smartphones, semiconductor chips, printers and telecom network equipment. Samsung was ranked as one of the top 10 global in technology..

Samsung is a public company traded as KRX: 005930. The company was founded on January 13, 1989 by Lee Byung-chul. The company was headquartered in Suwon, South Korea.

 

Samsung Electronics Co Ltd (005930) Extended Graph Analysis

 

1. SAMSUNG CASH FLOW

SAMSUNG CASH FLOW

2014 2015 2016 2017 2018 2019
Net cash flow provided by operating activities 36,975,389,000,000 40,061,761,000,000 47,385,644,000,000 62,162,041,000,000 67,031,863,000,000 48,093,855,000,000
Net cash used for investing activities -32,806,408,000,000 -27,167,787,000,000 -29,658,675,000,000 -49,385,216,000,000 -52,240,453,000,000 -37,225,406,000,000
Net cash provided by (used for) financing activities -3,057,109,000,000 -6,573,509,000,000 -8,669,514,000,000 -12,560,867,000,000 -15,090,222,000,000 -18,480,578,000,000
Capital expenditure -23,367,250,000,000 -27,382,103,000,000 -25,190,641,000,000 -43,775,974,000,000 -30,576,923,000,000 24,496,471,000,000
Free cash flow 13,608,139,000,000 12,679,658,000,000 22,195,003,000,000 18,386,067,000,000 36,454,940,000,000 23,597,384,000,000

Facts:

  • Net cash flow from operations was KRW 48 trillion. In the trailing twelve months.
  • Net cash used for investing activities  was -KRW 37 trillion in the trailing twelve months.
  • New cash provided by (used for) financing activities was -KRW 18 trillion in the trailing twelve months.
  • Capital expenditure was KRW 24 trillion in the trailing twelve months.
  • Free cash flow was KRW 23.597 trillion in the trailing twelve months.

Explanation:

  • Net income, depreciation and amortization have a significant amount in the cash from operating activities.
  • Net cash from operations were increasing year-over-year from 2014 to 2018. Moreover, the growth was 81 percent in five years.
  • The net cash used for investing activities were property, plant and equipment and purchases of investments.
  • The net cash provided by (used for) financing activities were debt repayment, dividends paid and other financing activities.
  • Capital expenditures were purchases of property, plant and equipment, and purchases of intangibles.
  • Free cash flow was erratic in movement in the last five years, however the company has managed to provide a free cash flow for the business operations.

Interpretation

The cash flow shows that the company is liquid, the management managed to provide a free cash flow per share at KRW 4555.25 in the trailing twelve months. Cash was provided for dividends payment and debt repayment. The net income was sufficient to provide cash from operations.

 

2. SAMSUNG BALANCE SHEET

SAMSUNG BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 61,817,340,000,000 71,493,074,000,000 88,182,313,000,000 83,184,201,000,000 100,939,943,000,000 101,946,477,000,000
Current Assets 115,146,025,999,999 124,814,725,000,000 141,429,704,000,000 146,982,464,000,000 174,697,424,000,000 186,042,134,000,000
Net property, plant and equipment 80,872,950,000,000 86,477,110,000,000 91,473,041,000,000 111,665,648,000,000 115,416,724,000,000 116,855,571,000,000
Total non-current assets 115,276,932,000,000 117,364,796,000,000 120,744,620,000,000 154,769,626,000,000 164,659,820,000,000 167,343,851,000,000
Total assets 230,422,957,999,999 242,179,521,000,000 262,174,324,000,000 301,752,090,000,000 339,357,244,000,000 353,385,985,000,000
Current liabilities 52,013,912,999,999 50,502,909,000,000 54,704,095,000,000 67,175,114,000,000 69,081,510,000,000 63,303,192,000,000
Non-current liabilities 16,227,320,000,000 18,799,845,000,000 21,045,901,000,000 27,363,560,000,000 30,206,741,000,000 34,679,343,000,000
Total liabilities 68,241,232,999,999 69,302,754,000,000 75,749,996,000,000 94,538,674,000,000 99,288,251,000,000 97,982,535,000,000
Retained earnings 169,529,603,000,000 185,132,014,000,000 193,086,317,000,000 215,811,200,000,000 242,598,956,000,000 251,761,348,000,000
Stockholders equity 162,181,725,000,000 172,876,767,000,000 186,424,628,000,000 207,213,416,000,000 240,068,993,000,000 255,403,450,000,000

Facts

  • Total cash was KRW 101.9 trillion in Q3 2019.
  • Current assets were KRW 186 trillion in Q3 2019.
  • Net property, plant and equipment was KRW 116.856 trillion in Q3 2019.
  • Non-current assets are KRW 167 trillion in Q3 2019.
  • Total assets are KRW 353 trillion in Q3 2019.
  • Current liabilities are KRW 63 trillion in Q3 2019.
  • Non-current liabilities are KRW 34.7 trillion in Q3 2019.
  • Total liabilities were KRW 97.982 trillion in Q3 2019.
  • Retained earnings were KRW 252 trillion in Q3 2019.
  • Stockholders equity was KRW 255 trillion in Q3 2019.

Explanation

  • Total cash was increasing year over year and has a growth of 63 percent in five years.
  • Current assets increase year-over-year and have a growth of 62 percent in five years.
  • Net property, plant and equipment increase year-over-year and have a growth of 44 percent in five years.
  • Total non-current assets increase year-over-year and have a growth of 45 percent in five years.
  • Total assets increase year-over-year and have a growth of 53 percent in five years. 
  • Current liabilities represent 65 percent of the total liabilities.
  • Non-current liabilities represent 35 percent of the total liabilities.
  • Total liabilities represent 28 percent of the total liabilities and stockholders equity.
  • Retained earnings represent 99 percent of stockholders equity and has a growth of 49 percent in five years.
  • Stockholders equity represents 72 percent of total liabilities and equity.

Interpretation

The company has a strong balance sheet and is liquid and financially healthy. It has 3 times current assets than current liabilities. Its liquid assets are enough to pay for its current obligations. The stockholders have more stake in the company than of the creditors. It is using more of the stockholders’ investment for the operation of the business.

 

 3. SAMSUNG INCOME AND MARKET

SAMSUNG INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 208,205,987,000,000 200,653,482,000,000 201,866,745,000,000 239,575,376,000,000 243,771,415,000,000 229,781,171,000,000
EBIT 25,025,071,000,000 26,413,442,000,000 29,240,672,000,000 53,645,038,000,000 58,886,669,000,000 31,408,838,000,000
Net Income 23,082,499,000,000 18,694,628,000,000 22,415,655,000,000 41,344,569,000,000 38,573,066,000,000 21,625,415,000,000
Market Capitalization 200,085,060,000,000 180,755,714,000,000 245,868,758,000,000 341,450,038,000,000 257,157,237,000,000 375,782,850,000,000
Intrinsic Value 102,886,880,946,227 152,775,056,577,764 192,305,845,455,446 589,116,872,065,884 544,412,951,961,468 619,972,272,761,983

Facts:

  • Revenue was KRW 230 trillion in the trailing twelve months.
  • EBIT was KRW 31 trillion in the trailing twelve months.
  • Net income was KRW 22 trillion in the trailing twelve months.
  • Market capitalization was KRW 376 trillion in the trailing twelve months.
  • Intrinsic value was KRW 619.972 trillion in the trailing twelve months.

Explanation:

  • Revenue was averaging KRW 221 trillion in five years and has a growth of 17 percent from 2014 to 2018..
  • EBIT was averaging KRW 37 trillion and has a growth of 135 percent from 2014 to 2018. 
  • EBIT represents 14 percent of the revenue.
  • Net income was averaging KRW 28 trillion and has a growth of 67 percent from 2014 to 2018.
  • Net income represents 9 percent of the revenue.
  • Market capitalization was erratic in movement in the last five years, however it has a growth of 88 percent in five five years.
  • Intrinsic value is greater by 65 percent against market capitalization.

Interpretation

The company was profitable and the management is capable of generating sufficient revenue for the business operation. The financials have not seen any negative bottomline in the last five years.

 

4. SAMSUNG FINANCIAL RATIOS

SAMSUNG FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset turnover (average) 0.93 0.85 0.8 0.85 0.76 0.67
Return on assets % 10.39 7.91 8.89 14.66 12.03 6.26
Return on equity % 15.07 11.17 12.49 21.02 17.26 8.83
Debt/Equity 0 0.01 0.01 0.01 0 0.01
Return on invested capital % 13.41 10.01 11.23 19.01 15.56 7.66
Interest coverage 48.01 34.43 53.25 86.74 91.66 48.71

Facts:

  • Asset turnover was averaging 0.67 in the trailing twelve months.
  • Return on asset was 6.26 percent in the trailing twelve months.
  • Return on equity was 8.83 percent in the trailing twelve months.
  • Debt/Equity ratio was 0.01 in the trailing twelve months.
  • The return on invested capital was 7.66 percent in the trailing twelve months.
  • Interest coverage was 48.71 in the trailing twelve months.

Explanation:

  • Asset turnover indicates that for every one KRW in asset, the company generates 67 chon of sales. 
  • Return on asset indicates that for every KRW invested in assets, the company generates 6.3 chon of net income.
  • Return on equity indicates that for every KRW of shareholders equity, the company generated 8.83 chon of profit.
  • Debt/Equity ratio means that the company has KRW 0.01 in debt for every KRW of asset.
  • Return on invested capital indicates that the return generated from its investment was 7.66 percent.
  • Interest coverage indicates that the company has more than enough cash to pay for the interest payment.

Interpretation

The company is liquid and financially healthy.

5. SAMSUNG KEY EXECUTIVE COMPENSATION

Name Title
Kinam King Vice Chairman and CEO
Hyun Suk King President and CEO
Dong Jin Koh President and CEO
Oh-Hyung Kwon Executive Director,Vice Chairman and CEO
Boo-Keun Yoon Executive Director,President and Co-CEO
Jong-Kyun Shin Executive Director,President and Co-CEO
Sang-Hoon Lee Executive Director,President and Chief Financial Officer

Facts:

The company does not disclose its key executive compensation. 

 

6. SAMSUNG LOBBYING AND CONTRIBUTIONS

SAMSUNG LOBBYING AND CONTRIBUTIONS

DATA

Period USD Period USD
1998 83,070,000 2009 130,550,000
1999 52,050,000 2010 131,000,000
2000 80,660,000 2011 128,440,000
2001 66,060,000 2012 124,320,000
2002 75,870,000 2013 130,730,000
2003 89,829,000 2014 119,520,000
2004 97,010,000 2015 124,770,000
2005 110,710,000 2016 121,150,000
2006 120,510,000 2017 147,520,000
2007 134,380,000 2018 147,750,000
2008 137,380,000 2019 156,390,837

Explanation

The company, Samsung Electronics Mfg and Equipment have been incurring lobbying and contributions expenses since 1998 and onwards. The figures above are the calculations by the Center of Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 from January 1 to December 31. Prior years include spending from January through December, according to the Center for Responsive Politics.

Interpretation

Total spent on Electronics Mfg and Equipment in 2019 was USD 156,390,837, the number of clients was 262.

The number of lobbyists /percent of former government employees was 1,089 at 72.73 percent.

Source:  OpenSecrets.org Center for Responsive Politics

 

7. SAMSUNG FINANCIAL STRENGTH

SAMSUNG FINANCIAL STRENGTH

DATA

Working capital 105,615,914,000
Total assets 339,357,244,000,000
Sales 229,781,171,000,000
EBIT 31,408,838,000,000
Market value of equity 375,782,850,000,000
Book value of total liabilities 99,288,251,000,000
Retained earnings 242,598,956,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.0003 1.20 0.00
B – Retained Earnings / Total Assets 0.71 1.40 1.00
C – EBIT / Total Assets 0.09 3.30 0.31
D – Market Value of Equity / Book Value of Total Liabilities 3.78 0.60 2.27
E – Sales / Total Assets 0.68 1.0 0.68
Z-Score     4.25

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

Samsung Electronics Co Ltd. has a Z-Score of 4.25. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.

Overview

Samsung Electronics Co Ltd.was profitable and is financially healthy and liquid. The calculated financial strength was strong. Based on the calculation of its intrinsic value, the stock was undervalued on the date of posting of this article and could be a good candidate for a Buy.  

 

CITATION

https://www.samsung.com/us/aboutsamsung/home/

https://www.opensecrets.org/federal-lobbying/industries/summary?cycle=2019&id=B12

https://www.morningstar.com/stocks/xkrx/005930/quote

Research and written by Criselda

 

Aboitiz Power Corporation (AP) Extended Graph Analysis

January 31st, 2020 Posted by Extended Analysis No Comment yet

Company Profile

Aboitiz logo

Aboitiz Power Corporation is an electric utility company and was incorporated in 1998 operating in the Philippines. The company is a publicly listed holding company for the Aboitiz Group’s Investments in power generation, distribution and retail electricity services.

The company owns and manages different generation plants, distribution utilities and retail electricity suppliers in the Philippines.

Aboitiz Power Corporation (AP) Extended Graph Analysis

1. AP CASH FLOWS

AP CASH FLOW

2014 2015 2016 2017 2018 2019
Net cash flow provided by operating activites 23,437,979,000 25,199,597,000 29,887,980,000 30,235,931,000 37,287,900,000 44,514,829,000
Net cash used for investing activities -12,979,595,000 -8,902,646,000 -81,380,348,000 -9,452,925,000 -7,243,119,000 -31,830,364,000
Net cash provided by (used for) financing activities -1,618,932,000 -5,448,755,000 -47,483,228,000 -32,122,699,000 -19,155,753,000 -10,939,485,000
Capital expenditure -15,040,030,000 -15,721,460,000 -28,249,166,000 -16,154,209,000 -8,660,124,000 -7,855,366,000
Free cash flow 8,397,949,000 9,478,137,000 1,638,814,000 14,081,722,000 28,627,776,000 36,659,463,000

Facts

  • The net cash flow provided by operating activities were Php 44.515 billion in the trailing twelve months.
  • Net cash used for investing activities were -Php 31.830 billion in the trailing twelve months.
  • Net cash provided by (used for) financing activities were -Php 10.939 billion in the trailing twelve months.
  • Capital expenditure was -Php 7.855 billion in the trailing twelve months.
  • Free cash flow was Php 36.659 billion in the trailing twelve months.

Explanation

  • Cash provided by operating activities increases year-over-year and has a growth of 90 percent in five years.
  • Net cash used for investing activities were investments in properties, plant and equipment; and purchases of investments.
  • Cash provided by financing activities were dividends payments.
  • Capital expenditure was purchases of property, plant and equipment.
  • Free cash flow was erratic in movement in the last five years.

Interpretation

The company was able to generate cash from operating activities in the last five years. Investment gains, changes in working capital, other working capital and other non-cash items were significant in the operating activities.

 

2. AP BALANCE SHEET

AP BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 40,231,875,000 51,098,269,000 47,094,741,000 35,699,631,000 46,343,041,000 31,478,303,000
Total current asset 56,726,089,000 70,409,021,000 73,649,187,000 67,961,596,000 88,708,607,000 71,129,407,000
Net property, plant and equipment 119,646,640,000 134,810,627,000 192,633,546,000 204,025,303,000 207,110,412,000 210,558,261,000
Total non-current assets 160,034,932,000 172,080,225,000 281,127,048,000 293,515,403,000 300,953,569,000 333,655,738,000
Total assets 216,761,021,000 242,489,246,000 354,776,235,000 361,476,999,000 389,662,176,000 404,785,145,000
Current liabilities 16,885,889,000 22,553,200,000 32,802,506,000 49,312,291,000 46,815,020,000 57,946,012,000
Non-current liabilities 107,913,040,000 122,367,525,000 216,859,310,000 196,768,338,000 215,134,240,000 225,010,464,000
Total liabilities 124,798,929,000 144,920,725,000 249,661,816,000 246,080,629,000 261,949,260,000 282,956,476,000
Stockholders equity 91,962,092,000 144,920,725,000 105,114,419,000 115,396,370,000 127,712,916,000 121,828,669,000
Retained earnings 52,581,755,000 97,568,521,000 52,597,568,000 63,006,308,000 74,427,738,000 77,227,658,000

Facts:

  • Total cash was Php 31 billion in the trailing twelve months.
  • Current assets were Php 71 billion in the trailing twelve months.
  • Net property, plant and equipment was Php 211 billion in the trailing twelve months.
  • Non-current assets were Php 334 billion in the trailing twelve months.
  • Total assets were Php 405 billion in the trailing twelve months.
  • Current liabilities were Php 58 billion in the trailing twelve months.
  • Stockholders equity was Php 122 billion in the trailing twelve months.
  • Retained earnings were Php 77 billion in the trailing twelve months.

Explanation:

  • Total cash was erratic in movement in the last five years and it increased 15 percent from 2014 to 2018.
  • Current assets had grown 56 percent in five years.
  • Net property, plant and equipment increases year-over-year and has grown 73 percent in five years.
  • Net property, plant and equipment represent 53 percent of the total assets.
  • Non-current assets represent 77 percent of total assets.
  • Total assets have grown 80 percent in five years.
  • Current liabilities represent 20 percent of total liabilities.
  • Non-current liabilities represent 82 percent of the total liabilities.
  • Total liabilities represents 70 percent of total liabilities and stockholders equity.
  • Stockholders equity represents 30 percent of the total liabilities and stockholders equity.
  • Retained earnings represents 63 percent of stockholders equity.

Interpretation

The balance sheet was stable. However, the company is utilizing more of creditors money than that of the shareholders investments from the company, in other terms, the creditors have more stakes than the shareholders. Total debt is greater by 75 percent against the stockholders equity.

 

3. INCOME AND MARKET

AP INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 86,759,386,000 85,173,952,000 89,163,269,000 119,391,303,000 131,572,084,000 126,148,155,000
EBIT 23,093,515,000 25,218,714,000 26,551,002,000 34,397,385,000 36,874,863,000 31,400,758,000
Net Income 16,705,184,000 17,603,797,000 20,002,582,000 20,416,442,000 21,707,603,000 18,490,435,000
EBITDA 31,902,851,000 33,360,244,000 38,715,225,000 45,690,873,000 48,937,537,000 47,343,776,000
Market Capitalization 315,684,000,000 306,854,000,000 306,854,000,000 305,750,000,000 258,267,000,000 251,664,000,000
Intrinsic Value 249,741,775,326 309,067,785,513 363,779,625,016 568,374,432,825 466,764,451,508 796,320,851,627

Facts:

  • Revenue was Php 128 billion in the trailing twelve months.
  • EBIT was Php 31 billion in the trailing twelve months.
  • Net income was Php 18 billion in the trailing twelve months.
  • EBITDA was Php 47 billion in the trailing twelve months.
  • Market capitalization was Php 252 billion in the trailing twelve months.
  • Intrinsic value was Php 796 billion in the trailing twelve months.

Explanation

  • Revenue increases year-over-year and has a growth of 52 percent in five years.
  • EBIT increases year-over-year and has grown 60 percent in five years.
  • Net income increases year-over-year and has grown 30 percent in five years.
  • Net income represents 17 percent of revenue.
  • EBITDA increases year-over-year and has grown 53 percent in five years.
  • Market capitalization is lower by 173 percent against intrinsic value.
  • Intrinsic value was higher by 216 percent against market capitalization.

Interpretation

The company is profitable and has not seen any negative in its bottomline in the last five years. Its bottomline increases year-over-year, the management was able to generate sufficient revenue for the operation of the business.

 

4. AP FINANCIAL RATIOS

AP FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset turnover (average) 0.42 0.37 0.3 0.33 0.35 0.32
Return on assets % 8.14 7.67 6.70 5.70 5.78 4.74
Return on equity % 18.6 18.58 19.74 18.52 17.86 15.00
Debt/Equity 1.02 1.10 1.90 1.54 1.50 1.63
Return on invested Capital % 11.93 11.14 9.66 9.13 9.49 8.46
Interest coverage 4.68 4.47 4.26 3.39 3.38 2.81

Facts:

  • Asset turnover was averaging 0.32 in the trailing twelve months.
  • Return on assets were 4.74 percent in the trailing twelve months.
  • Return on equity was 15 percent in the trailing twelve months.
  • Debt/Equity was 1.63 in the trailing twelve months.
  • Return on invested capital was 8.46 percent in the trailing twelve months.
  • Interest coverage was 2.81 in the trailing twelve months.

Explanation

  • Asset turnover indicates that the company generates 0.32 centavos of sales for every one peso investment in assets.
  • Return on assets indicates that every peso invested in assets generates 4.74 centavos of net income.
  • Return on equity  means that every one Peso of equity, the company generated 15 centavos in profit.
  • Debt-to-equity ratio means for every Peso of the equity its shareholders own the company owes Php1.63.
  • Return on invested capital was 8.46 percent or 8 centavos for every Peso invested in the company.
  • Interest coverage means that the company is making more than enough money to pay its interest obligations.

Interpretation

Financial ratios show that the company is performing acceptably. 

 

5. AP KEY EXECUTIVES

 

Name Title Effective
Emmanuel V. Rubio President, Chief Executive Officer January 1, 2020
Erramon I. Aboitiz President and Chief Operating Officer September 1, 2018
Liza Luv T. Montelibano Chief Financial Officer – Power Generation Group January 2, 2014
Ma. Racquel J. Bustamante First Vice President & CFO – Generation Business Group July 1, 2018
Ma. Chona Y. Tiu First Vice President and Chief Financial Officer – Power Distribution Group January 2, 2014
Manuel Alberto R. Colayco Corporate Secretary March 1, 2018
Joseph Trillana T. Gonzales General Counsel of AboitizPower January 1, 2015

Facts:

  • Emmanuel V. Rubio –  President, CEO
  • Erramon I. Aboitiz – President and COO
  • Liza Luv T. Montelibano – CFO Power Generation Group
  • Ma. Raquel J. Bustamante – First VP and CFO – Generation Business Group
  • Ma. Chona T. Tiu – First VP and CFO – Power Distribution Group
  • Manuel Alberto R. Colayco – Corporate Secretary
  • Joseph Trillana T. Gonzales – General Counsel of Aboitiz Power

DIRECTORS ALLOWANCE

Aboitiz Power Corp has not disclosed any compensation of the key executives, however, the Director’s/Committee member and Chairman of the Board per meeting were available as follows:

Directors/Committee Members Chairman of the Board
(In Php) From To From To
Monthly Allowance per Meeting 120,000 150,000 180,000 200,000

 

Directors/Committee Members Chairman of the Board/ Committee
(In Php) From To From To
Board Meeting 100,000 150,000 150,000 200,000
Committee Meeting 80,000 100,000 100,000 130,000

 

6. AP LOBBYING AND CONTRIBUTIONS

THERE WAS NO LOBBYING AND CONTRIBUTIONS FOUND FOR ABOITIZ POWER CORP IN OPENSECRET.ORG AND OTHER SOURCES.

OpenSecret.org

 

7. AP FINANCIAL STRENGTH

AP FINANCIAL STRENGTH

DATA

Working capital 41,894,000,000
Total assets 389,662,176,000
Sales 126,148,155,000
EBIT 31,400,758,000
Market value of equity 251,664,000,000
Book value of total liabilities 261,949,260,000
Retained earnings 74,427,738,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.11 1.20 0.13
B – Retained Earnings / Total Assets 0.19 1.40 0.27
C – EBIT / Total Assets 0.08 3.30 0.27
D – Market Value of Equity / Book Value of Total Liabilities 0.96 0.60 0.58
E – Sales / Total Assets 0.32 1.0 0.32
Z-Score 1.56

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The Z-Score of Aboitiz Power Corp was 1.56. Dr. Altman’s grading scale of 1 to 1.8 indicates that the company will declare bankruptcy in the future. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Total liabilities represents two-thirds of the total liabilities and equity.

OVERVIEW

The balance sheet is stable. The company is utilizing more of creditors money in its business operation than that of the investors money. The earnings per share is Php 2.51 which is an acceptable ratio. Moreover, based on the calculation of its intrinsic value the stock of AP is undervalued.

CITATION

https://aboitizpower.com/

https://www.morningstar.com/stocks/xphs/ap/quote

Researched and written by Criselda

 

BDO Unibank Inc (BDOUF) Extended Graph Analysis

January 23rd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

BDO

BDO Unibank Inc (BDOUF) is a Philippine Banking Company  and, the largest in the Philippines in terms of assets, loans and deposits. Moreover, the bank is the 15th largest in SouthEast Asia. It was founded on January 2, 1968 in Manila and headquartered in Makati. Its key areas are the Philippines, Asia, Europe, Middle East and North America. BDO Unibank is registered under the Philippine Stock Exchange (PSE) with ticker symbol BDOUF.

As a full service universal bank, it caters banking services including foreign exchange, brokerage, trust and investment and credit cards, corporate cash management and remittances. 

 

BDO Unibank Inc (BDOUF) Extended Graph Analysis

1. BDOUF CASH FLOW

BDOUF CASH FLOWS

2014 2015 2016 2017 2018 2019
Net cash flow provided by operating activities -33,605,000,000 -12,928,000,000 37,249,000,000 -2,819,000,000 90,312,000,000 23,730,000,000
Net cash used for investing activities -490,000,000 -10,211,000,000 -30,318,000,000 -67,731,000,000 -56,740,000,000 -63,597,000,000
Net cash provided by (used for) financing activities 5,220,000,000 -10,837,000,000 -1,545,000,000 83,983,000,000 2,399,000,000 19,726,000,000
Capital expenditure -5,970,000,000 -6,963,000,000 -5,537,000,000 -6,158,000,000 -8,135,000,000 -4,060,000,000
Free cash flow -39,575,000,000 -19,891,000,000 31,712,000,000 -8,977,000,000 82,177,000,000 19,670,000,000

Facts:

  • Net cash flow provided by operating activities is Php 23.730 billion.
  • Net cash used for investing activities is -Php 63.597 billion.
  • Net cash provided by (used for) financing activities is Php 19.726 billion.
  • Capital expenditure is -Php 4.060 billion.
  • Free cash flow is Php 19.670 billion.

Explanation

  • Cash from operation increased by more than 3,000 percent at Php 87 billion in 2018, however showed a decreased of 74 percent at Php 67 billion in the trailing twelve months.
  • Cash used for investing activities were investment in property, plant and equipment; and purchases of investments.
  • Cash provided by (used for) financing activities were debt issued and repayments plus dividends payments.
  • Capital expenditure is investment in property, plant and equipment.
  • Free cash flow had a growth of 150 percent in five years.

Interpretation

The net change in cash was Php 36 billion in 2018 and -Php 20 billion in the trailing twelve months. In other words, cash at the beginning was higher than the cash at the end in the trailing twelve months.

2. BDOUF BALANCE SHEET

BDOUF BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 41,342,000,000 42,729,000,000 40,909,000,000 45,006,000,000 53,749,000,000 53,749,000,000
Total assets 179,669,000,000 199,613,000,000 217,535,000,000 298,340,000,000 328,149,000,000 364,036,000,000
Total liabilities 633,000,000 623,000,000 743,000,000 852,000,000 777,000,000 1,684,000,000
Equity 179,036,000,000 198,990,000,000 216,792,000,000 297,488,000,000 327,372,000,000 362,352,000,000
Retained earnings 70,242,000,000 88,118,000,000 109,216,000,000 133,529,000,000 156,327,000,000 156,327,000,000

Facts:

  • Total cash was Php 54 billion in 2018 and in 2019 trailing twelve months respectively.
  • Total assets were Php 328 and Php 364 billion in 2018 and the trailing twelve months respectively.
  • Total liabilities were Php 777 million and Php 1.684 billion in 2018 and the trailing twelve months respectively.
  • Equity was Php 327 and Php 362 billion in 2018 and the trailing twelve months respectively.
  • Retained earnings were Php 156 billion in 2018 and the trailing twelve months.

Explanation

  • Total cash represents 15 percent of the total assets in 2018 and 2019 trailing twelve months.
  • Total assets have grown 103 percent in 5 years.
  • Total liabilities increased by 117 percent from 2018 to the trailing twelve months.
  • Total liabilities is less than half percent or 0.46 percent of the total liabilities and shareholders equity.
  • Equity has grown by 102 percent in five years.
  • Equity is 99.5 percent of the total liabilities and shareholders equity.
  • Retained earnings have grown 123 percent in five years.
  • Retained earnings represents 43 percent of equity in the trailing twelve months.

Interpretation

BDO has a strong balance sheet. The company is using investor’s investment more than creditors in its business operation. The shareholders have more stake in the business.

3. BDOUF INCOME AND MARKET

BDOUF INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 76,498,000,000 84,414,000,000 101,087,000,000 116,087,000,000 133,102,000,000 158,433,000,000
EBIT 31,576,000,000 33,134,000,000 36,704,000,000 43,769,000,000 49,417,000,000 60,639,000,000
Net Income 22,805,000,000 25,016,000,000 26,090,000,000 28,070,000,000 32,708,000,000 43,297,000,000
Market Capitalization 8,780,000,000 8,157,000,000 8,249,000,000 14,373,000,000 10,890,000,000 13,627,000,000
Intrinsic Value 29,973,663,795 31,891,119,154 32,652,745,225 48,480,991,154 53,494,073,808 47,668,058,944

Facts:

  • The total revenue was Php 158 billion in the trailing twelve months.
  • EBIT was Php 61 billion in the trailing twelve months.
  • Net income was Php 43 billion in the trailing twelve months.
  • The market capitalization was Php 13.6 billion in the trailing twelve months.
  • The intrinsic value was Php 47.668 billion in the trailing twelve months.

Explanation

  • Revenue has grown 107 percent in five years.
  • Revenue growth year-over-year is increasing from 2014 to the trailing twelve months.
  • EBIT has grown 92 percent in five years.
  • EBIT represents 38 percent of the revenue in the trailing twelve months.
  • Net income has grown 90 percent in five years.
  • Net income represents 27 percent of the total revenue in the trailing twelve months.
  • Net income year-over-year growth was 16.52 percent in 2018.
  • Market capitalization had increased 55 percent from 2014 to the trailing twelve months 2019.The value was increasing year-over-year.
  • The intrinsic value has grown 59 percent in five years and it is increasing year-over-year from 2014 to 2018.
  • Intrinsic value was greater by 250 percent against market capitalization in the trailing twelve months.

Interpretation

The company is profitable. The record shows that from revenue down to the bottomline, the management is efficient in generating sufficient income for its business operation.There was no record of negative earnings in the last five years.

4. BDOUF FINANCIAL RATIOS

BDOUF FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset turnover (average) 0.04 0.04 0.05 0.05 0.05 0.05
Return on assets % 1.27 1.27 1.18 1.11 1.14 1.43
Return on equity % 13.52 13.42 12.70 11.00 10.53 12.86
Debt/Equity 0.63 0.56 0.52 0.48 0.48 0.50

Facts:

  • Asset turnover was averaging 0.05 in the trailing twelve months.
  • Return on assets was 1.43 percent in the trailing twelve months.
  • Return on equity was 12.86 percent in the trailing twelve months.
  • Debt/Equity was 0.50 in the trailing twelve months.

Explanation

  • Asset turnover indicates that the company is making 50 centavos of sales for every one Peso invested in assets.
  • Return on assets indicates that the company produced Php 1.43 of net income utilizing its investment in assets.
  • Return on equity means that for every Peso in common shareholders equity, the company generated 13 centavos of profit.
  • Debt to equity indicates that the assets of the company are funded 2 is to 1 by shareholders to creditors. In other terms shareholders own 66.6 centavos for every Peso of company assets while creditors own 33.3 centavos for every Peso.

Interpretation

The financial ratios of the company shows that the management is performing well in the operation of its business.

5. BDOUF KEY EXECUTIVES

Name Title
Teresita T. Sy-Coson President and CEO
Edmundo L. Tan Corporate Secretary
Sabino E. Acut Jr. Assistant Corporate Secretary
Albin C. Go Head – Legal
Daimacio D. Martin Treasurer
Marilyn K. Go Deputy Treasurer
Estrelita V. Ong Chief Internal Auditor
Federico P. Tancongco Chief Compliance Officer
Evelyn L. Villanueva Chief Risk Officer

Facts:

  • Teresita T. Sy-Coson – President and Chief Executive Officer
  • Edmundo L. Tan – Corporate Secretary
  • Sabino E. Acut Jr. – Assistant Corporate Secretary
  • Albin C. Go – Head – Legal
  • Damacio D. Martin – Treasurer
  • Marilyn K. Go – Deputy Treasurer
  • Estrelita V. Ong – Chief Internal Auditor
  • Federico P. Tancongco – Chief Compliance Officer
  • Evelyn L. Villanueva – Chief Risk Officer

Explanation

Hence, the operation of the business is considered productive in the last five years the key executive team has the capabilities and talented in managing its business operations very well. 

6. LOBBYING AND CONTRIBUTIONS

NO POLITICIANS OR LOBBYIST FOUND IN OPENSECRET.ORG AND IN OTHER SOURCES

 

7. BDOUF FINANCIAL STRENGTH

BDOUF FINANCIAL STRENGTH

DATA

Working capital 0
Total assets 364,036,000,000
Sales 158,433,000,000
EBIT 60,639,000,000
Market value of equity 13,627,000,000
Book value of total liabilities 1,684,000,000
Retained earnings 7,031,035,092

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.00 1.20 0.00
B – Retained Earnings / Total Assets 0.02 1.40 0.03
C – EBIT / Total Assets 0.17 3.30 0.55
D – Market Value of Equity / Book Value of Total Liabilities 8.09 0.60 4.86
E – Sales / Total Assets 0.44 1.0 0.44
Z-Score     5.87

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

BDOUF has a Z-Score of 5.87. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.

OVERVIEW

The financials show that the balance sheet is stable and strong.The company is profitable and the management is efficient in producing sufficient revenue for the operation of the business. Moreover, the earnings per share growth was erratic in movement from 2010 to the current date 2019, however, its year-over-year growth was 43.16 percent in the trailing twelve months. 

Overall, the stock of BDO Unibank Inc was currently undervalued from the day this article was published, and the stock is a good opportunity for a Buy.

 

CITATION

https://www.bdo.com.ph/sites/default/files/pdf/BDO%20Unibank%202018%20Annual%20Report.pdf

https://www.bdo.com.ph/company-disclosures/sec-filings

Researched and written by Criselda

 

COL Financial Group Inc (COL) Extended Graph Analysis

December 19th, 2019 Posted by Extended Analysis No Comment yet

About the Company

COL Financial

COL Financial Group Inc (COL) is an online stock trading services, formerly CitisecOnline.com Inc. Incorporated on August 16, 1999 and the company’s new name was approved by the SEC on February 21, 2012.

COL is a publicly listed company in the Philippine Stock Exchange (PSE). On January 2001 the company launched its proprietary online trading platform, and became  the leading online financial services provider in the Philippines. 

The company established its wholly owned foreign subsidiary COL Securities (HK) Limited (the “HK Subsidiary” or “COLHK”) on June 20, 2001 to provide investors with online access to HK stock market. COLHK was a broker with Interactive Brokers (IB).

 

1. COL CASH FLOWS

COL CASH FLOW

2014 2015 2016 2017 2018 2019
Net cash provided by operating activities 1,724,035,060 2,116,349,463 1,204,000,608 3,342,946,006 -753,862,651 449,925,197
Net cash used for investing activities -12,046,372 -26,112,260 -235,496,719 -267,019,663 -31,284,294 -47,052,277
Net cash provided by (used for) financing activities -275,790,000 -236,825,000 -236,500,000 -285,600,000 -333,200,000 -382,100,000
Capital expenditure -12,102,102 -26,113,336 -35,503,862 -63,977,777 -31,284,294 -47,060,759
Free cash flow 1,711,925,958 2,090,236,127 1,168,496,746 3,278,968,229 -785,146,945 398,864,438
Working Capital 1,200,000,000 1,228,000,000 1,114,000,000 983,000,000 1,150,000,000 1,150,000,000

Facts:

  • Net cash from operation was Php 449.9 million in 2019.
  • Net cash used for investing activities were Php -47 million in 2019.
  • Net cash provided by (used for) financing activities were Php -382 million in 2019.
  • Capital expenditures were Php -47 million in 2019.
  • Free cash flow was Php 398.9 million in 2019.
  • Working capital was Php 1.150 billion in 2019.

Explanation:

  • Cash from operation had an increase of 160 percent from 2018 to the trailing twelve months.. 
  • In 2018 cash from operation was negative due to huge amount of changes in working capital.
  • Net cash used for investing activities were investment in property, plant and equipment and purchases of intangibles.
  • Net cash provided by financing activities were dividend payments.
  • Capital expenditures were investment in property, plant and equipment; and purchases of intangibles.
  • Free cash flow was erratic in movement and has a negative growth of 77 percent in five years. 
  • The working capital indicates that COL is capable of meeting current obligations using its current assets.

Interpretation

The company has managed to generate cash from its principal business operations from 2014 except in 2018 where it suffered a negative result due to significant disbursements.

 

2. COL BALANCE SHEET

COL BALANCE SHEET

2014 2015 2016 2017 2018 2019
Cash and cash equivalents 4,649,563,456 6,495,273,522 7,227,706,547 10,017,107,305 9,526,808,545 9,526,808,545
Current assets 6,256,513,502 7,837,202,198 8,568,619,424 11,315,962,825 10,530,872,434 10,530,872,434
Net property, plant and equipment 35,825,494 44,268,412 60,667,539 85,996,168 76,030,681 76,030,681
Non-current assets 104,891,220 115,628,820 336,122,058 564,874,523 587,738,648 587,738,648
Total assets 6,361,404,722 7,952,831,018 8,904,741,482 11,880,837,348 11,118,611,082 11,118,611,082
Current liabilities 5,056,759,000 6,609,562,286 7,454,399,737 10,332,663,716 9,380,783,286 9,380,783,286
Total non-current liabilities 28,192,690 26,277,714 28,826,298 43,549,010 44,257,971 44,257,971
Total liabilities 5,084,951,690 6,635,840,000 7,481,226,298 10,376,212,726 9,425,041,257 9,425,041,257
Stockholders’ equity 1,276,453,032 1,316,991,018 1,423,515,447 1,504,624,622 1,693,569,825 1,693,569,825

Facts:

  • Cash and cash equivalents were Php 9.527 billion in 2018..
  • Current assets were Php 10.531 billion in 2018.
  • Net property, plant and equipment was Php 76 million.in 2018.
  • Non-current assets were Php 588 million in 2018.
  • Total assets were Php 11.119 billion in 2018.
  • Current liabilities were Php 9.381 billion in 2018.
  • Non-current liabilities  were Php 44 million in 2018.
  • Total liabilities were Php 9.425 billion in 2018.
  • Stockholders’ equity was Php 1.694 billion in 2018.

Explanation

  • Cash and cash equivalent increases year-over-year and it has a growth of 105 percent in five years.
  • Cash and cash equivalents represents 90 percent of total current assets.
  • Current assets has a growth of 68 percent in five years. The decrease was 7 percent from 2017 to 2018.
  • Current assets represents 90 percent of the total assets.
  • Net property, plant and equipment had a growth of 112 percent in five years.
  • Net property, plant and equipment represents 13 percent of total non-current assets.
  • Non-current assets increases year-over-year and has a growth of 460 percent in five years.
  • Non-current assets represents 5 percent of total assets.
  • Total assets has a growth of 75 percent in five years.
  • Current liabilities represents 99.53 percent of the total liabilities.
  • Accounts payable has a significant amount which represents 99 percent of current liabilities.
  • Non-current liabilities represents 0.47 percent of total liabilities.
  • Total liabilities represents 85 percent of the total liabilities and stockholders equity.
  • Stockholders’ equity represents 15 percent of the total liabilities and stockholders’ equity.

Interpretation

Col Financial has a huge amount of accounts payable which represents 98 percent of the total liabilities. These accounts payables are actually trade payables which comprise of the following:

Php
Customers* 8,989,453,360
Clearing house 265,379,830
Dividends Payable 22,160,
Total 9,254,855,150

* Payable to customers are money balances amounting to Php 8,989,453,360 are noninterest-bearing and has no specific credit terms.

 

3. COL INCOME AND MARKET

COL INCOME AND MARKET

2014 2015 2016 2017 2018 TTM
Sales 711,550,710 737,037,592 833,719,568 969,394,284 1,154,701,557 1,046,191,248
EBIT 342,558,453 368,256,787 439,386,101 532,973,159 694,077,186 578,881,301
Net Income 262,267,000 262,693,342 328,482,350 378,721,215 512,554,189 521,797,076
EBITDA 357,789,777 380,792,153 458,127,308 535,175,045 755,094,045 643,886,804
Market Capitalization 7,232,000,000 7,125,000,000 7,664,000,000 7,378,000,000 7,730,000,000 8,663,200,000
Intrinsic Value