Monthly Archives: November, 2019

PJSC LUKOIL Company (LKOH) Extended Graph Analysis

November 27th, 2019 Posted by Extended Analysis No Comment yet

About the Company

Lukoil

Lukoil is an oil and gas company, specializes in oil and gas exploration, refining, transportation, marketing and distribution. The company produces petroleum products and petrochemicals, their products are sold internationally in Russia, Eastern and Western Europe, near-abroad countries and the USA.

The company is operating under the following segments: Exploration and Production, Refining, Marketing and Distribution and Corporate and Other.

Lukoil was founded by Vagit Alekperov on November 25, 1991, headquartered in Moscow, Moscow. The company’s date of IPO was on April 18, 20013 registered under the ticker MCX:LKOH.

 

PJSC Lukoil Company Extended Graph Analysis

1. LKOH CASH FLOWS

LKOH CASH FLOWS

2014 2015 2016 2017 2018 2019
Net cash provided by operating activities 865,369,697,920 848,972,000,000 752,247,000,000 758,490,000,000 1,006,651,000,000 1,109,952,000,000
Net cash provided for investing activities -813,952,240,920 -525,722,000,000 -500,343,000,000 433,286,000,000 420,392,000,000 415,243,000,000
Net cash provided by (used for) financing activities 58,921,626,400 -253,063,000,000 -193,134,000,000 247,395,000,000 468,549,000,000 523,214,000,000
Capital expenditures -813,952,240,920 -601,325,000,000 -499,679,000,000 -512,108,000,000 -451,679,000,000 -431,851,000,000
Free cash flows 51,417,457,000 247,647,000,000 252,568,000,000 246,382,000,000 554,972,000,000 678,101,000,000

Facts:

  • Cash from operating activities were RUB 1.1 trillion in 2019.
  • Cash provided for investing activities were RUB -415 billion in 2019.
  • Net cash from financing activities were RUB -523 billion in 2019.
  • Capital expenditures were RUB -431.9 billion in 2019.
  • Free cash flows were RUB 678 billion in 2019.

Explanation

  • Cash from operating activities increases year-over-year as net income increases year-over-year.
  • Cash from investing activities were the investment in property, plant and equipment; acquisitions, purchases of investments and purchases of intangibles.
  • Net cash provided by financing activities were debt repayment, common stock repurchased, dividend paid and other financing activities.
  • Capital expenditures are investments in property, plant and equipment.
  • Free cash flows had a growth of 1219 percent in five years and increases year-over-year.

Interpretation

The company was efficient in providing cash from operations year-over-year in the last five years. Further, the management was able to provide a positive free cash flow in the last five years.

 

2. LKOH BALANCE SHEET

LKOH BALANCE SHEET

2014 2015 2016 2017 2018
Total cash 179,988,892,720 281,031,000,000 278,301,000,000 349,951,000,000 518,850,000,000
Total current assets 1,265,091,787,960 1,213,647,000,000 1,255,641,000,000 1,308,114,000,000 1,478,479,000,000
Net property, plant and equipment 4,528,460,507,480 3,411,153,000,000 3,391,366,000,000 3,575,165,000,000 3,829,164,000,000
Total non-current assets 4,949,472,204,040 3,806,960,000,000 3,759,023,000,000 3,918,101,000,000 4,253,903,000,000
Total assets 6,214,563,992,000 5,020,607,000,000 5,014,673,000,000 5,226,215,000,000 5,732,382,000,000
Short-term debt 118,788,222,280 60,506,000,000 58,429,000,000 128,713,000,000 99,625,000,000
Total current liabilities 789,994,485,280 695,168,000,000 830,686,000,000 958,847,000,000 914,560,000,000
Total non-current liabilities 914,841,629,520 1,102,971,000,000 963,107,000,000 784,417,000,000 752,262,000,000
Total liabilities 1,704,836,114,800 1,798,139,000,000 1,793,793,000,000 1,743,264,000,000 1,666,822,000,000
Total stockholders’ equity 4,509,727,877,200 3,222,468,000,000 3,220,880,000,000 3,482,951,000,000 4,065,560,000,000

Facts:

  • Cash was RUB 518.9 billion in 2018.
  • Current assets were RUB 1.478 trillion in 2018.
  • Net property, plant and equipment was RUB 3.8 trillion in 2018.
  • Non-current assets were RUB 4.254 trillion in 2018.
  • Total assets were RUB 5.7 trillion in 2018.
  • Short-term debt was RUB 99.6 billion in 2018.
  • Current liabilities were RUB 914.6 billion in 2018.
  • Non-current liabilities were RUB 752 billion in 2018.
  • Total liabilities were RUB 1.667 trillion in 2018.
  • Shareholders equity was RUB 4.066 trillion in 2018.

Explanation

  • Cash has a growth of 188 percent in five years and it represents 35 percent of current assets.
  • Current assets increased by 17 percent in 5 years and it represents 26 percent of total assets.
  • Net property, plant and equipment decreased by 15 percent in five years and it represents 90 percent of total non-current assets.
  • Non-current assets decreased by 14 percent in five years and it represents 74 percent of the total assets.
  • Total assets decreased by 8 percent due to property, plant and equipment.
  • Short-term debt represents 11 percent of total current liabilities.
  • Current liabilities represents 55 percent of total liabilities.
  • Non-current liabilities represents 45 percent of total liabilities.
  • Total liabilities represents 29 percent of the total liabilities and equities.
  • Stockholders equity represents 71 percent of the total liabilities and equities.

Interpretation

The company has a sound balance sheet in the last five years. The company is operating its business using two-thirds of the shareholders investment and one-third using the creditor’s money.

 

3. LKOH INCOME AND MARKET

LKOH INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 8,013,730,295,480 5,749,050,000,000 5,227,045,000,000 5,936,705,000,000 8,035,889,000,000 8,325,588,000,000
EBIT 493,552,000,760 464,692,000,000 416,820,000,000 503,811,000,000 768,721,000,000 860,157,000,000
Net Income 263,813,244,240 291,135,000,000 206,794,000,000 418,805,000,000 619,174,000,000 673,275,000,000
Market Capitalization USD 30,216,000,000 22,762,000,000 40,646,000,000 41,078,000,000 49,695,000,000 66,635,000,000
Intrinsic Value USD 31,345,008,852 32,862,137,222 123,791,444,678 119,855,455,079 98,365,393,274 185,462,883,775
EBITDA 901,889,989,000 784,162,000,000 624,386,000,000 872,354,000,000 1,148,295,000,000 1,251,370,000,000

Facts:

  • Revenue was RUB 8.326 trillion or USD 130 billion in 2019.
  • EBIT was RUB 860 billion USD 13.455 billion in 2019.
  • Net income was RUB 673 billion or USD 10.532 billion in 2019.
  • Market capitalization was USD 66.6 billion or RUB 4.260 trillion in 2019.
  • Intrinsic value was USD 185 billion or RUB 11.856 trillion in 2019.
  • EBITDA was RUB 1.251 trillion or USD 19.574 billion in 2019.

Explanation

  • Revenue was erratic in movement in the last five years and has grown only 4 percent..
  • EBIT has a growth of 74 percent in five years.
  • Net income has a growth of 155 percent in five years. Further, it represents 8 percent of the total revenue.
  • Market capitalization increased by 121 percent in five years.
  • Intrinsic value increased by 492 percent in five years. Moreover, intrinsic value was greater by 178 percent against market capitalization.
  • EBITDA has a growth of 39 percent in five years. 

Interpretation

The company is profitable, the management has proficiently managed its business operation in the last five years.

4. LKOH FINANCIAL RATIOS

LKOH FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset Turnover (average) 1.63 1.02 1.04 1.16 1.47 1.46
Return on Asset (ROA) % 5.38 5.18 4.12 8.18 11.3 11.82
Return on Equity (ROE) % 7.44 7.53 6.42 12.49 16.41 17.74
Financial Leverage (avg) 1.37 1.56 1.56 1.5 1.41 1.53
Return on Invested Capital % 6.83 6.71 5.71 10.67 14.51 15.74
Interest Coverage 11.63 9.83 7.76 23.68 25.01 22.62

Facts:

  • Asset turnover was averaging 1.46 in 2019.
  • Return on assets was 11.82 percent in 2019.
  • Return on equity was 17.74 percent in 2019.
  • Financial leverage was averaging 1.53 in 2019.
  • The return on invested capital was 15.74 percent in 2019.
  • Interest coverage 22.62 in 2019.

Explanation

  • Asset turnover indicates that the company is generating $1.46 of net sales for every dollar in assets.
  • Return on assets indicates that every dollar invested in the entire asset base produced 0.1182 cents.
  • Return on equity indicates that every dollar of shareholders equity generated 17.7 cents in profit.
  • Financial leverage indicates that in every dollar in equity LKOH had $1.53 in total assets. $0.53 was borrowed.
  • Return on invested capital indicates that 15.74 percent is the return that the company makes over its capital. 
  • Interest coverage indicates that the company is making more than enough money to cover interest payments 22 times over.

Interpretation

The company is profitable and management is efficient in the performance of its business operations.

5. LKOH KEY EXECUTIVE COMPENSATION

LKOH COMPENSATION OF DIRECTORS AND MANAGEMENT COMMITTEE MEMBERS

REMUNERATION OF DIRECTORS AND MANAGEMENT COMMITTEE MEMBERS

2016 2017 2018
Remuneration for performance of duties of a member of the Board of Directors, RUB 6,000,000 6,500,000 6,750,000
Total amount paid to members of the Board of Directors, RUB million * 192,400,000 261,100,000 816,800,000
Total amount paid to members of the Management Committee, RUB million ** 1,636,300 1,738,800 5,502,400***

* This amount includes, among others, payments to Directors who are employed by the Company but are not members of the Management Committee (such as salary, bonuses and other types of remuneration).

** Including the remuneration of the President of PJSC LUKOIL

*** With due regard for execution of the Regulations on Long-Term Incentives for Employees of PJSC LUKOIL and its Subsidiaries in 2013-2017

Facts:

  • Compensation for performance of duties of a member of a Board of Directors was RUB 6,750,000 in 2018.
  • Total amount paid to members of the Board of Directors was RUB 816,800,000 in 2018.
  • Total amount paid to members of the management committee was RUB 5,502,400 in 2018.

LUKOIL KEY PEOPLE

NAME TITLE
Ravil Ulfatovich Maganov Executive Director, Vice Chairman
Vagit Yusufovich Alekperov CEO, Director. President
Leonid Arnoldovich Fedun/ Executive Director Executive Director
Lyubov N Khoba/ Executive Director Director, Chief Accountant, President

 

6. LKOH LOBBYING AND CONTRIBUTIONS

 

No Politicians or Lobbyist Found – OpenSecret.org  

Center for Responsive Politics

 

7. LKOH FINANCIAL STRENGTH

LKOH FINANCIAL STRENGTH

DATA

(in RUB)
Working capital 563,919,000,000
Total assets 5,732,382,000,000
Sales 8,325,588,000,000
EBIT 860,157,000,000
Market value of equity 4,342,735,440,000
Book value of total liabilities 1,666,822,000,000
Retained earnings 3,963,628,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.10 1.20 0.12
B – Retained Earnings / Total Assets 0.69 1.40 0.97
C – EBIT / Total Assets 0.15 3.30 0.50
D – Market Value of Equity / Book Value of Total Liabilities 2.61 0.60 1.56
E – Sales / Total Assets 1.45 1.0 1.45
Z-Score 4.60

 

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

 

Explanation:

Z-Score is a statistical measurement that compare 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.

Lukoil has a Z-Score of 4.60. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy. In other terms, the company is not close to insolvency. The main factors of this statistical measurement is the profitability, liquidity, leverage and efficiency.

 

CITATION

http://www.lukoil.com/

https://www.opensecrets.org/search?q=++PJSC+Lukoil+LKOH&type=indiv

 

Reseahttps://www.morningstar.com/stocks/xlon/lkoh/quoterched and written by Criselda

 

 

 

 

Vestas Wind System A/S (VWS) Extended Graph Analysis

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

About the Company

vestas

Vestas Wind System manufactures wind turbines around the world. Vestas is an energy industry that install and service wind turbines. The company has more than 108 GW wind turbines in 80 countries.

Vestas is a Danish company founded in 1945, headquartered in Hedeager 42 Aarhus N, 8200 Denmark with more than 25,000 employees  Vestas is under Energy Sector and under Renewable Energy Industry.

 

Vestas Wind System A/S (VWS) Extended Graph Analysis

 

1. VWS CASH FLOWS

VWS CASH FLOWS

2014 2015 2016 2017 2018 2019
Net cash provided by operating activities 1,126,000,000 1,472,000,000 2,181,000,000 1,625,000,000 1,021,000,000 1,357,000,000
Net cash used for investing activities -285,000,000 -425,000,000 -817,000,000 -407,000,000 -603,000,000 21,000,000
Net cash provided by (used for) financing activities 389,000,000 -360,000,000 -611,000,000 -974,000,000 -639,000,000 -249,000,000
Capital expenditure -278,000,000 -368,000,000 -489,000,000 -491,000,000 -607,000,000 -733,000,000
Free cash flow 848,000,000 1,104,000,000 1,692,000,000 1,134,000,000 414,000,000 624,000,000

Facts

  • Cash provided by operating activities was $1.357 billion in 2019.
  • Net cash used for investing activities was $21 million in 2019.
  • Net cash provided by (used for) financing activities was -$249 million in 2019.
  • Capital expenditure was -$733 million in 2019.
  • Free cash flow was $624 million in 2019.

Explanation

  • Cash from operation had a growth of 21 percent in five years.
  • Cash from investing activities, purchases of investments and other investing activities have a significant amount.
  • Cash from financing activities were common stock repurchases and dividend payment.
  • Capital expenditures are purchases of property, plant and equipment and purchase of intangibles.
  • Free cash flow although erratic in movement in the last five years, it has a positive results year-over-year.

Interpretation

The company managed to generate cash for the operation of the business. Its net income is sufficient to generate positive operating cash flow.

 

2. VWS BALANCE SHEET

VWS BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 1,819,000,000 2,569,000,000 3,226,000,000 3,204,000,000 3,308,000,000 3,308,000,000
Total current assets 4,696,000,000 5,976,000,000 6,950,000,000 8,006,000,000 8,555,000,000 8,555,000,000
Net property, plant and equipment 1,132,000,000 1,279,000,000 1,329,000,000 1,247,000,000 1,318,000,000 1,318,000,000
Total non-current assets 2,301,000,000 2,611,000,000 2,981,000,000 2,865,000,000 3,344,000,000 3,344,000,000
Total assets 6,997,000,000 8,587,000,000 9,931,000,000 10,871,000,000 11,899,000,000 11,899,000,000
Short-term debt 604,000,000 0 0 0 0 0
Total current liabilities 4,357,000,000 4,805,000,000 5,627,000,000 6,533,000,000 7,405,000,000 7,405,000,000
Long-term debt 3,000,000 495,000,000 496,000,000 497,000,000 498,000,000 498,000,000
Total liabilities 4,618,000,000 5,688,000,000 6,741,000,000 7,759,000,000 8,807,000,000 8,807,000,000
Total stockholders’ equity 2,379,000,000 2,899,000,000 3,190,000,000 3,112,000,000 3,092,000,000 3,092,000,000

Facts:

  • Total cash was $3.3 billion in 2018.
  • Current assets was $8.555 billion in 2018.
  • Net property, plant and equipment was $1.3 billion in 2018.
  • Non-current assets were $3.3 billion in 2018.
  • Total assets were $11.899 billion in 2018.
  • Short-term debt was zero from 2015 to 2018.
  • Current liabilities were $7.405 billion in 2018.
  • Long-term debt was $498 million in 2018.
  • Total liabilities were $8.807 billion in 2018.
  • Stockholders equity was $3.092 billion in 2018.

Explanation

  • Total cash increases year-over-year and has grown 82 percent in five years. Moreover, it represents 39 percent of total current assets.
  • Current assets increases year-over-year and has a growth of 82 percent in five years. Further, it represents 72 percent of total assets.
  • Net property, plant and equipment increased by 16 percent in five years. Further, it represents 39 percent of the total non-current assets.
  • Non-current assets grows 45 percent in five years and it represents 28 percent of the total assets in 2018.
  • Total assets increases year-over-year and has grown 70 percent in the last five years.
  • There was zero short-term debt in the last four years.
  • Current liabilities represents 84 percent of the total liabilities in 2018.
  • Long-term debt represents 6 percent of the total liabilities in 2018.
  • Total liabilities represents 74 percent of the total liabilities and stockholders equity in 2018.
  • Equity represents 26 percent of the total liabilities and total equity in 2018.  

Interpretation

The company has a strong balance sheet hence current assets is greater than its current liabilities which means that VWS is capable of paying its current obligations when due time comes.

3. VWS FINANCIAL RATIOS

VWS FINANCIAL RATIOS

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Asset Turnover (avg) 1.13 1.03 0.79 0.98 0.96 1.09 1.08 1.11 0.96 0.89 0.85
Return on Asset  % 9.86 2.31 -2.25 -13.14 -1.30 6.20 8.79 10.42 8.60 6.01 5.02
Return on Equity % 21.77 5.10 -6.23 -45.88 -5.21 20.09 25.96 31.70 28.37 22.05 20.74
Financial Leverage (avg) 1.91 2.57 2.98 4.30 3.70 2.94 2.96 3.11 3.49 3.85 4.37
Return on Invested Capital % 21.23 5.69 -2.23 -27.28 -0.77 16.17 21.59 27.28 24.53 19.15 17.08
Interest Coverage 14.05 3.53 -0.28 -11.08 0.58 15.94 49.68 50.50 80.47 42.36 0.00

Facts:

  • Asset turnover ratio was 0.85 in 2019.
  • Return on assets were 5.02 percent in 2019.
  • Return on equity was 20.74 percent in 2019.
  • Financial leverage was averaging 4.37 in 2019.
  • Return on invested capital was 17.08 percent in 2019.
  • Interest coverage were 42.36 and 0.00 in 2018 and 2019 respectively.

Explanation

  • Asset turnover means that a ratio of 0.85 indicate a dollar of asset generated 85 cents of net sales.
  • Return on assets indicates that every dollar invested in asset it generated 5.02 cents of net income.
  • Return on equity indicates that every dollar of shareholders equity VWS generates 20.74 cents of net income. 
  • Financial leverage means that for every dollar invested in equity the company generated $4.37 in total assets.Further, $3.37 was borrowed. Furthermore, it indicates that VWS starts to get risky.
  • Return on invested capital means that the company is making 17.08 percent over its invested capital. In other terms, for every dollar invested in capital the company generates 0.1708 cents.
  • Interest coverage means that the company has the ability to make interest payments on its debt when due date comes. In other words, the company is making sufficient money from current operations to pay for current interest rates.

Interpretation

Financial ratios shows that the company is operating well its business except in the area of asset turnover which needs a little improvement.

 

4. VWS INCOME AND MARKET

VWS INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Sales 6,910,000,000 8,423,000,000 10,237,000,000 9,953,000,000 10,134,000,000 10,866,000,000
EBIT 558,000,000 859,000,000 1,421,000,000 1,230,000,000 959,000,000 898,000,000
Net Income 392,000,000 685,000,000 965,000,000 894,000,000 684,000,000 640,000,000
Market Capitalization 8,164,000,000 15,513,000,000 14,491,000,000 14,000,000,000 14,872,000,000 14,472,000,000
Intrinsic Value 7,635,146,286 26,442,872,224 15,639,413,893 24,227,525,567 50,141,478,405 15,344,024,990
EBITDA 935,000,000 1,249,000,000 1,718,000,000 1,628,000,000 1,390,000,000 871,000,000

Facts

  • Sales was $10.866 billion in 2019.
  • EBIT was $898 million in 2019.
  • Net income was $640 million in 2019.
  • Market capitalization was $14.472 billion in 2019.
  • Intrinsic value was $15.3 billion in 2019.
  • EBITDA was $871 million in 2019.

Explanation

  • Sales has a growth of 57 percent in five years.
  • EBIT increased by 61 percent in five years and it represents 8 percent of sales.
  • Net income grew 63 percent in five years and it represents 6 percent of sales.
  • Market capitalization increased by 77 percent in the last five years.
  • Intrinsic value was greater by 6 percent against market capitalization.
  • EBITDA decreased 7 percent in five years. It represents 8 percent of sales.

Interpretation

The company had not seen any negative bottomline in the last five years, although it decreases year-over-year from 2017 to 2019 at an average rate of 12 percent. 

 

5. VWS BOARD OF DIRECTORS COMPENSATION

VWS TOTAL BOARD OF DIRECTORS COMPENSATION

TOTAL COMPENSATION (in DKK)

2016 2017 2018
Bert Nordberg 2,100,000 2,200,000 2,143,353
Lard Josefsson 1,800,000 1,800,000 1,832,918
Carsten Bjerg 900,000 900,000 909,427
Eija Pitkanen 700,000 700,000 650,000
Henrik Andersen 500,000 1,100,000 1,100,000
Henry Stenson 700,000 700,000 483,888
Jens Hesselberg Lund 0 0 650,000
Kim Hvid Thomsen 700,000 700,000 650,000
Michael Abildgaard Lisbjerg 400,000 400,000 400,000
Peter Lindhoist 400,000 400,000 400,000
Sussie Dvinge Agerba 400,000 400,000 400,000
Torben Ballegaard 400,000 700,000 650,000

Facts:

  • Bert Nordberg total compensation was DKK 2.1 million in 2018.
  • Lard Josefsson total compensation was DKK 1.8 million in 2018.
  • Carsten Bjerg total compensation was DKK 909 thousand in 2018.
  • Eija Pitkänen total compensation was DKK 650 thousand in 2018.
  • Henrik Andersen total compensation was DKK 1.1 million in 2018.
  • Henry Stenson total compensation was DKK 483,888 in 2018.
  • Jens Hesselberg Lund total compensation was DKK 650,000 in 2018.
  • Kim Hvid Thomsen total compensation was DKK 650,000 in 2018.
  • Michael Abildgaard Lisbjerg total compensation was DKK 400 thousand in 2018.
  • Peter Lindhoist total compensation was DKK 400 thousand in 2018.
  • Sussie Dvinge Agerbo total compensation was DKK 400 thousand in 2018.
  • Torben Ballegaard total compensation was DKK 400 thousand in 2018.

Explanation

  • Bert Nordberg compensation represents 21 percent of the total compensation in 2018.
  • Lard Josefsson compensation represents 18 percent of the total compensation in 2018.
  • Carsten Bjerg compensation represents 9 percent of the total compensation in 2018.
  • Eija Pitkanen compensation represents 6 percent of the total compensation in 2018.
  • Henrik Andersen compensation represents 11 percent of the total compensation in 2018.
  • Jens Hesselberg Lund compensation represents 6 percent of the total compensation in 2018.
  • Kim Hvid Thomsen compensation represents 6 percent of the total compensation in 2018.
  • Michael Abildgaard Lisbjerg compensation represents 4 percent of the total compensation.
  • Peter Lindhoist compensation represents 4 percent of the total compensation in 2018.
  • Sussie Dvinge Agerbo compensation represents 4 percent of the total compensation in 2018.
  • Torben Ballegaard compensation represents 6 percent of the total compensation in 2018.

Interpretation

The total board of directors compensation represents 1.6 percent of the net income in 2018.

 

6. LOBBYING AND CONTRIBUTIONS

VWS LOBBYING AND CONTRIBUTIONS

 

TOTAL LOBBYING EXPENDITURES
Period USD
2008 210,000
2009 150,000
2010 325,000
2011 310,000
2012 480,000
2013 220,000
2014 270,000
2015 270,000
2016 180,000
2017 540,000
2018 390,000
2019 250,000

Facts:

  • Total lobbying expenditures in 2008 was $210 thousand.
  • Total lobbying expenditures in 2009 was $150 thousand.
  • Total lobbying expenditures in 2010 was $325 thousand.
  • Total lobbying expenditures in 2011 was $310 thousand.
  • Total lobbying expenditures in 2012 was $480 thousand.
  • Total lobbying expenditures in 2013 was $220 thousand.
  • Total lobbying expenditures in 2014 was $270 thousand.
  • Total lobbying expenditures in 2015 was $270 thousand.
  • Total lobbying expenditures in 2016 was $180 thousand.
  • Total lobbying expenditures in 2017 was $540 thousand.
  • Total lobbying expenditures in 2018 was $390 thousand.
  • Total lobbying expenditures in 2019 was $250 thousand.

Explanation

The company is spending a yearly lobbying from 2008 to 2019.  A statement from OpenSecret stated that, all lobbying expenses report came from the Senate Office of Public Records. The data for the most recent years was downloaded on September 19, 2019.

 

7. VWS FINANCIAL STRENGTH

VWS FINANCIAL STRENGTH

DATA:

EUR
Working capital 1,150,000,000
Total assets 11,899,000,000
Sales 10,866,000,000
EBIT 959,000,000
Market value of equity 14,472,000,000
Book value of total liabilities 8,807,000,000
Retained earnings 3,042,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.10 1.20 0.12
B – Retained Earnings / Total Assets 0.26 1.40 0.36
C – EBIT / Total Assets 0.08 3.30 0.27
D – Market Value of Equity / Book Value of Total Liabilities 1.64 0.60 0.99
E – Sales / Total Assets 0.91 1.0 0.91
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 compare 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 result of the calculated Z-Score of VWS was 2.64. Dr. Edward Altman indicate that a grading scale of 1.8 to 3 tells us that the company will likely declare bankruptcy in the near future.

There are four main categories in the calculation of Z-Score namely, the profitability or the return on investment, liquidity, leverage and the operating or efficiency.

Hence this calculation relies on different metrics this is a significant measure in determining the financial strength of the company.

CITATION

https://www.vestas.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=F318846

Researched and written by Criselda

 

 

 

 

Costco Wholesale Corp (COST) Extended Graph Analysis

November 12th, 2019 Posted by Extended Analysis No Comment yet

About the Company

costco logo

Costco is a warehouse club with 770 locations worldwide and selling different kinds of merchandise. They have specialty departments and offer exclusive services to members.The company has 245,000 number of employees as of 2018.

Costco was founded in July 12, 1976 at San Diego, California as Price Club and on September 15, 1983 as Costco in Seattle, Washington. The company is headquartered in Issaquah, Washington, United States. The company was founded by James Sinegal in 1983; Jeffrey Brotman in 1983 and Sol Price in 1976. Costco became public in an initial public offering on December 1, 1985.

Costco is serving the United States, Canada, United Kingdom, Australia, Mexico, Japan, China, Taiwan, Spain, France, South Korea and Iceland. Costco Wholesale Corp is under Discount Store Industry and Consumer Defensive Sector. 

Costco Wholesale Corp (COST) Extended Graph Analysis

 

1. COST CASH FLOWS

COST CASH FLOWS

2015 2016 2017 2018 2019 2019 TTM
Net cash provided by operating activities 4,285,000,000 3,292,000,000 6,726,000,000 5,774,000,000 6,356,000,000 6,356,000,000
Net cash used for investing activities -2,480,000,000 2,345,000,000 -2,366,000,000 -2,947,000,000 2,865,000,000 2,865,000,000
Net cash provided (used for) financing activities -2,324,000,000 -2,419,000,000 -3,218,000,000 1,281,000,000 -1,147,000,000 -1,147,000,000
Capital expenditure -2,393,000,000 -2,649,000,000 -2,502,000,000 -2,969,000,000 -2,998,000,000 -2,998,000,000
Free cash flow 1,892,000,000 643,000,000 4,224,000,000 2,805,000,000 3,358,000,000 3,358,000,000

Facts:

  • The net cash provided by operating activities was $6.356 billion in 2019 trailing twelve months.
  • Net cash used for investing activities was $2.865 billion in 2019 trailing twelve months.
  • Net cash provided (used for) financing activities was -$1.147 billion in 2019 trailing twelve months.
  • Capital expenditure was -$2.998 billion in 2019 trailing twelve months.
  • Free cash flow was $3.358 billion in 2019 trailing twelve months.

Explanation:

  • Cash from operating activities had a growth of 48 percent in five years.
  • Cash from investing activities consists of investment in property, plant and equipment and purchases of investments.
  • Net cash provided by financing activities were dividends payments and common stock repurchased.
  • Capital expenditures were investments in property, plant and equipment.
  • Free cash flows was erratic in movement in the last five years, however, it has grown 77 percent in five years.

Interpretation

The company’s cash flow was stable and has never suffered negative in the last five years.

 

2. COST BALANCE SHEET

COST BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 6,419,000,000 4,729,000,000 5,779,000,000 7,259,000,000 9,444,000,000
Total current assets 17,299,000,000 15,218,000,000 17,317,000,000 20,289,000,000 23,485,000,000
Net property, plant and equipment 15,401,000,000 17,043,000,000 18,161,000,000 19,681,000,000 20,890,000,000
Total non-current assets 16,141,000,000 17,945,000,000 19,030,000,000 20,541,000,000 21,915,000,000
Total assets 33,440,000,000 33,163,000,000 36,347,000,000 40,830,000,000 45,400,000,000
Short-term debt 1,283,000,000 1,100,000,000 86,000,000 0 1,699,000,000
Total current liabilities 16,540,000,000 15,575,000,000 17,495,000,000 19,926,000,000 23,237,000,000
Long-term debt 4,864,000,000 4,061,000,000 6,573,000,000 6,487,000,000 5,124,000,000
Total liabilities 22,823,000,000 21,084,000,000 25,569,000,000 28,031,000,000 30,157,000,000
Total stockholders’ equity 10,617,000,000 12,079,000,000 10,778,000,000 12,799,000,000 15,243,000,000

Facts:

  • The total cash was $9.444 billion in 2019.
  • Current assets were $23.485 billion in 2019.
  • Net property, plant and equipment was $20.890 billion in 2019.
  • Non-current assets were $21.915 billion in 2019.
  • Total assets were $45.400 billion in 2019.
  • The short-term debt was $1.699 billion in 2019.
  • Current liabilities were $23.237 billion in 2019.
  • Long-term debt was $5.124 billion in 2019.
  • Total liabilities were $30.157 billion in 2019.
  • Stockholders equity was $15.243 billion in 2019.

Explanation:

  • Total cash represents 40 percent of total current assets.
  • Current assets represents 52 percent of total assets.
  • Net property, plant and equipment represents 95 percent of non-current assets.
  • Non-current assets represents 48 percent of total assets.
  • Total assets had a growth of 36 percent in five years.
  • Short-term debt represents 7 percent of current liabilities.
  • Current liabilities represents 77 percent of total liabilities.
  • Long-term debt represents 17 percent of the total liabilities.
  • Total liabilities represents 66 percent of the total liabilities and equity.
  • Total stockholders equity represents 34 percent of the total liabilities and equity.

Interpretation

Total cash and total assets is increasing year-over-year in the last five years. Its total cash represents 20 percent of the total assets which is good and it shows that the management is efficient in producing liquid resources for the business operation. Its financial health shows that the company has enough cash to pay for its current obligations.

 

3. COST FINANCIAL RATIOS

COST FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Asset Turnover (avg) 3.50 3.56 3.71 3.67 3.54 3.54
Return on Asset (ROA) % 7.15 7.06 7.71 8.12 8.49 8.49
Return on Equity (ROE) % 20.74 20.71 23.44 26.59 26.10 26.10
Financial Leverage (avg) 3.15 2.75 3.37 3.19 2.98 2.98
Return on Invested Capital % 13.69 14.18 15.78 17.44 17.09 17.09
Interest Coverage 30.06 28.21 31.14 28.94 32.77 32.77

Facts:

  • Asset turnover was averaging 3.54 in 2019 and the trailing twelve months.
  • Return on assets was 8.49 percent in 2019 and the trailing twelve months.
  • Return on equity was 26.10 percent in 2018 and the trailing twelve months.
  • Financial leverage was averaging 2.98 in 2019 and the trailing twelve months.
  • The return on invested capital was 17.09 percent in 2019 and the trailing twelve months.
  • Interest coverage was 32.77 in 2019 and the trailing twelve months.

Explanation:

  • Asset turnover indicate that for every dollar invested in assets the company generate an average of $3.54 sales.
  • Return on assets indicates that the company generates 8.49 cents of net income for every dollar invested in assets.
  • Return on equity indicates that for every dollar invested in equity it generates 26 cents of net income.
  • Financial leverage means that for every dollar in equity, COST had $2.98 in total assets, it borrowed the other $1.98. The ratio is fairly conservative.
  • Return on invested capital means that the company makes a 17.09 percent return over the invested capital. In other terms, the company makes a $0.17 return for every $1 over the invested capital.
  • Interest coverage indicates that the company is making more than enough cash to pay for its current interest obligations on its debt and extra cash left over to pay for the principal. In other words, the company is making 32.77 times more earnings than current interest payments.

Interpretation

Financial ratio analysis indicates that the company has a good financial performance in the last five years.

 

4. COST INCOME AND MARKET

COST FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Sales 116,199,000,000 118,719,000,000 129,025,000,000 141,576,000,000 152,703,000,000 152,703,000,000
EBIT 3,624,000,000 3,672,000,000 4,111,000,000 4,480,000,000 4,737,000,000 4,737,000,000
Net Income 2,377,000,000 2,350,000,000 2,679,000,000 3,134,000,000 3,659,000,000 3,659,000,000
EBITDA 4,855,000,000 5,007,000,000 5,543,000,000 6,038,000,000 6,407,000,000 6,407,000,000
Market Capitalization 71,024,000,000 70,327,000,000 81,726,000,000 89,732,000,000 94,542,000,000 130,499,000,000
Intrinsic Value 143,216,880,173 141,158,371,538 134,670,225,036 156,583,026,744 129,618,081,523 244,423,517,581

Facts:

  • Total sales were $152.7 billion in 2019 and the trailing twelve months.
  • EBIT was $4.737 billion in 2019 and the trailing twelve months.
  • Net income was $3.659 billion in 2019 and the trailing twelve months.
  • EBITDA was $6.407 billion in 2019 and the trailing twelve months.
  • Market capitalization was $130.499 billion in the trailing twelve months.
  • Intrinsic value was $244 billion in the trailing twelve months.

Explanation:

  • Sales increases year-over-year at an average rate of 6 percent.
  • Sales has a growth of 31 percent in five years.
  • EBIT has a growth of 31 percent in five years.
  • EBIT represents 3 percent of sales.
  • Net income increases year-over-year at an average of 9 percent.
  • Net income has a growth of 54 percent in five years.
  • Net income represents 2.4 percent of sales.
  • EBITDA has a growth of 32 percent in five years.
  • EBITDA represents 4 percent of sales.
  • Market capitalization increases 84 percent from 2015 to current date.
  • Intrinsic value increases 71 percent from 2015 to current date.
  • Intrinsic value is greater by 87 percent against market value.

Interpretation

Income and market are trending up from 2015 to current date. It shows that the company is profitable. Moreover, it indicates that the stock value of COST is undervalued.

 

5. COST EXECUTIVE COMPENSATION

COST KEY EXECUTIVE COMPENSATION

2014 2015 2016 2017 2018
Key Executive Compensation 12,287,863 17,319,745 21,561,342 21,924,799 23,803,010
W. Craig Jelinek/ President and CEO 5,624,658 6,340,393 6,503,276 6,620,969 7,408,513
Richard A. Galanti/ EVP and CFO 3,352,768 3,745,757 3,905,567 3,988,712 4,286,893
Joseph P. Portera/ EVP and COO, Eastern and Canadian Division 3,310,437 3,645,509 3,770,037 3,828,591 4,100,211
Paul G. Moulton/ EVP and Chief Information Officer 0 3,588,086 3,728,424 3,773,349 4,022,591
James Murphy/ EVP and COO, International Division 0 0 3,654,038 3,713,178 3,984,802

Facts:

  • Total key executive compensation was $23.8 million in 2018.
  • W. Craig Jelinek total compensation was $7.4 million in 2018.
  • Richard A. Galanti total compensation was $4.287 million in 2018.
  • Joseph P. Portera total compensation was $4.1 million in 2018
  • Paul G. Moulton total compensation was $4.0 million in 2018.
  • James Murphy’s total compensation was $3.984 million in 2018.

Explanation:

  • Total key executive compensation represents 0.76 percent of the net income in 2018.
  • W. Craig Jelinek total compensation was 31 percent of the total key executive compensation.
  • Richard A. Galanti total compensation in 2018 represents 18 percent of the total key executive compensation.
  • Joseph P. Portera total compensation represents 17 percent of the total key executive compensation in 2018.
  • Paul G. Moulton total compensation in 2018 represents 17 percent of the total key executive compensation.
  • James Murphy’s total compensation in 2018 represents 17 percent of the total key executive compensation.

Interpretation

The disclosed above key executives compensation are the most highly compensated executive officers during the year.

 

5.a COST KEY EXECUTIVE COMPENSATION CATEGORIZED

COST KEY EXECUTIVE COMPENSATION CATEGORIZED

2014 2015 2016 2017 2018
Key Executive Compensation
Salary 1,965,098 2,651,553 3,299,136 3,445,096 3,540,000
Bonus 182,607 516,979 290,759 506,650 387,660
Annual Other Income 0 0 0 0 0
Restricted Stock Award 9,805,560 13,706,282 17,210,130 17,128,727 18,897,605
Securities Option 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-equity compensation 0 0 0 0 0
Other compensation 302,733 401,075 539,461 554,188 574,825
Total 12,287,863 17,319,745 21,561,342 21,924,799 23,803,010

Facts:

  • The key executive compensation classified into the following:
    • Salary $3.540 million
    • Bonus $388 thousand
    • Restricted stock award $18.9 million
    • Other compensation $575 thousand

Explanation:

  • Basic salary represents 15 percent of the total key executive compensation.
  • Bonus represents 2 percent of the total key executive compensation.
  • Restricted stock award represents 79 percent of the total key executive compensation.
  • Other compensation is 2 percent of the total key executive compensation.

 

6. COST LOBBYING AND CONTRIBUTIONS

COST LOBBYING AND CONTRIBUTIONS - 2019

2019 USD
Lobbying 210,000
Contributions 104,168
Total 314,168

Facts:

  • Lobbying in 2019 was $210 thousand.
  • Contributions in 2019 was $104.2 thousand.
  • Total lobbying and contributions in 2019 was $314 thousand.

Explanation:

  • Lobbying represents 67 percent of the total lobbying and contributions in 2019.
  • Contributions represents 33 percent of the total lobbying and contributions in 2019.

COST TOTAL CONTRIBUTIONS BY PARTY RECIPIENT

Democrats Republicans Total
1990 1,100 1,000 2,100
1992 6,800 12,950 19,750
1994 123,700 4,300 128,000
1996 42,600 5,600 48,200
1998 81,800 1,000 82,800
2000 192,500 9,300 201,800
2002 71,500 2,500 74,000
2004 276,503 5,500 472,003
2006 184,300 6,000 207,070
2008 314,900 8,300 325,420
2010 126,000 20,200 146,200
2012 404,000 22,900 551,998
2014 117,200 1,700 143,800
2016 524,120 19,100 545,544
2018 297,300 30,600 340,346
2020 90,161 7,200 104,168
TOTAL 2,854,484 158,150 3,012,634

Facts:

  • The total lobbying and contributions for Democrats and Republicans were:
    • 1990 $2,100
    • 1992 $19,750
    • 1994 $128,000
    • 1996 $48,200
    • 1998 $82,800
    • 2000 $201,800
    • 2002 $74,000
    • 2004 $472,003
    • 2006 $207,070
    • 2008 $325,420
    • 2010 $146,200
    • 2012 $551,998
    • 2014 $143,800
    • 2016 $545,544
    • 2018 $340,346
    • 2020 $104,168

Explanation:

Costco is spending lobbying and contributions since 1990 and onwards to the present date as seen above. The Federal Election Commission released the data for the current election cycle on October 16, 2019.

TOTAL CONTRIBUTIONS BY SOURCE OF FUNDS

COST TOTAL CONTRIBUTIONS BY SOURCE OF FUNDS

Period Individuals Soft Indivs
1990 104,168
1992 318,821 11,025
1994 543,194 2,100
1996 118,800 25,000
1998 426,836 125,000
2000 146,195 0
2002 323,420 0
2004 207,070 0
2006 282,003 0
2008 69,000 5,000
2010 201,450 250
2012 74,750 8,000
2014 48,181 0
2016 27,975 100,000
2018 19,700 0
2020 2,100 0
Totals 2,913,663 276,375

Facts:

  • The total contributions by source of funds was:
    • Individuals $2,913,663
    • Soft Indivs   $276,375
    • Overall total $3,190,038

Explanation:

The election cycles shown above in the table actually represent two-year period, example in 2014 election cycle runs from January 1, 2013 to December 31, 2014. 

 

7. COST FINANCIAL STRENGTH

COST FINANCIAL STRENGTH

DATA:

Working capital 248,000,000
Total assets 45,400,000,000
Sales 152,703,000,000
EBIT 4,737,000,000
Market value of equity 134,188,000,000
Book value of total liabilities 30,157,000,000
Retained earnings 10,258,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.01 1.20 0.01
B – Retained Earnings / Total Assets 0.23 1.40 0.32
C – EBIT / Total Assets 0.10 3.30 0.34
D – Market Value of Equity / Book Value of Total Liabilities 4.45 0.60 2.67
E – Sales / Total Assets 3.36 1.0 3.36
Z-Score 6.70


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

 

Explanation

Z-Score is a statistical measurement that compare 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 Costco was 6.70. In Dr. Edward Altman grading scale of 3.0 plus indicates that the company will not declare bankruptcy. The company is far from bankruptcy and investors should not be worried about buying the stocks. It means that the company is financially healthy.

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

 

CITATION

https://www.costco.com/

https://www.sec.gov/cgi-bin/browse-edgar?CIK=COST&owner=exclude&action=getcompany&Find=Search

https://www.opensecrets.org/orgs/summary.php?id=D000000703
Researched and written by Criselda 

Twitter: criseldarome

 

Ayala Land Inc (ALI) Extended Graph Analysis

November 4th, 2019 Posted by Extended Analysis No Comment yet

About the Company

ayalaland

Ayala Land Inc (ALI) is a real estate company that is based in the Philippines. ALI was organized in 1988 as an independent subsidiary of Ayala Corporation. The company started its initial public offering in July 1991 in which its Class B common shares were listed in Manila and Makati Stock Exchanges. The Securities and Exchange Commission approved the declassification of the company’s Common Class A and Common Class B shares into common shares on September 12, 1997.

The company is servicing residential developments, shopping centers, hotels and resorts, offices, construction, property management and strategic investment. 

 

Ayala Land Inc (ALI) Extended Graph Analysis

 

1. ALI CASH FLOWS

ALI CASH FLOWS

2014 2015 2016 2017 2018 2019
Operating Cash Flow 36,010,000,000 20,182,000,000 33,040,000,000 25,700,000,000 11,768,000,000 -15,886,000,000
Net cash used for investing activities -5,151,000,000 -4,889,000,000 -5,781,000,000 -3,537,000,000 -298,000,000 1,262,000,000
Net cash provided by (used for) financing activities 1,621,000,000 1,912,000,000 2,658,000,000 980,000,000 -626,000,000 524,000,000
Capital expenditure -3,251,000,000 -6,839,000,000 -3,722,000,000 -2,326,000,000 -2,843,000,000 -3,220,000,000
Free cash flow 32,759,000,000 13,342,000,000 29,318,000,000 23,374,000,000 8,925,000,000 -19,105,870,000
Working Capital 30,188,000,000 20,071,000,000 22,809,000,000 33,938,000,000 62,045,000,000 62,045,000,000

Facts:

  • Operating cash flow was -PhP15.886 billion in 2019 trailing twelve months.
  • Net cash used for investing activities was PhP1.262 billion in 2019 trailing twelve months.
  • Net cash provided by (used for) financing activities was PhP524 million in 2019 trailing twelve months.
  • Capital expenditure was -PhP3.220 billion in 2019 trailing twelve months.
  • Free cash flow was -PhP19.106 billion in 2019 trailing twelve months.
  • Working capital was PhP 62.045 billion in 2019 trailing twelve months.

Explanation:

  • Operating cash flow was negative due to other working capital which is accounts and notes receivable trade in significant amount.
  • Net cash provided by investing activities were investment in property, plant and equipment and purchases of investments.
  • Net cash provided by (used for) financing activities were debt issued and repayment, dividends paid.
  • Capital expenditure was investment in property, plant and equipment.
  • Free cash flows were erratic in movement in the last five years and it has a negative FCF due to negative operating cash flows in 2019 trailing twelve months.
  • Working capital has a growth of 106 percent in five years, although the movement was erratic.

Interpretation

The company has a positive cash flows except in 2019 trailing twelve months were it suffered negative due to changes in working capital which affected the free cash flow.

 

2. ALI BALANCE SHEET

ALI BALANCE SHEET

2014 2015 2016 2017 2018 2019
Cash and cash equivalent 28,677,282,000 19,087,390,000 20,904,330,000 20,998,089,000 23,996,570,000 23,996,570,000
Total current assets 165,630,000,000 166,200,000,000 211,010,000,000 218,560,000,000 302,830,000,000 302,830,000,000
Total non-current assets 223,310,000,000 276,140,000,000 325,420,000,000 355,430,000,000 365,990,000,000 365,990,000,000
Total assets 388,944,463,000 442,341,800,000 536,432,995,000 573,992,334,000 668,820,482,000 668,820,482,000
Short-term debt 21,369,215,000 19,293,910,000 29,431,461,000 24,217,125,000 37,651,890,000 37,651,890,000
Total current liabilities 135,450,000,000 146,132,855,000 188,203,171,000 184,623,237,000 240,784,527,000 240,784,527,000
Long-term debt 103,296,454,000 111,702,201,000 130,369,877,000 150,168,631,000 149,446,949,000 149,446,949,000
Total liabilities 266,949,005,000 292,516,389,000 363,749,808,000 381,728,976,000 448,599,285,000 448,599,285,000
Retained Earnings 66,478,250,000 77,951,761,000 91,798,555,000 109,976,450,000 132,090,020,000 132,090,020,000
Total stockholders’ equity 121,995,458,000 149,825,411,000 172,683,187,000 192,263,358,000 220,221,197,000 220,221,197,000

Facts:

  • Cash and cash equivalent was PhP23.997 billion in 2018, 2019 trailing twelve months.
  • Current assets were PhP 303.830 billion in 2018, 2019 trailing twelve months.
  • Non-current assets were PhP365.990 billion in 2018, 2019 trailing twelve months.
  • Total assets were PhP668.820 billion in 2018, 2019 trailing twelve months.
  • Short-term debt was PhP 37.652 billion in 2018, 2019 trailing twelve months.
  • Current liabilities were PhP240.785 billion in 2018, 2019 trailing twelve months.
  • Long-term debt was PhP149.447 billion in 2018, 2019 trailing twelve months.
  • Total liabilities were PhP448.599 billion in 2018, 2019 trailing twelve months.
  • Retained earnings were PhP132.090 billion in 2018, 2019 trailing twelve months.
  • Total stockholders equity was PhP 220.221 billion in 2018, 2019 trailing twelve months.

Explanation:

  • Current assets has grown 83 percent in five years.
  • Non-current assets has grown  64 percent in five years.
  • Total assets has a growth of 72 percent in five years.
  • Short-term debt represents 8 percent of the total liabilities.
  • Current liabilities represents 50.01 percent of the total liabilities.
  • Non-current liabilities represents 49.99 percent of the total liabilities.
  • Long-term debt represents 31 percent of the total liabilities.
  • Total liabilities represents 72 percent of the total liabilities and equity.
  • Retained earnings grows 99 percent in five years.
  • Retained earnings represents 60 percent of the total equity.
  • Stockholders equity represents 33 percent of the total liabilities and equity.
  • Equity has a growth of 81 percent in five years.

Interpretation

The company’s total assets and equity were increasing year-over-year in the last five years. Moreover, the retained earnings were increasing too year-over-year at an average rate of 15 percent. 

 

3.  ALI FINANCIAL RATIOS

ALI FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset Turnover (avg) 0.25 0.24 0.24 0.25 0.26 0.26
Return on Asset (ROA) % 4.14 4.24 4.27 4.55 4.70 4.78
Return on Equity (ROE) % 14.51 14.65 14.86 16.12 16.61 16.97
Financial Leverage (avg) 3.64 3.31 3.63 3.47 3.60 3.50
Return on Invested Capital % 7.00 7.18 7.63 9.44 9.84 9.59
Interest Coverage 5.59 5.45 5.70 5.91 6.06 5.83
Net Margin % 16.63 17.51 17.76 18.22 17.90 18.58
Earnings per Share PhP 1.05 1.20 1.43 1.71 1.98 2.08
Dividends PhP 0.41 0.41 0.47 0.48 0.50 0.51

Facts:

  • Asset turnover was averaging 0.26 in 2019 trailing twelve months.
  • Return on assets was 4.78 percent in 2019 trailing twelve months.
  • Return on equity was 16.97 percent in 2019 trailing twelve months.
  • Financial leverage was averaging 3.50 in 2019 trailing twelve months.
  • Return on invested capital was 9.59 percent in 2019 trailing twelve months.
  • Interest coverage was 5.83 in 2019 trailing twelve months.
  • Net margin was 18.58 percent in 2019 trailing twelve months.
  • Earnings per share was PhP2.08 in 2019 trailing twelve months.
  • Dividends was PhP0.51 in 2019 trailing twelve months.

Explanation:

  • Asset turnover indicates that for every Peso in asset, the company generates only 26 centavos of sales, which is not very efficient.
  • Return on assets indicates that every Peso invested in asset, it generates PhP 0.47 of net income.
  • Return on equity indicates that for every Peso invested in equity, it generates PhP 0.16 centavos in profit.
  • Financial leverage indicates that for every Peso in equity, the company had 3.50 pesos in total assets. In other terms, the other 2 pesos and 50 centavos was borrowed. The ratio of 4 or more tells us that the company starts to be at risk.
  • Return on invested capital tells us that for every Php 1 invested in capital the company yielded a PhP 0.096 return.
  • Interest coverage indicates that the company is earning enough for payment of its  current interest and some extra earnings left to pay for principal.
  • Net margin was averaging 17.77 percent of sales in the last five years. This is the percent of income produced after deducting all expenses including interest and taxes from sales.
  • Earnings per share means that each shareholder will receive PhP 2.08 for each share of stock if the company distributed income..
  • The company’s dividends was stable in the last five years at average 0.46. 
  • The dividend declared in 2019 trailing twelve months was PhP 0.51, meaning each shareholder will receive the same amount for each share invested in the company’s equity as their reward.

Interpretation

The company has a good financial ratios except for asset turnover which is not very efficient. Moreover, financial leverage tells us that the company can be at risk. The management has maintained a record of making regular dividend payments to its shareholders. 

 

4. ALI INCOME AND MARKET

ALI INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 89,027,534,000 100,660,792,000 117,700,488,000 138,507,775,000 162,996,894,000 165,752,894,000
Operating Income 24,048,387,000 29,214,954,000 34,245,707,000 43,714,104,000 53,070,919,000 55,178,919,000
Net Income 14,802,642,000 17,630,275,000 20,908,011,000 25,304,965,000 29,240,880,000 30,859,709,000
EBITDA 34,042,375,000 39,052,117,000 45,490,190,000 50,900,886,000 60,447,416,000 64,033,416,000
Market Capitalization 478,219,000,000 506,265,000,000 470,806,000,000 656,733,000,000 598,236,000,000 728,644,000,000
Intrinsic Value 782,224,821,480 788,087,616,944 669,674,546,995 1,194,071,123,075 1,195,333,380,218 1,436,283,382,660

Facts:

  • Revenue was PhP 165.753 billion in 2019 trailing twelve months.
  • Operating income was PhP 55.179 billion in 2019 trailing twelve months.
  • Net income was PhP 30.860 billion in 2019 trailing twelve months.
  • EBITDA was PhP 64.033 in 2019 trailing twelve months.
  • Market capitalization was Php 728.644 billion in 2019 trailing twelve months.
  • The calculated intrinsic value was Php 1.436 trillion in 2019 trailing twelve months.

Explanation:

  • Revenue has a five year growth of 86 percent. 
  • Revenue increases year-over-year at an average rate of 13 percent.
  • Operating income has a five year growth of 129 percent.
  • Net income has a five year growth of 108 percent.
  • Net income represents 19 percent of the revenue.
  • EBITDA has a five year growth of 88 percent.
  • EBITDA represents 39 percent of revenue.
  • The market capitalization growth was 52 percent in five years.
  • Intrinsic value has five year growth of 84 percent. 
  • Intrinsic value was greater by 97 percent of the market value.

Interpretation

The company has not suffered any losses in the last five years in its bottomline.

 

5. ALI BOARD OF DIRECTORS TOTAL COMPENSATION

ALI BOARD OF DIRECTORS TOTAL COMPENSATION

BOARD OF DIRECTORS TOTAL COMPENSATION IN 2018

Position 2018 (PHP)
Fernando Zobel de Ayala Chairman 3,200,000
Jaime Augusto Zobel de Ayala Vice Chairman 2,600,000
Jaime C. Laya Lead ID 3,100,000
Rizalina G. Mantaring ID 3,300,000
Cesar V. Purisima ID 2,300,000
Ma. Angela E. Ignacio NED 600,000
Antonio T. Aquino NED 3,600,000
Arturo G. Corpuz NED 2,500,000
Delfin L. Lazaro NED 2,800,000
Total 24,000,000

Facts:

  • Total Director’s salary in 2018 was PhP 24 million.
  • Fernando Zobel de Ayala, Chairman’s total compensation in 2018 was PhP 3.2 million.
  • Jaime Augusto Zobel de Ayala, Vice Chairman total compensation in 2018 was PhP 2.6 million.
  • Jaime C. Laya, Lead ID total compensation in 2018 was PhP 3.1 million.
  • Rizalina G. Mantaring, ID toptal compensation in 2018 was PhP 3.3 million.
  • Cesar V. Purisima, ID total compensation in 2018 was PhP 2.3 million.
  • Ma. Angela E. Ignacio, NED total compensation in 2018 was PhP 600,000.
  • Antonio T. Aquino, NED total compensation in 2018 was PhP 3.6 million.
  • Arturo G. Corpuz, NED total compensation in 2018 was Php 2.5 million.
  • Delfin L. Lazaro, NED total compensation in 2018 was PhP 2.8 million.

Explanation:

  • The total directors compensation in 2018 represents 0.08 percent of net income.
  • Fernando Zobel de Ayala total compensation represents 13.33 percent of the total directors salary in 2018.
  • Jaime Augusto Zobel de Ayala total compensation in 2018 represents 10.83 percent of the total directors salary.
  • Jaime C. Laya total compensation in 2018 represents 12.92 percent of the total directors salary.
  • Rizalina G. Mantaring total compensation in 2018 represents 13.75 percent of the total directors salary.
  • Cesar V. Purisima total compensation in 2018 represents 9.58 percent of the total directors salary.
  • Ma. Angela E. Ignacio total compensation in 2018 represents 2.50 percent of the total directors salary.
  • Antonio T. Aquino total compensation in 2018 represents 15 percent of the total directors salary.
  • Arturo G. Corpuz total compensation in 2018 represents 10.42 percent of the total directors salary.
  • Delfin L. Lazaro total compensation in 2018 represents 11.67 percent of the total directors salary.

Interpretation

The total director compensation was less than one percent of the total net income for the period.

 

5.a EXECUTIVE COMPENSATION

ALI CEO AND PRESIDENT TOTAL COMPENSATION

2017 2018 2019
CEO and President, Bernard Vincent O Dy
Basic salary 112,300,000 122,950,000 131,560,000
Other variable pay 93,100,000 112,300,000 112,300,000
Total 205,400,000 235,250,000 243,860,000
CFO and Treasurer, Augusto D. Bengzon

Facts:

  • Bernard Vincent O. Dy, CEO and President total executive compensation was:
  • 2019 PhP 243,860,000
    • Basic salary PhP 112,300,000
    • Other pay PhP 112,300,000
  • Augusto D. Bengzon, CFO and Treasurer total executive compensation was not available in the record.

Explanation:

The total compensation of the CEO in 2018 represents 0.79 percent of the net income.

 

6. ALI LOBBYING AND CONTRIBUTIONS

There was no lobbying and contributions in record found in Ayala Land Inc (ALI) for the year 2018 and the previous years.

 

7. ALI FINANCIAL STRENGTH

ALI FINANCIAL STRENGTH

DATA: (In PhP)

Working capital 62,045,000,000
Total assets 668,820,482,000
Sales 165,752,894,000
EBIT 55,178,919,000
Market value of equity 728,644,000,000
Book value of total liabilities 481,520,630,000
Retained earnings 132,090,020,000


CALCULATION:

Ratio Score Result
A – Working Capital / Total Assets 0.09 1.20 0.11
B – Retained Earnings / Total Assets 0.20 1.40 0.28
C – EBIT / Total Assets 0.08 3.30 0.27
D – Market Value of Equity / Book Value of Total Liabilities 1.51 0.60 0.91
E – Sales / Total Assets 0.25 1.0 0.25
Z-Score 1.82

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

Explanation

Z-Score is a statistical measurement that compare 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 for Ayala Land Inc was 1.82. According to Dr. Edward Altman a grading scale of 1.8 to 3 indicates that the company will likely declare bankruptcy or be insolvent in the near future. In other terms, the company might have difficulty in finances in the near future if its operating cash flows continue to fall. It indicates that the company is a higher risk investment.

The reason in low score is most likely that the operating cash flow of the company dive deeply in 2019 trailing twelve months at a rate of 235 percent from 2018 which resulted in a negative operating cash flow. Moreover, the free cash flow had decreased by 314 percent from 2018, which also resulted in a negative FCF. 

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

CITATION

https://ir.ayalaland.com.ph/wp-content/uploads/2019/03/ALI-FY-2018-Audited-Financial-Statements-2019-03-01.pdf

https://ir.ayalaland.com.ph/corporate-governance/board-processes/

 

Researched and written by Criselda

 

Note:

Research Reports can be found under the company tab.