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Amazon.com Inc (AMZN) Extended Graph Analysis

September 2nd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

Amazon logo

Amazon.com Inc (AMZN) is a powerful and influential American company engaged in retailer online shopping services based in Seattle, Washington  AMZN was founded by Jeff Bezos on July 5, 1994. It began service as an online bookstore, then became a giant company when it comes to e-commerce, media, logistics, payments, hardware and data storage. The company went public in October 1995. AMZN has three business segments, namely: North America, International and Amazon Web Services (AWS).  

Amazon.com Inc (AMZN) Extended Graph Analysis

 

1. AMZN CASH FLOW

AMZN CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 11,920,000,000 16,443,000,000 18,434,000,000 30,723,000,000 38,514,000,000 51,220,000,000
Net cash used for investing activities -6,450,000,000 -9,876,000,000 -27,819,000,000 -12,369,000,000 -24,281,000,000 -35,307,000,000
Net cash provided by (used for) financing activities -3,763,000,000 -2,911,000,000 9,860,000,000 -7,686,000,000 -10,066,000,000 -714,000,000
Capital expenditure -4,589,000,000 -6,737,000,000 -11,955,000,000 -13,427,000,000 -16,861,000,000 -24,263,000,000
Free cash flow 7,331,000,000 9,706,000,000 6,479,000,000 17,296,000,000 21,653,000,000 26,957,000,000
Working Capital 2,575,000,000 1,965,000,000 2,314,000,000 6,710,000,000 8,522,000,000 8,522,000,000

Facts:

  • Cash flow provided by operating expenses was $51 billion in the trailing twelve months.
  • Net cash used for investing activities were -$35 billion in the trailing twelve months.
  • Cash provided by (used for) financing activities were -$714 million in the trailing twelve months.
  • Capital expenditures were -$24 billion in the trailing twelve months.
  • Free cash flow was $27 billion in the trailing twelve months.
  • Working capital was $8.5 billion in the trailing twelve months.

Explanation

  • Cash from operations increased year-over-year at an average rate of 35 percent and grew 330 percent in five years.
  • Cash used for investing activities was investment in property, plant and equipment, acquisitions and purchases of investments.
  • Net cash provided by (used for) financing activities was debt issued and repayments.
  • Capital expenditures were investment in property, plant and equipment.
  • Free cash flow grew 268 percent in five years.
  • Working capital increased year-over-year and it grew 231 percent in five years.

Interpretation

The management is efficient in generating cash year-over-year for its business operations. The company is financially liquid.

 

2. AMZN BALANCE SHEET

AMZN BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 19,808,000,000 25,981,000,000 30,986,000,000 41,250,000,000 55,021,000,000
Current Assets 36,474,000,000 45,781,000,000 60,197,000,000 75,101,000,000 96,334,000,000
Net property, plant and equipment 21,838,000,000 29,114,000,000 48,866,000,000 61,797,000,000 97,846,000,000
Total non-current assets 28,970,000,000 37,621,000,000 71,113,000,000 87,547,000,000 128,914,000,000
Total assets 65,444,000,000 83,402,000,000 131,310,000,000 162,648,000,000 225,248,000,000
Current liabilities 33,899,000,000 43,816,000,000 57,883,000,000 68,391,000,000 87,812,000,000
Non-current liabilities 18,161,000,000 20,301,000,000 45,718,000,000 50,708,000,000 75,376,000,000
Total liabilities 52,060,000,000 64,117,000,000 103,601,000,000 119,099,000,000 163,168,000,000
Retained earnings 2,545,000,000 4,916,000,000 8,636,000,000 19,625,000,000 31,220,000,000
Stockholders equity 13,384,000,000 19,285,000,000 27,709,000,000 43,549,000,000 62,060,000,000

Facts:

  • Total cash was $55 billion in 2019.
  • Current assets were $96 billion in 2019.
  • Net property, plant and equipment was $98 billion in 2019.
  • Total non-current assets were $129 billion in 2019.
  • Total assets were $225 billion in 2019.
  • Current liabilities were $88 billion in 2019.
  • Non-current liabilities were $75 billion in 2019.
  • Total liabilities were $163 billion in 2019.
  • Retained earnings were $31 billion in 2019.
  • Stockholders equity was $62 billion in 2019.

Explanation

  • Total cash increased year-over-year and grew 178 percent in five years. 
  • Total cash represents 24 percent of total assets.
  • Current assets increased year-over-year and grew 164 percent in five years.
  • Current assets represent 43 percent of total assets.
  • Net property, plant and equipment increased year-over-year and it grew 348 percent in five years.
  • New property, plant and equipment represent 43 percent of the total assets.
  • Total non-current assets increased YOY and had a growth of 345 percent in five years. 
  • Non-current assets represent 57 percent of total assets.
  • Total assets increased year-over-year and grew 244 percent in five years.
  • Current liabilities represent 54 percent of total liabilities.
  • Non-current liabilities represent 46 percent of total liabilities.
  • Total liabilities represent 72 percent of total liabilities and stockholders equity.
  • Retained earnings represent 50 percent of the total equity.
  • Stockholders equity represents 28 percent of total liabilities and equity.

Interpretation

The company has a sound balance sheet and is liquid. Moreover, the creditors have two-thirds stake in the company and the investors have one-third stake of the company’s asset. The management is using leverage efficiently to earn profit.

 

3. AMZN INCOME AND MARKET

AMZN INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 107,006,000,000 135,987,000,000 177,866,000,000 232,887,000,000 280,522,000,000 321,782,000,000
EBIT 2,233,000,000 4,186,000,000 4,106,000,000 12,421,000,000 14,541,000,000 16,869,000,000
Net Income 596,000,000 2,371,000,000 3,033,000,000 10,073,000,000 11,588,000,000 13,180,000,000
EBITDA 8,308,000,000 12,492,000,000 16,132,000,000 28,019,000,000 37,365,000,000 40,788,000,000
Market Capitalization 318,344,000,000 356,313,000,000 563,535,000,000 737,000,000,000 920,000,000,000 1,585,000,000,000
Intrinsic Value 250,672,000,000 300,000,000,000 399,000,000,000 267,000,000,000 209,000,000,000 311,000,000,000

Facts:

  • Revenue was $322 billion in the trailing twelve months.
  • EBIT was $17 billion in the trailing twelve months.
  • Net income was $13 billion in the trailing twelve months.
  • EBITDA was $41 billion in the trailing twelve months.
  • Market capitalization was $1.6 trillion.
  • Intrinsic value was $311 billion.

Explanation

  • Revenue increased year-over-year and escalated 201 percent in five years, in other words, it has a strong revenue growth..
  • Revenue increased 20 and 15 percent in 2018 to 2019 and from 2019 to the trailing twelve months, respectively.
  • EBIT increases year-over-year and has a growth rate of 655 percent in five years.
  • EBIT represents 5 percent of the revenue.
  • Net income increased year-over-year and it grew 2111 percent in five years.
  • Net income represents 4 percent of the revenue, the gross revenue represents 76 percent of the revenue.
  • EBITDA increased year-over-year and it grew 391 percent in five years 
  • Market capitalization was higher than the intrinsic value of AMZN.
  • Intrinsic value was lower by 410 percent than the market value.

Interpretation

The company has a strong financial statement and is profitable. Bottom line escalated over 2,000 percent in five years.

 

4. AMZN FINANCIAL RATIOS

AMZN FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 1.78 1.83 1.66 1.58 1.45 1.43
Return on assets % 0.99 3.19 2.83 6.85 5.97 5.86
Return on equity % 4.94 14.52 12.91 28.27 21.95 20.75
Return on invested capital % 3.31 8.42 7.09 14.7 11.72 10.65
Debt/Equity 1.06 0.79 1.37 0.91 1.02 1.03

Facts:

  • Asset turnover was averaging 1.43 ratio in the trailing twelve months.
  • Return on assets was 5.86 percent in the trailing twelve months.
  • Return on equity was 20.75 percent in the trailing twelve months.
  • Return on invested capital was 10.65 percent in the trailing twelve months.
  • Debt/Equity was 1.03 ratio in the trailing twelve months.

Explanation

  • Asset turnover indicates that for every dollar invested in assets, the company generates 1.43 cents  of sales.
  • Return on assets indicate that the company generates 5.86 cents of net income for every dollar invested in assets.
  • Return on equity indicates that the company generated profit of 20.7 cents per share invested in equity.
  • Return on invested capital indicates that the company generated a return of 10.65 percent on its capital base.
  • Debt/Equity ratio indicates that for every dollar in equity the company uses $1.03 in debt.

Interpretation

The financial ratios indicate that the company is efficient in generating revenue from its assets and equity, in other words, the company is productive in managing its investments in assets and equity.

 

5. AMZN KEY EXECUTIVE COMPENSATION

AMZN KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 585,599 763,090 766,840 766,840 766,840
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 7,623,373 94,625,873 0 55,924,179 57,573,239
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 1,610,075 1,613,625 1,635,928 1,778,545 1,861,234
Total 9,819,047 97,002,588 2,402,768 58,469,564 60,201,313
Jeffrey P. Bezos / CEO
Salary 81,840 81,840 81,840 81,840 81,840
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 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000
Total 1,681,840 1,681,840 1,681,840 1,681,840 1,681,840
Andrew Jassy / CEO, Amazon Web
Salary 171,250 175,000 175,000 175,000 175,000
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 35,431,144 0 19,466,434 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 3,425 3,500 19,447 91,232 173,809
Total 174,675 35,609,644 194,447 19,732,666 348,809
Jeffrey A. Wike / CEO Worldwide Consumer
Salary 172,509 175,000 175,000 175,000 175,000
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 32,779,614 0 19,466,434 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 3,450 3,500 9,781 80,613 35,725
Total 175,959 32,958,114 184,781 19,722,047 210,725
Brian T. Olsavsky / Senior VP and CFO
Salary 160,000 160,000 160,000 160,000 160,000
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 7,623,373 4,395,447 0 6,770,149 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 3,200 3,200 3,200 3,200 3,200
Total 7,786,573 4,558,647 163,200 6,933,349 163,200
Jeffrey Blackburn / Senior VP, Business Development
Salary 171,250 175,000 175,000 175,000
Bonus 0 0 0 0
Annual Other Income 0 0 0 0
Restricted Stock Award 22,019,668 0 10,221,162 57,573,239
Securities Options 0 0 0 0
LTIP Payout 0 0 0 0
Non-Equity Compensation 0 0 0 0
Other Compensation 3,425 3,500 3,500 48,500
Total 22,194,343 178,500 10,399,662 57,796,739

Facts:

  • The total key executive compensation in 2015 was $9,819,047.
  • The total key executive compensation in 2016 was $97,002,588.
  • Key executive compensation in 2017 was $2,402,768.
  • Key executive compensation in 2018 was $58,469,564.
  • Executive compensation in 2019 was $60,201,313.

Explanation

  • Total key executive compensation represents 0.52 percent of the net income in 2019.
  • The total compensation of Jeffrey P. Bezos / CEO represents 2.79 of the total compensation.
  • The total compensation of Andrew Jassy / CEO, Amazon Web represents 0.58 percent of the total compensation.
  • Total compensation of Jeffrey A. Wike / CEO Worldwide Consumer represents 1.35 percent of the total compensation.
  • Key executive compensation of Brian T. Olsavsky / Senior VP and CFO represents 0.27 percent of the total compensation.
  • Compensation of Jeffrey Blackburn / Senior VP, Business Development represents 96 percent of the total compensation.

Interpretation

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

 

6. AMZN LOBBYING AND CONTRIBUTIONS

AMZN LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
2000 $492,000
2001 $847,200
2002 $920,000
2003 $920,000
2004 $920,000
2005 $920,000
2006 $1,560,000
2007 $1,622,000
2008 $1,340,000
2009 $1,810,000
2010 $2,050,000
2011 $2,220,000
2012 $2,500,000
2013 $3,456,831
2014 $4,940,000
2015 $9,435,000
2016 $11,354,000
2017 $13,000,000
2018 $14,400,000
2019 $16,790,000
2020 $9,165,000

Facts:

Since 2000 to the current date 2020, Amazon.com Inc is incurring lobbying and contributions expenditures to politicians. The annual record is seen above.

Explanation

A 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

Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.

 

7. AMZN FINANCIAL STRENGTH

AMZN FINANCIAL STRENGTH

DATA:

Working Capital 8,522,000,000
Total Assets 225,248,000,000
Sales 321,782,000,000
EBIT 16,869,000,000
Market value of equity 1,676,200,000,000
Book value of total liabilities 163,188,000,000
Retained earnings 31,220,000,000

 

CALCULATION Ratio Score Result
A – Working Capital / Total Assets 0.04 1.2 0.05
B – Retained Earnings / Total Assets 0.14 1.4 0.19
C – EBIT / Total Assets 0.07 3.3 0.25
D – Market Value of Equity / Book Value of Total Liabilities 10.27 0.6 6.16
E – Sales / Total Assets 1.43 1 1.43
Z-Score 8.08

 

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 Amazon.com Inc was calculated at 8.08 score. It indicates that the company is very far in declaring bankruptcy in near future or in other terms, the company is not close to insolvency according to Dr. Altman’s grading scale. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. AMZN has a strong financial health.

 

OVERVIEW

Amazon.com Inc is a stable company, healthy and profitable. The market value of Amazon.com soared 25 and 72 percent in 2019 and the trailing twelve months, respectively, due to the management’s outstanding performance. Consequently, the stock price of Amazon.com was overvalued from the date of this writing and posting. 

CITATION

https://www.amazon.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2000&id=D000023883

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

Researched and written by Criselda

 

 

GoDaddy Inc A (GDDY) Extended Graph Analysis

August 22nd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

GoDaddy logo

GoDaddy is a publicly traded company that provides web hosting and domain registration services and it provides SSL certificates serving small businesses. The company was founded on February 8, 1997 in Baltimore, Maryland as Jomax Technologies and after two years of operations, it became GoDaddy Group Inc. Founded by Bob Parsons and headquartered in Scottsdale, Arizona and was incorporated and traded under NYSE:GDDY with more than 20,000 customers worldwide.

GoDaddy Inc A (GDDY) Extended Graph Analysis

 

1. GDDY CASH FLOW

GDDY CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 259,400,000 386,500,000 475,600,000 559,800,000 723,400,000 763,800,000
Net cash used for investing activities -145,900,000 -183,400,000 -1,570,100,000 -254,800,000 -135,300,000 -243,400,000
Net cash provided by (used for) financing activities 95,700,000 15,100,000 1,107,500,000 47,000,000 -456,900,000 -945,500,000
Capital expenditure -79,300,000 -62,800,000 -135,200,000 -97,000,000 -92,300,000 -77,100,000
Free cash flow 180,100,000 323,700,000 340,400,000 462,800,000 631,100,000 686,700,000
Working Capital -419,000,000 -329,000,000 -751,000,000 -458,000,000 -426,000,000 -426,000,000

Facts:

  • Net cash from operations was $763.8 million in the trailing twelve months.
  • Net cash used for investing activities was -$243 million in the trailing twelve months.
  • Cash provided by (used for) financing activities was -$946 million in the trailing twelve months.
  • Capital expenditures were -$77 million in the trailing twelve months.
  • Free cash flow was $687 million in the trailing twelve months.
  • Working capital was -$426 million in the trailing twelve months.

Explanation

  • Cash from operations is increasing year-over-year and it grew 194 percent in 5 years.
  • Cash used for investing activities were investment in property, plant and equipment, acquisitions, net, purchases of investments and intangible assets.
  • Cash provided by (used for) financing activities were debt repayment and common stock repurchased.
  • Capital expenditures were purchased of property, plant and equipment.
  • Free cash flow increases year-over-year and has a growth of 281 percent in five years.
  • Working capital was negative in the last five years due to current liabilities being higher than the current assets.

Interpretation

The management had managed to generate cash from operations and free cash flow in the last five years. However, the working capital was negative due to higher leveraged.

2. GDDY BALANCE SHEET

GDDY BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 352,500,000 572,700,000 595,000,000 951,300,000 1,086,400,000
Current Assets 693,900,000 932,800,000 1,059,500,000 1,427,300,000 1,575,300,000
Net property, plant and equipment 225,000,000 231,000,000 297,900,000 299,000,000 455,200,000
Total non-current assets 2,804,900,000 2,854,100,000 4,678,800,000 4,656,100,000 4,725,900,000
Total assets 3,498,800,000 3,786,900,000 5,738,300,000 6,083,400,000 6,301,200,000
Current liabilities 1,113,600,000 1,262,200,000 1,810,700,000 1,886,200,000 2,001,100,000
Non-current liabilities 1,959,400,000 1,962,200,000 3,441,100,000 3,004,500,000 3,528,100,000
Total liabilities 3,073,000,000 3,224,400,000 5,251,800,000 5,290,700,000 5,529,200,000
Retained earnings -32,200,000 -48,700,000 87,700,000 164,800,000 -153,500,000
Stockholders equity 425,800,000 562,500,000 486,500,000 792,700,000 772,000,000

Facts:

  • Total cash was $1.86 billion in 2019.
  • Current assets were $1.575 billion in 2019.
  • Net property, plant and equipment was $455 million in 2019.
  • Non-current assets were $4.726 billion in 2019.
  • Total assets were $6.301 in 2019.
  • Current liabilities were $2 billion in 2019.
  • Non-current liabilities were $3.5 billion in 2019.
  • Total liabilities were $5.529 billion in 2019.
  • Retained earnings were -$154 million in 2019.
  • Stockholders equity was $772 million in 2019.

Explanation

  • Total cash increases year-over-year and has a growth of 208 percent in five years. And it represents 17 percent of the total assets.
  • Current assets increase year-over-year and have growth of 127 percent in five years.
  • Current assets represent 25 percent of total assets.
  • Net property, plant and equipment increased year-over-year and has a growth of 68 percent in five years.
  • Net property, plant and equipment represents 7 percent of the total assets.
  • Total assets increased year-over-year and have grown 80 percent in five years.
  • Current liabilities represent 36 percent of total liabilities.
  • Non-current liabilities represent 64 percent of the total liabilities.
  • Total liabilities was 88 percent of the total liabilities and stockholders equity.
  • Retained earnings represent negative 20 percent of the total stockholders equity.
  • Stockholders equity represents 20 percent of the total liabilities and the total stockholders equity.

Interpretation

The company is highly leveraged, the creditors have nearly 90 percent stake in the assets. Therefore cannot be considered the company has a sound balance sheet.

3. GDDY INCOME AND MARKET

GDDY INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 1,607,300,000 1,847,900,000 2,231,900,000 2,660,100,000 2,988,100,000 3,139,300,000
EBIT -31,000,000 37,600,000 190,100,000 164,500,000 211,300,000 -383,100,000
Net Income -75,600,000 -16,500,000 136,400,000 77,100,000 137,000,000 -493,600,000
EBITDA 107,400,000 195,800,000 395,600,000 405,500,000 428,200,000 -215,400,000
Market Capitalization 1,891,540,000 5,804,000,000 8,383,000,000 11,471,000,000 11,842,000,000 13,078,380,000
Intrinsic Value 135,669,000 266,465,000 4,561,428,000 7,868,897,000 13,432,301,000 40,266,376,000

Facts:

  • Revenue was $3 billion in the trailing twelve months.
  • EBIT was -$383 million in the trailing twelve months.
  • Net income was -$494 million in the trailing twelve months.
  • EBITDA was -$215 million in the trailing twelve months.
  • Market capitalization was $13 billion in the trailing twelve months.
  • Intrinsic value was $40 billion in the trailing twelve months.

Explanation

  • Revenue growth in five years was 95 percent.
  • EBIT was erratic in movement in the last five years and represented -12 percent of the total revenue.
  • Net income was erratic in movement in the last five years and suffered a fall-off of 460 percent. Moreover, it represented -16 percent of the total revenue. 
  • EBITDA increases year-over-year from 2015 to 2019, however in the trailing twelve month 2020 it has a negative amount and suffered a downturn of 150 percent from 2019. 
  • Market capitalization increases year-over-year in the last five years and it grew 591 percent in five years.
  • Intrinsic value increased year-over-year and grew 200 percent from 2019 to the trailing twelve months.
  • Intrinsic value was higher than the market value by 208 percent in the trailing twelve months.
  • The stock price of GoDaddy was undervalued.

Interpretation

Net income was unstable in the last five years and it suffered a negative bottomline in 2015, 2016 and the trailing twelve months. The company is not profitable. The market capitalization was undervalued in the trailing twelve months.

4. GDDY FINANCIAL RATIOS

GDDY FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.48 0.51 0.47 0.45 0.48 0.50
Return on assets % -1.40 -0.45 2.86 1.30 2.21 -7.87
Return on equity % -11.34 -3.34 26.01 12.05 17.51 -144.37
Return on invested capital % 1.31 1.15 8.22 4.87 6.19 -13.96
Debt/Equity 2.44 1.84 4.96 3.02 3.33 3.33

Facts:

  • Asset turnover was 0.50 ratio in the trailing twelve months.
  • Return on assets was -7.87 percent in the trailing twelve months.
  • Return on equity was -144.37 percent in the trailing twelve months.
  • Return on invested capital was -13.96 percent in the trailing twelve months.
  • Debt/Equity ratio was 3.33 in the trailing twelve months.

Explanation

  • Asset turnover indicates that for every dollar invested in the asset, the company generated 50 cents of sales.
  • Return on assets indicate that for every $1 invested in assets it generated a loss of -8 cents of loss in net income.
  • Return on equity indicates that for every dollar invested in equity it generated a loss of 144 cents per share of net income.
  • Return on invested capital indicates that the company generated a loss of 14 cents  over its capital based.
  • Debt/Equity ratio was high; it indicates that the company uses $3.33 in debt for every $1 of equity. The debt level is 333 percent in equity.

Interpretation

The financial ratios were not impressive, it shows that the management was not able to generate a positive return on the investment made in assets and equity. Moreover, investment in capital based suffered loss in the trailing twelve months.

5. GDDY KEY EXECUTIVE COMPENSATION

GDDY KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 1,264,538 1,892,358 2,265,000 2,713,077 2,883,335
Bonus 0 45,000 0 0 1,000,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 8,119,203 3,463,685 27,821,430 34,058,153
Securities Options 0 6,548,894 624,410 7,481,483 14,433,563
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 995,460 1,367,010 1,759,000 2,129,000 2,364,400
Other Compensation 10,382 124,991 212,983 37,715 39,104
Total 2,270,380 18,097,456 8,325,078 40,182,705 54,778,555
Aman Bhutani, CEO
Salary 326,027
Bonus 1,000,000
Annual Other Income 0
Restricted Stock Award 6,334,620
Securities Options 6,332,801
LTIP Payout 0
Non-Equity Compensation 315,595
Other Compensation 1,538
Total 14,310,581
Scott W. Wagner/Former CEO
Salary 750,000 750,000 750,000 750,000 542,308
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 16,978 0 12,713,505 8,950,715
Securities Options 0 0 0 3,177,964 3,600,324
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 705,000 597,600 750,000 750,000 491,293
Other Compensation 5,382 5,750 5,000 7,500 7,500
Total 1,460,382 1,370,328 1,505,000 17,398,969 13,592,143
Ray E. Winborne/CFO
Salary 192,308 500,000 500,000 500,000
Bonus 45,000 0 0 0
Annual Other Income 0 0 0 0
Restricted Stock Award 4,249,971 1,222,979 3,349,598 4,333,271
Securities Options 4,249,995 0 1,122,658 1,260,128
LTIP Payout 0 0 0 0
Non-Equity Compensation 249,000 400,000 500,000 484,000
Other Compensation 108,460 192,798 7,571 7,500
Total 9,094,734 2,315,777 5,479,827 6,584,899
Ah Kee Andrew Low/COO
Salary 448,077 500,000
Bonus 0 0
Annual Other Income 0 0
Restricted Stock Award 3,260,917 6,260,679
Securities Options 2,245,316 1,800,175
LTIP Payout 0 0
Non-Equity Compensation 270,000 484,000
Other Compensation 7,500 7,500
Total 6,231,810 9,052,354
James M. Carroll/Former President of International Independents Business
Salary 514,538 515,000 515,000 515,000 515,000
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 1,663,464 628,774 2,122,717 543,105
Securities Options 0 1,649,231 624,410 935,454 900,088
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 290,460 256,470 309,000 309,000 29,912
Other Compensation 5,000 5,599 5,086 7,500 7,500
Total 809,998 4,089,764 2,082,270 3,889,762 7,064,805
Nima J. Kelly/Chief Legal Officer, Executive ViP and Secretary
Salary 435,050 500,000 500,000 500,000
Bonus 0 0 0 0
Annual Other Income 0 0 0 0
Restricted Stock Award 2,188,790 1,611,932 6,374,693 2,835,760
Securities Options 649,668 0 0 540,047
LTIP Payout 0 0 0 0
Non-Equity Compensation 263,940 300,000 300,000 290,400
Other Compensation 5,182 10,099 7,644 7,566
Total 3,542,630 2,422,031 7,182,337 4,173,773

Facts

  • Total key executive compensation in 2015 was $2,270,380.
  • Total key executive compensation in 2016 was $18,097,456.
  • Key executive compensation in 2017 was $8,325,078.
  • Key executive compensation in 2018 was $40,182,705.
  • Executive compensation in 2019 was $54,778,555.

Explanation

  • Total key executive compensation in 2019 represents 1.74 percent of the revenue.
  • Key executive compensation of Aman Bhutani, CEO represents 26 percent of the total key executive compensation in 2019.
  • Key executive compensation of Scott W. Wagner/Former CEO represents 25 percent of the total executive compensation in 2019.
  • Executive compensation of Ray E. Winborne/CFO represents 12 percent of the total key executive compensation in 2019.
  • Executive compensation of Ah Kee Andrew Low/COO represents 17 percent of the total key executive compensation in 2019.
  • Compensation of James M. Carroll/Former President of International Independents Business represents 13 percent of the total compensation in 2019.
  • Compensation of Nima J. Kelly/Chief Legal Officer, Executive ViP and Secretary represents 8 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. GDDY LOBBYING AND CONTRIBUTIONS

GDDY LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
2005 $20,000
2006 $460,000
2007 $580,000
2008 $638,000
2009 $715,500
2010 $802,000
2011 $1,224,500
2012 $746,250
2013 $377,000

Facts:

The record shows that GoDaddy Inc  was incurring lobbying and contributions expenditures from 2005 to 2013.

Explanation

A 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 July 23, 2019 and includes spending from January 1 – June 30. Prior years include spending from January through December.”

Interpretation

Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.

7. GDDY FINANCIAL STRENGTH

GDDY FINANCIAL STRENGTH

DATA

Working Capital -$426,000,000
Total Assets $6,301,200,000
Sales $3,139,300,000
EBIT -$383,100,000
Market value of equity $13,803,000,000
Book value of total liabilities $5,529,200,000
Retained earnings -$153,500,000

CALCULATIONS

Ratio Score Result
A – Working Capital / Total Assets -0.07 1.20 -0.08
B – Retained Earnings / Total Assets -0.02 1.40 -0.03
C – EBIT / Total Assets -0.06 3.30 -0.20
D – Market Value of Equity / Book Value of Total Liabilities 2.50 0.60 1.50
E – Sales / Total Assets 0.50 1.00 0.50
Z-Score     1.68


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 GoDaddy was calculated at 1.68 score. According to Dr. Edward Altman, this concept was adopted in business and finance to predict the likelihood of the company in getting into bankruptcy. The Altman grading scale of 0 – 1.8 indicates that the company will likely declare bankruptcy in the future.  In other terms, it also indicates that the firm is gradually approaching insolvency and bankruptcy. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. The financial health of GoDaddy is not favorable currently.

CITATION

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

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001609711&type=&dateb=&owner=include&start=0&count=40

https://www.opensecrets.org/federal-lobbying/firms/summary?cycle=2013&id=D000026241

Research and written by Criselda

AstraZeneca PLC ADR (AZN) Extended Graph Analysis

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

Company Profile

AZN logo

AstraZeneca PLC ADR (NYSE:AZN), primarily listed under London Stock Exchange. A global British-Swedish pharmaceutical biotechnology company. AZN operates as a holding company. 

The company has a variety of products for major diseases including Covid 19 vaccine. Founded on April 6, 1999 when the Swedish Astra AB and the British Zeneca Group were merged. Headquartered in Cambridge, UK.

 

AstraZeneca PLC ADR (AZN) Extended Graph Analysis

 

1. AZN CASH FLOW

AZN CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 3,324,000,000 4,145,000,000 3,578,000,000 2,618,000,000 2,969,000,000 3,495,000,000
Net cash used for investing activities -4,239,000,000 -3,969,000,000 -2,328,000,000 963,000,000 -657,000,000 -976,000,000
Net cash provided by (used for) financing activities 878,000,000 -1,324,000,000 -2,936,000,000 -2,044,000,000 -1,765,000,000 -3,429,000,000
Capital expenditure -2,788,000,000 -2,314,000,000 -1,620,000,000 -1,371,000,000 -2,460,000,000 -2,076,000,000
Free cash flow 536,000,000 1,831,000,000 1,958,000,000 1,247,000,000 509,000,000 1,419,000,000
Working Capital 1,138,000,000 -1,994,000,000 -3,233,000,000 -701,000,000 -2,554,000,000 -2,554,000,000

Facts:

  • Cash from operating activities was $3.5 billion in 2020 trailing twelve months.
  • Cash from investing activities was -$976 million in 2020 trailing twelve months.
  • Net cash provided by (used for) financing activities was -$3.4 billion in 2020 trailing twelve months.
  • Capital expenditure was -$2 billion in 2020 trailing twelve months.
  • Free cash flow was $1.4 billion in 2020 trailing twelve months.
  • Working capital was -$2.6 billion in 2020 trailing twelve months.

Explanation

  • Cash from operations was erratic in movement since 2015 to 2020 trailing twelve months. It grew 5 percent from 2015.
  • Cash from investing activities were investments in property, plant and equipment, acquisitions, purchases of investments and intangibles.
  • Net cash from financing activities was debt issued, dividends payments and other financing activities.
  • Capital expenditure were purchases of property, plant and equipment, and purchases of intangibles in 2020 trailing twelve months.
  • There was free cash flow in the last five years although  erratic in movement.
  • Working capital was negative since 2016 due to current liabilities being higher than the current assets.

Interpretation

AZN has managed to generate a positive cash flow from operations in the last five years. Moreover, free cash flow was positive in five years. Current liabilities were higher than current assets impacting the working capital.

 

2. AZN BALANCE SHEET

AZN BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 6,853,000,000 5,811,000,000 4,461,000,000 5,554,000,000 6,180,000,000
Current Assets 16,007,000,000 13,262,000,000 13,150,000,000 15,591,000,000 15,563,000,000
Net property, plant and equipment 6,413,000,000 6,848,000,000 7,615,000,000 7,421,000,000 8,335,000,000
Total non-current assets 44,117,000,000 49,264,000,000 50,204,000,000 45,060,000,000 45,814,000,000
Total assets 60,124,000,000 62,526,000,000 63,354,000,000 60,651,000,000 61,377,000,000
Current liabilities 14,869,000,000 15,256,000,000 16,383,000,000 16,292,000,000 18,117,000,000
Non-current liabilities 26,765,000,000 32,416,000,000 32,011,000,000 31,891,000,000 30,133,000,000
Total liabilities 41,634,000,000 47,672,000,000 48,394,000,000 48,183,000,000 48,250,000,000
Retained earnings 11,834,000,000 8,140,000,000 8,221,000,000 5,683,000,000 2,812,000,000
Stockholders equity 18,490,000,000 14,854,000,000 14,960,000,000 12,468,000,000 13,127,000,000

Facts:

  • Total cash was $6 billion in 2019.
  • Current assets were $16 billion in 2019.
  • Net property, plant and equipment was $8 billion in 2019.
  • Total non-current assets were $46 billion in 2019.
  • Total assets were $61 billion in 2019.
  • Current liabilities were $18 billion.
  • Non-current liabilities were $30 billion in 2019.
  • Total liabilities were $18 billion in 2019.
  • Total liabilities were $48 billion in 2019.
  • Retained earnings were $2.8 billion in 2019.
  • Stockholders equity was $13 billion in 2019.

Explanation

  • Total cash represents 10 percent of total assets in 2019.
  • Current assets represent 25 percent of the total assets in 2019.
  • Net property plant and equipment represents 14 percent of the total assets in 2019.
  • Total non-current assets represent 75 percent of the total assets in 2019.
  • Current assets grew 2 percent in five years.
  • Current liabilities represent 38 percent of total liabilities.
  • Current liabilities were higher than the current assets which mean that the AZN will have a hard time paying its current obligation in due time.
  • Non-current liabilities represent 62 percent of total liabilities.
  • Total liabilities represent 79 percent of total liabilities and stockholders equity.
  • Retained earnings represent 21 percent of equity.
  • Stockholders equity was 21 percent of the total liabilities and stockholders equity.

Interpretation

AZN is using more of the creditors funds than that of the shareholders investment.Moreover, the company has higher liabilities than the current liabilities which may indicate that the company will have difficulty in paying its current obligations when the due date comes.

 

3. AZN INCOME AND MARKET

AZN INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 24,708,000,000 23,002,000,000 22,465,000,000 22,090,000,000 24,384,000,000 25,247,000,000
EBIT 4,114,000,000 3,572,000,000 2,292,000,000 1,510,000,000 1,702,000,000 1,825,000,000
Net Income 2,825,000,000 3,499,000,000 3,001,000,000 2,155,000,000 1,335,000,000 1,522,000,000
EBITDA 6,390,000,000 6,589,000,000 5,976,000,000 6,542,000,000 6,143,000,000 6,450,000,000
Market Capitalization 86,458,000,000 68,964,000,000 87,127,000,000 94,423,000,000 130,873,000,000 136,021,000,000
Intrinsic Value 110,302,000,000 318,091,000,000 395,772,000,000 415,463,000,000 1,716,724,000,000 2,093,704,000,000

Facts:

  • Revenue was $25 billion in 2020 trailing twelve months.
  • EBIT was $1.8 billion in 2020 trailing twelve months.
  • Net income was $1.5 billion in 2020 trailing twelve months.
  • EBITDA was $6 billion in 2020 trailing twelve months.
  • Market capitalization was $136 billion in 2020 trailing twelve months.
  • Intrinsic value was $2 trillion in 2020 trailing twelve months.

Explanation

  • Revenue has growth of 2 percent in the last five years.
  • EBIT represents 7 percent of the revenue in 2020 trailing twelve months.
  • Net income represents 6 percent of the revenue in 2020 trailing twelve months.
  • EBITDA represented 25 percent of the revenue in 2020 trailing twelve months.
  • Market capitalization grew 57 percent in five years.
  • Intrinsic value is growing year-over-year and was higher than the market capitalization.

Interpretation

The total revenue increased 5 percent from 2019 to the trailing twelve months. Market capitalization increases year-over-year from 2016 to the current date, July 27, 2020. The stock price of AZN was undervalued.

 

4. AZN FINANCIAL RATIOS

AZN FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.42 0.38 0.36 0.36 0.4 0.42
Return on assets % 4.76 5.71 4.77 3.48 2.19 2.57
Return on equity % 14.82 20.99 20.13 15.71 10.43 14.32
Return on invested capital % 10.07 12.61 11.04 8.37 5.97 6.71
Debt/Equity 0.76 0.98 1.04 1.39 1.24 1.49
Net Margin % 11.43 15.21 13.36 9.76 5.47 6.03

Facts:

  • Asset turnover was averaging 0.42 in the trailing twelve months.
  • Return on asset was 2.57 percent in the trailing twelve months.
  • Return on equity was 14.32 percent in the trailing twelve months.
  • Return on invested capital was 6.71 percent in the trailing twelve months.
  • Debt/equity ratio was 1.49 in the trailing twelve months.
  • Net margin was 6.03 percent in the trailing twelve months.

Explanation

  • Asset turnover means that for every dollar invested in an asset, AZN generates $0.42 of sales.
  • Return on assets indicate that for every dollar invested in assets, the company generates 2.57 cents of net income.
  • Return on equity indicates that for every dollar invested in equity, AZN generated 14.32 cents of profit.
  • The return on invested capital means AZN generated 6.71 cents for every dollar investment in capital.
  • Debt/Equity indicates that the company uses $1.49 in debt for every dollar in equity, in other terms, debt level is 149 percent of equity.
  • Net margin indicates that for every dollar in revenue, AZN earns $0.06 in net profit.

Interpretation

AZN has managed to generate a fair enough return on its investments in assets and in equity. 

 

5. AZN KEY EXECUTIVE COMPENSATION

AZN KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary €1,861,000 €1,897,000 €1,945,000 €2,054,000
Bonus €3,078,000 €1,791,000 €2,941,000 €2,890,000
Annual Other Income €0 €0 €0 €0
Restricted Stock Award €0 €0 €0 €0
Securities Options €8,716,000 €13,411,000 €8,202,000 €15,422,000
LTIP Payout €0 €0 €0 €0
Non-equity compensation €0 €0 €0 €0
Other Compensation €180,000 €213,000 €319,000 €353,000
Total €14,352,000 €17,839,000 €13,947,000 €21,290,000
Pascal Soriot/Executive Director, CEO
Salary €1,167,000 €1,190,000 €1,220,000 €1,289,000
Bonus €2,042,000 €1,167,000 €1,916,000 €1,933,000
Annual Other Income €0 €0 €0 €0
Restricted Stock Award €0 €0 €0 €0
Securities Options €4,723,000 €10,533,000 €5,718,000 €10,487,000
LTIP Payout €0 €0 €0 €0
Non-equity compensation €0 €0 €0 €0
Other Compensation €115,000 €142,000 €1,215,000 €234,000
Total €8,397,000 €13,389,000 €9,435,000 €14,330,000
Marc Dunoyer/Executive Director, DFO
Salary €694,000 €707,000 €725,000 €765,000
Bonus €1,036,000 €624,000 €1,025,000 €957,000
Annual Other Income €0 €0 €0 €0
Restricted Stock Award €0 €0 €0 €0
Securities Options €3,993,000 €2,878,000 €2,484,000 €4,935,000
LTIP Payout €0 €0 €0 €0
Non-equity compensation €0 €0 €0 €0
Other Compensation €65,000 €71,000 €104,000 €119,000
Total €5,955,000 €4,450,000 €4,512,000 €6,960,000

Facts:

  • Total key executive compensation in 2015 was €14,352,000.
  • Total key executive compensation in 2016 was €17,839,00.
  • Key executive compensation in 2017 was €13,947,000.
  • Key executive compensation in 2019 was €21,290,000.

Explanation:

  • The total key executive compensation in 2019 represents 1.64 percent of the net income.
  • The total compensation of Pascal Soriot/Executive Director, CEO represents 67 percent of the total key executive compensation in 2019.
  • Total compensation of Marc Dunoyer/Executive Director, DFO represents 33 percent of the total key executive compensation in 2019.

Interpretation

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

 

6. AZN LOBBYING AND CONTRIBUTIONS

AZN LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
2007 $4,935,500
2008 $5,196,000
2009 $5,932,000
2010 $5,790,000
2011 $5,640,000
2012 $3,570,000
2013 $4,180,000
2014 $2,890,000
2015 $3,048,733
2016 $2,838,980
2017 $2,389,000
2018 $2,490,000
2019 $2,880,000
2020 $1,560,000

Facts:

AZN was incurring lobbying and contribution expenses annually since 2007 to the current date as seen in the table above taken from OpenSecret.org.

Explanation

A 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 July 23, 2020 and includes spending from January 1 – June 30. Prior years include spending from January through December.”

Interpretation

The amount of contributions by the company varies every cycle depending on the attention given by the federal government on their issues.

 

7. AZN FINANCIAL STRENGTH

AZN FINANCIAL STRENGTH

DATA

Working Capital -$2,554,000,000
Total Assets $61,377,000,000
Sales $25,247,000,000
EBIT $1,825,000,000
Market value of equity $152,407,200,000
Book value of total liabilities $48,250,000,000
Retained earnings $2,812,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets -0.04 1.2 -0.05
B – Retained Earnings / Total Assets 0.05 1.4 0.06
C – EBIT / Total Assets 0.03 3.3 0.10
D – Market Value of Equity / Book Value of Total Liabilities 3.16 0.6 1.90
E – Sales / Total Assets 0.41 1 0.41
Z-Score 2.42

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 AstraZeneca was calculated at 2.42. According to Dr. Altman a score of 1.8 to 3.0 indicates that the company is likely to declare bankruptcy in the future. In other words, it indicates that the company is gradually approaching bankruptcy or insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. AZN has a negative working capital structure which impacted its financial strength.

Overview

The company is leveraging more than its equity, The working capital was negative since 2014 due to higher liabilities than current assets. The ratio between equity and liabilities was 26.58 percent.The creditors have more stake than the stockholders. The company has not suffered a negative bottom line in the last five years, the management was able to generate sufficient revenue for the operation of the business. 

Moreover, the calculated intrinsic value was higher than that of the market value. The stock price of AZN was undervalued which may mean a weak investment demand. AZN is head-to-head in developing a vaccine for Covid 19 and has already undergone several trial testing. Foreseen soar in revenue in the near financial period. On the other hand, might indicate a good opportunity for a Buy. 

Citation

https://www.astrazeneca.com/

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

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000043112

Research and written by Criselda

 

 

JPMorgan Class A & Co (JPM) Extended Graph Analysis

July 15th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

JPM logo

JPMorgan Chase & Co. is the oldest and largest  financial institution and a multinational investment bank. Headquartered in New York, New York, United States. The company was founded on December 1, 2000 by AAron Burr and incorporated in Delaware. The company is a provider of multiple investment banking and financial services.

JPMorgan chase & Co. is traded as NYSE:JPM, its predecessor was Bank of the Manhattan Company which was founded in September 1, 1799

JPMorgan Chase & Co (JPM) Extended Graph Analysis

 

1. JPM Cash Flow

JPM CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 73,466,000,000 20,196,000,000 -2,501,000,000 14,187,000,000 6,046,000,000 -33,846,000,000
Net cash used for investing activities 106,980,000,000 -114,949,000,000 -10,283,000,000 -197,993,000,000 -54,013,000,000 -225,464,000,000
Net cash provided by (used for) financing activities -187,511,000,000 98,271,000,000 14,642,000,000 34,158,000,000 32,987,000,000 325,857,000,000
Capital expenditure -77,008,000,000 -124,102,000,000 -107,658,000,000 -104,459,000,000 -255,576,000,000 -354,142,000,000
Free cash flow 73,466,000,000 20,196,000,000 -2,501,000,000 14,187,000,000 6,046,000,000 -33,846,000,000

Facts:

  • Net cash from operating activities was -$33.846 billion in 2020 trailing twelve months.
  • Net cash from investing activities was -$225.464 billion in 2020 trailing twelve months.
  • Cash provided by (used for) financing activities was $325857 billion in 2020 trailing twelve months.
  • Capital expenditures were -$354.142 billion in 2020 trailing twelve months.
  • Free cash flow was -$33.846 billion in 2020 trailing twelve months.

Explanation

  • Cash from operating activities was negative due to the impact of a significant amount of accounts receivable.
  • Net cash used for investing activities was purchases of property, plant and equipment and other investing activities..
  • Net cash provided by (used for) financing activities was preferred stock issued, common stock repurchased, dividends payments and a significant amount of other financing activities.
  • Capital expenditures were purchases of property, plant and equipment.
  • Free cash flow was erratic in movement in the last five years and has a negative amount in the trailing twelve months due to negative cash from operations.

Interpretations

The company was not efficient in generating cash from operations in 2020 trailing twelve months due to a decrease in net income by 18 percent from 2019. Free cash flow was negative as well due to negative cash from operations.

2. JPM BALANCE SHEET

JPM BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 20,490,000,000 23,870,000,000 25,900,000,000 22,320,000,000 21,700,000,000
Net property, plant and equipment 14,360,000,000 14,130,000,000 14,160,000,000 14,930,000,000 25,818,000,000
Total assets 2,370,000,000,000 2,490,000,000,000 2,530,000,000,000 2,620,000,000,000 2,690,000,000,000
Total liabilities 2,120,000,000,000 0 2,280,000,000,000 2,370,000,000,000 2,430,000,000,000
Retained earnings 146,420,000,000 162,440,000,000 177,680,000,000 199,200,000,000 223,210,000,000
Stockholders equity 247,570,000,000 254,190,000,000 255,690,000,000 256,520,000,000 261,320,000,000

Facts:

  • Total cash was $21.7 billion in 2019.
  • Net property, plant and equipment was $26 billion in 2019.
  • Total assets were $2.690 trillion in 2019.
  • Total liabilities were $2.430 trillion in 2019.
  • Retained earnings was $223 billion in 2019
  • Stockholders equity was $261 billion in 2019.

Explanation

  • Total cash represents 0.81 percent of the total assets.
  • Net property, plant and equipment represent 1 percent of the total assets.
  • Total assets have a growth of 14 percent in five years.
  • Total liabilities represents 90 percent of the total liabilities and stockholders equity.
  • Retained earnings represents 85 percent of total equity.
  • Stockholders equity represents 10 percent of the total liabilities and equity.

Interpretation

The company is highly leveraged, it uses more of creditors money than the investors investment in equity. In other terms, the creditors have more stake in the company.

3. JPM INCOME AND MARKET

JPM INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 93,543,000,000 95,668,000,000 99,624,000,000 109,029,000,000 115,627,000,000 114,755,000,000
Net Income 24,442,000,000 24,733,000,000 22,778,000,000 30,923,000,000 34,844,000,000 28,483,000,000
Market Capitalization 241,899,000,000 308,768,000,000 371,052,000,000 319,780,000,000 429,913,000,000 296,506,000,000
Intrinsic Value 303,298,000,000 403,087,000,000 839,971,000,000 707,132,000,000 973,461,000,000 778,154,000,000

Facts

  • Revenue was $115 billion in 2020 trailing twelve months.
  • Net income was $28 billion in 2020 trailing twelve months
  • Market capitalization was $295.506 billion in 2020 trailing twelve months.
  • Intrinsic value was $778 billion in 2020 trailing twelve months.

Explanation

  • Revenue grew 23 percent in five years.
  • Net income grew 17 percent in five years.
  • Market capitalization was lesser by 31 percent against intrinsic value from 2019 to the trailing twelve months.
  • Intrinsic value was higher than market capitalization meaning the stock price of JPM was undervalued.

Interpretation

Net income represents 25 percent of the revenue. The company’s income statement does show any negative bottom line in the last five years.

4. JPM FINANCIAL RATIOS

JPM FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.03 0.04 0.04 0.04 0.04 0.04
Return on assets % 0.91 0.93 0.90 1.19 1.30 0.96
Return on equity % 10.34 10.05 9.86 13.35 14.91 12.21
Debt/Equity 1.30 1.29 1.24 1.22 1.24 1.29

Facts

  • Asset turnover was averaging 0.04 in 2020 trailing twelve months.
  • Return on assets was 0.96 percent in 2020 trailing twelve months.
  • Return on equity was 12.21 percent in 2020 trailing twelve months.
  • Debt/Equity ratio was 1.29 in 2020 trailing twelve months.

Explanation

  • Asset turnover indicates that for every dollar in assets, the company generated .04 cents of sales which is not very efficient in using its assets.
  • Return on assets indicted that for every $1 invested in assets it generated 0.96 cents of net income.
  • Return on equity indicates that for every dollar invested in equity it generated 12 cents in profit.
  • Debt/Equity ratio indicates that for every dollar invested in equity the company has $1.29 in debt. Debt level is 129 percent of equity.

Interpretation

Financial ratios show that the management was not very efficient in generating a return on the investment made.The company is highly leveraged.

5. JPM KEY EXECUTIVE COMPENSATION

JPM KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 9,884,250 11,303,234 11,998,628 12,026,026 12,655,889
Bonus 16,000,000 17,000,000 25,300,000 27,100,000 31,373,333
Annual Other Income 0 0 0 0 0
Restricted Stock Award 35,684,204 48,615,750 61,146,766 66,211,372 74,673,974
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 961,291 357,786 427,581 648,889 708,657
Total 62,529,873 77,340,235 98,947,621 106,004,281 119,556,090
James S Dimon, Chairman of the Board and CEO
Salary 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
Bonus 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 11,100,000 20,500,000 21,500,000 23,000,000 24,500,000
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 621,060 205,551 286,228 519,840 578,246
Total 18,230,313 27,236,892 28,321,737 30,033,745 31,612,616
Gordon A. Smith, Co-President and Co-COO, CEO of Consumer and Community Banking
Salary 750,000 750,000 750,000
Bonus 7,700,000 8,500,000 8,700,000
Annual Other Income 0 0 0
Restricted Stock Award 10,950,000 11,550,000 12,750,000
Securities Options 0 0 0
LTIP Payout 0 0 0
Non-Equity Compensation 0 0 0
Other Compensation 0 0 0
Total 19,405,985 20,804,089 22,209,071
Daniel Pinto, Co-President, Co-Chief Operating Officer, CEO of the Corporate and Investment Bank
Salary 6,884,250 8,303,234 8,238,628 8,276,026 8,239,222
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 9,584,204 11,615,750 10,696,766 12,761,372 13,723,974
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 217,881 103,640 80,384 68,548 72,246
Total 16,687,210 20,022,624 19,015,778 21,105,946 22,035,442
Mary Callahan Erdoes, CEO, Asset and Wealth Management
Salary 750,000 750,000 750,000 750,000 750,000
Bonus 6,900,000 7,300,000 7,500,000 7,900,000 8,100,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 9,450,000 10,330,000 10,950,000 11,250,000 11,850,000
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 0 0 0 0
Total 17,100,000 18,432,124 19,242,152 19,900,000 20,754,269
Marianne Lake, CEO, Consumer Lending
Salary 750,000 750,000 750,000 750,000 750,000
Bonus 4,100,000 4,700,000 5,100,000 5,700,000 4,840,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 5,550,000 6,150,000 7,050,000 7,650,000 8,550,000
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 0 0
Other Compensation 112,350 48,595 60,969 60,501 58,165
Total 10,512,350 11,648,595 12,960,969 14,160,501 15,198,165
Jennifer A. Piepzak, CFO
Salary 666,667
Bonus 3,733,333
Annual Other Income 0
Restricted Stock Award 3,300,000
Securities Options 0
LTIP Payout 0
Non-Equity Compensation 0
Other Compensation 0
Total 7,746,527

Facts:

  • Total key executive compensation was $62,529,873 in 2015.
  • Total key executive compensation in 2016 was $77,340,235.
  • Key executive compensation 2017 was $98,947,621.
  • Key executive compensation in 2018 was $106,004,281.
  • Executive compensation in 2019 was $119,556,090.

Explanation

  • Total key executive compensation represents 0.32 percent of the net income in 2019.
  • Total compensation of James S Dimon, Chairman of the Board and CEO represents 26 percent of the total key executive compensation.
  • Compensation of Gordon A. Smith, Co-President and Co-COO, CEO of Consumer and Community Banking represents 19 percent of the total compensation.
  • ‘Compensation of Daniel Pinto, Co-President, Co-Chief Operating Officer, CEO of the Corporate and Investment Bank represents 18 percent of the total key executive compensation.
  • The compensation of Mary Callahan Erdoes, CEO, Asset and Wealth Management represents 17 percent of the total compensation.
  • The compensation of Marianne Lake, CEO, Consumer Lending represents 13 percent of the key executive compensation.
  • Compensation of Jennifer A. Piepzak, CFO represents 6 percent of the total compensation.

Interpretation

The total key executive compensation was less than one percent of the total net income in 2019. 

6. JPM LOBBYING AND CONTRIBUTIONS

JPM LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
1999 $600,000
2000 $2,910,000
2001 $6,300,000
2002 $4,700,000
2003 $6,710,000
2004 $4,080,000
2005 $3,640,000
2006 $6,120,000
2007 $6,460,000
2008 $5,930,000
2009 $6,170,000
2010 $7,410,000
2011 $7,620,000
2012 $8,060,000
2013 $5,460,000
2014 $6,280,000
2015 $3,590,000
2016 $2,920,000
2017 $2,990,000
2018 $2,970,000
2019 $2,810,000
2020 $1,944,507

Facts:

  • JPMorgan is incurring lobbying and contributions expenditures since 2011 to politicians.

Explanation:

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

“Contributions to 527s are not included in the Individuals, PACs, Soft (Indivs), or Soft (Orgs) columns, so the sum of these columns may not equal the Total column.

The numbers on this page are based on contributions of $200 or more from PACs and individuals to federal candidates and from PAC, individual and soft money donors to political parties, as reported to the Federal Election Commission. While election cycles are shown in charts as 1996, 1998, 2000 etc. they actually represent two-year periods. For example, the 2002 election cycle runs from January 1, 2001 to December 2002.

Soft money contributions were not publicly disclosed until the 1991-92 election cycle. Soft money donations to parties were banned after the 2002 cycle.

Data for the current election cycle was released by the Federal Election Commission on June 22, 2020.”

Interpretation

Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.

Overview

The net margin was good at 25 percent in the trailing twelve months, it has diversity income streams. The company uses more resources from creditors than from the investor’s investment in equity. In other terms, the creditors have more stake than the investors.  The stock price of JPM was undervalued up to the point of writing and posting to websites.

CITATION

https://www.jpmorganchase.com/

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

https://www.opensecrets.org/orgs/summary?id=D000000103

Researched and written by Criselda

 

Visa Inc Class A (V) Extended Graph Analysis

July 2nd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

VISA logo

Visa Inc Class A (NYSE:V) is a payment technology company operating globally that allows consumers, businesses, banks and governments to use digital currency. The company introduced the electronic payment system over 60 years ago. There are more than 3 billion Visa accounts worldwide in more than 200 countries and regions. In 2019 there were 200 billion payments and cash transactions that were counting with the Visa card, and there were 11 trillion in payments and cash volumes. It uses artificial intelligent technology that analyses every detail of transactions. Visa network is made up of Fiber, Internet, Wireless and Virtual Connections that tie-up consumers, businesses, governments and financial institutions.

The company was founded in 1958 as BankAmericard by Dee Hock, and in 1976 BankAmericard became VISA. Headquartered in Foster City, California, USA.

 

Visa Inc Class A (V) Extended Graph Analysis

 

1. V Cash Flow

V CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 6,584,000,000 5,574,000,000 9,208,000,000 12,713,000,000 12,784,000,000 12,768,000,000
Net cash used for investing activities -1,435,000,000 -10,916,000,000 735,000,000 -3,084,000,000 -591,000,000 2,246,000,000
Net cash provided by (used for) financing activities -3,603,000,000 7,477,000,000 -5,924,000,000 -11,240,000,000 -12,061,000,000 -12,462,000,000
Capital expenditure -414,000,000 -523,000,000 -707,000,000 -718,000,000 756,000,000 -850,000,000
Free cash flow 6,170,000,000 5,051,000,000 8,501,000,000 11,995,000,000 12,028,000,000 11,918,000,000
Working Capital 5,518,000,000 6,267,000,000 9,029,000,000 6,911,000,000 7,555,000,000 7,555,000,000

Facts:

  • Net cash from operations was $12.8 billion in 2020 trailing twelve months.
  • Net cash from investing was $2.45 billion in 2020 in trailing twelve months.
  • Cash provided by (used for) financing activities was $-12.46 billion in 2020 in trailing twelve months.
  • Capital expenditures were $-850 million in 2020 trailing twelve months.
  • Free cash flow was $11.92 billion in 2020 in trailing twelve months.
  • Working capital was $7.56 billion in 2020 in trailing twelve months.

Explanation

  • Cash from operations increased year-over-year due to increases in net income. 
  • Cash from operations grew 94 percent in five years.
  • Cash used for investing activities were sales/maturities of investments, investment in property, plant and equipment, acquisitions and purchases of investments.
  • Net cash provided by (used for) financing activities were common stock repurchased, dividends paid and other financing activities.
  • Capital expenditures were investment in property, plant and equipment.
  • Free cash flow increases year over year and has a growth of 93 percent in five years.
  • Working capital grew 37 percent in five years.

Interpretation

The company has the capability of providing cash from operations year-over-year by providing a sufficient net income.

 

2. V BALANCE SHEET

V BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 6,015,000,000 8,938,000,000 13,438,000,000 11,709,000,000 12,074,000,000
Current Assets 10,892,000,000 14,313,000,000 19,023,000,000 18,216,000,000 20,970,000,000
Net property, plant and equipment 1,888,000,000 2,150,000,000 2,253,000,000 2,472,000,000 2,695,000,000
Total non-current assets 29,344,000,000 49,722,000,000 48,954,000,000 51,009,000,000 51,604,000,000
Total assets 40,236,000,000 64,035,000,000 67,977,000,000 69,225,000,000 72,574,000,000
Current liabilities 5,374,000,000 8,046,000,000 9,994,000,000 11,305,000,000 13,415,000,000
Non-current liabilities 5,020,000,000 23,077,000,000 25,223,000,000 23,914,000,000 24,475,000,000
Total liabilities 10,394,000,000 31,123,000,000 35,217,000,000 35,219,000,000 37,890,000,000
Retained earnings 11,843,000,000 10,462,000,000 9,508,000,000 11,318,000,000 13,502,000,000
Stockholders equity 29,842,000,000 32,912,000,000 32,760,000,000 34,006,000,000 34,684,000,000

Facts

  • Total cash was $12.07 billion in 2019.
  • Current assets were $20.97 billion in 2019.
  • Net property, plant and equipment was $2.7 billion in 2019.
  • Non-current assets were $51.6 billion in 2019.
  • Total assets were $72.57 billion in 2019.
  • Current liabilities were $13.42 billion in 2019.
  • Non-current liabilities were $24.48 billion in 2019
  • Total liabilities were $37.89 billion in 2019.
  • Retained earnings were $13.5 billion in 2019.
  • Stockholders equity was $34.68 billion in 2019.

Explanation

  • Total cash has increased 52 percent in five years although it has an erratic movement.
  • Total cash represents 17 percent of the total assets.
  • Current assets grew 93 percent in five years and it represents 29 percent of the total assets.
  • Net property, plant and equipment increased year-over-year and it grew 43 percent in five years. It represents 4 percent of the total assets.
  • Non-current assets grew 76 percent in five years and it represents 71 percent of the total assets.
  • Total assets increased year-over-year and it has a growth of 80 percent in five years.
  • Current liabilities represent 35 percent of total liabilities.
  • Non-current liabilities represent 65 percent of total liabilities.
  • Total liabilities represent 52 percent of total liabilities and shareholders equity.
  • Retained earnings was 39 percent of total equity.
  • Shareholders equity represents 48 percent of total liabilities and shareholders equity.

Interpretation

The balance sheet of Visa Inc was healthy and the company is liquid. The company has the ability to pay its current obligations in due time. The company is using both investors and creditors money at 48 and 52 percent, respectively in its business operations.

 

3. V INCOME AND MARKET

V INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 13,880,000,000 15,082,000,000 18,358,000,000 20,609,000,000 22,977,000,000 23,885,000,000
EBIT 9,078,000,000 9,762,000,000 12,163,000,000 13,561,000,000 15,401,000,000 15,962,000,000
Net Income 6,328,000,000 5,991,000,000 6,699,000,000 10,301,000,000 12,080,000,000 12,482,000,000
EBITDA 9,572,000,000 8,941,000,000 12,813,000,000 14,031,000,000 18,057,000,000 16,552,000,000
Market Capitalization 186,088,000,000 186,817,000,000 266,145,000,000 299,355,000,000 416,792,000,000 428,863,000,000
Intrinsic Value 234,104,000,000 232,119,000,000 388,515,000,000 410,963,000,000 594,397,000,000 540,593,000,000

Facts:

  • Revenue was $24 billion in 2020 trailing twelve months.
  • EBIT was $16 billion in 2020 trailing twelve months.
  • Net income was $12.5 in 2020 trailing twelve months.
  • EBITDA was $17 billion in 2020 trailing twelve months.
  • Market Capitalization was $428.88 billion in 2020 trailing twelve months.
  • Intrinsic value was $540.59 billion in 2020 trailing twelve months.

Explanation

  • The revenue increased year-over-year and it grew 72 percent in five years.
  • EBIT increases year-over-year and it grew 76 percent in five years.
  • EBIT is 67 percent of revenue.
  • Net income grew 97 percent in 5 years and increases year-over-year. 
  • Net income represented 52 percent of revenue.
  • EBITDA increases year-over-year and it grew 73 percent in five years.
  • EBITDA represented 59 percent of the total revenue.
  • Market capitalization increased year-over-year and it grew 130 percent in five years.
  • Intrinsic value was greater by 26 percent compared to the market capitalization.

Interpretation

The company is profitable and financially healthy. The management has the ability to produce sufficient revenue for the operation of the business and it showed in the last five years. Moreover, net margin was 52 percent,  In other words, the management has the ability and efficiency to earn an impressive profit. The stock price of VISA is undervalued by 26 percent.

 

4. V FINANCIAL RATIOS

V FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.35 0.29 0.28 0.30 0.32 0.33
Return on assets % 16.02 11.37 9.80 14.49 17.04 17.50
Return on equity % 22.05 20.79 23.76 35.65 41.83 43.09
Return on invested capital % 22.05 14.07 15.05 23.44 26.52 25.88
Debt/Equity 0.00 0.58 0.61 0.58 0.57 0.47

Facts:

  • Asset turnover was averaging 0.33 ratio in 2020 trailing twelve months.
  • Return on assets was 17.5 percent in 2020 trailing twelve months.
  • Return on equity was 43.09 percent in 2020 trailing twelve months.
  • Return on invested capital was 25.88 percent in 2020 trailing twelve months.
  • Debt/Equity ratio was 0.47 in 2020 trailing twelve months.

Explanation

  • Asset turnover ratio indicates that for every dollar of assets it generated 33 cents of sales.
  • Return on assets indicates that the company is generating $0.175 for every dollar invested in assets.
  • Return on equity indicates that for every dollar in shareholders equity it generated $0.43 in net profit.
  • Return on invested capital indicates that the company made $0.43 for every dollar invested in capital.
  • Debt/Equity ratio indicates that for every dollar in equity, the company has 47 cents in leverage.

Interpretation

The company is in good standing and financial health. The company was able to generate a good return on its investments.

 

5. V KEY EXECUTIVE COMPENSATION

V KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 2,047,674 2,350,090 4,100,912 4,775,172 4,875,220
Bonus 6,875,000 3,125,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 10,947,425 9,353,088 25,802,382 31,198,595 38,432,445
Securities Options 1,800,260 4,104,755 7,894,994 108,750,019 10,425,006
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 3,842,153 3,344,438 16,112,600 17,954,467 12,213,725
Other Compensation 1,015,585 165,776 152,428 115,916 139,486
Total 26,571,982 22,489,867 54,071,010 64,927,046 66,094,540
Alfred F. Kelly Jr., Chairman and CEO
Salary 1,150,799 1,300,038 1,400,059
Bonus 0 0 0
Annual Other Income 0 0 0
Restricted Stock Award 11,883,298 8,693,984 14,246,423
Securities Options 2,749,995 3,500,008 4,312,489
LTIP Payout 0 0 0
Non-Equity Compensation 5,875,000 5,973,500 4,270,000
Other Compensation 75,362 26,416 36,800
Total 21,734,454 19,493,946 24,265,771
Vasant M. Prabhu, Vice Chairman and CFO
Salary 547,616 850,032 850,032 1,000,038 1,000,040
Bonus 6,875,000 3,125,000 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 7,500,041 1,757,160 3,017,648 5,848,193 6,493,501
Securities Options 0 1,031,255 1,387,503 1,999,994 1,625,005
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,081,253 1,230,375 3,221,500 3,704,000 2,440,000
Other Compensation 979,180 124,626 16,200 16,500 26,800
Total 16,997,563 8,134,100 8,494,072 12,569,940 11,586,718
Ryan Mcinerney, President
Salary 750,029 750,029 750,029 900,035 900,047
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 1,951,504 3,984,063 4,363,957 6,777,537 7,133,141
Securities Options 928,242 1,476,498 1,437,500 2,250,003 1,825,008
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,498,275 10,153,125 2,842,500 3,333,600 2,196,000
Other Compensation 20,505 22,550 20,066 21,500 30,621
Total 5,163,379 7,401,817 9,417,311 13,286,026 12,088,417
Rajat Taneja, President Technology
Salary 750,029 750,029 750,029 900,035 900,047
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 1,495,880 3,611,865 4,575,318 6+803356 6,977,836
Securities Options 872,018 1,597,002 1,549,999 2,125,007 1,712,503
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,262,625 960,938 2,820,000 3,306,600 2,196,000
Other Compensation 15,900 18,600 17,450 17,750 22,215
Total 4,411,040 6,953,950 9,714,526 13,154,517 11,810,570
Kelly Mahon Tullier, EVP, General Counsel and corporate Secretary
Salary 600,023 675,026 675,027
Bonus 0 0 0
Annual Other Income 0 0 0
Restricted Stock Award 19,662,161 3,075,525 3,581,544
Securities Options 769,997 999,997 950,001
LTIP Payout 0 0 0
Non-Equity Compensation 1,353,600 1,636,767 1,111,725
Other Compensation 23,350 33,750 23,050
Total 4,710,647 6,422,617 6,343,064

Facts:

  • The key executive compensation in 2015 was $26,572,000.
  • Key executive compensation in 2016 was $22,490,000.
  • Key executive compensation in 2017 was $54,071,000.
  • Executive compensation in 2018 was $64,927,000.
  • The key executive compensation in 20149 was $66,095,000.

Explanation

  • The total key executive compensation represents 0.53 percent of the net income.
  • Total compensation of Alfred F. Kelly, CEO represented 37 percent of the total key executive compensation.
  • Total compensation of Vasant M. Prabhu, CFO represents 18 percent of the total key executive compensation.
  • Compensation of Ryan Mcinemey, President was 18 percent of the total key executive compensation.
  • Compensation of Rajat Taneja, President Technology was 18 percent of total key executive compensation.
  • The total compensation of Kelly Mahon Tullier, EVP, General Counsel and corporate Secretary represents 10 percent of the total key executive compensation.

Interpretation

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

 

 

6. V LOBBYING AND CONTRIBUTIONS

V LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
1998 $3,550,000
1999 $2,410,000
2000 $2,269,000
2001 $2,232,276
2002 $3,126,476
2003 $3,079,441
2004 $2,935,545
2005 $3,927,059
2006 $4,909,687
2007 $5,340,000
2008 $4,810,000
2009 $6,010,000
2010 $5,430,000
2011 $6,880,000
2012 $5,550,000
2013 $5,210,000
2014 $4,310,000
2015 $3,840,000
2016 $3,800,000
2017 $3,750,000
2018 $3,740,000
2019 $3,760,000
2020 $860,000

Facts:

Since 1998 to the current date, Visa Inc Class A is incurring lobbying and contributions expenditure to politicians. The annual record shows above.

Explanation

A 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

Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.

 

7. V FINANCIAL STRENGTH

V FINANCIAL STRENGTH

DATA

Working Capital $7,555,000,000
Total Assets $72,574,000,000
Sales $23,885,000,000
EBIT $15,962,000,000
Market value of equity $409,197,500,000
Book value of total liabilities $37,890,000,000
Retained earnings $13,502,000,000

 

CALCULATIONS

Ratio Score Result
A – Working Capital / Total Assets 0.10 1.20 0.12
B – Retained Earnings / Total Assets 0.19 1.40 0.26
C – EBIT / Total Assets 0.22 3.30 0.73
D – Market Value of Equity / Book Value of Total Liabilities 10.80 0.60 6.48
E – Sales / Total Assets 0.33 1.00 0.33
Z-Score 7.92

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 Visa Inc Class A was calculated at 7.92 score. It indicates that the company is very far in declaring bankruptcy in near future or in other terms, the company is not close to insolvency according to Dr. Altman’s grading scale. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Visa Inc has a strong financial health.

Overview

VISA Inc. Class A is financially healthy and stable. The profit and loss account shows that the company is profitable, which represents that the management is capable of producing a net income of half of the total revenue. Moreover, the stock price of VISA Inc is undervalued, in other words, the stock price is below the fair market value, moreover, per calculation there is a margin of safety in buying the stocks of VISA Inc Class A.

CITATION

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

https://investor.visa.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000029689

Researched and written by Criselda

Invesco Ltd (IVZ) Extended Graph Analysis

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

Company Profile

Invesco logo

Investco Ltd (NYSE:IVZ) is an investment management firm helping investors around the globe in achieving their goal profitably. They specialized in managing investment portfolios of $1.142 billion in assets on behalf of their clients worldwide. They have 8,000 employees in 25 countries which focus on their investment styles.

 

Invesco Ltd (IVZ) Extended Graph Analysis

 

1. IVZ CASH FLOW

IVZ CASH FLOW

2015 2016 2017 2018 2019 2020
Net cash flow provided by operating activitIes 1,053,500,000 129,300,000 1,370,700,000 828,800,000 1,116,600,000 1,160,000,000
Net cash used for investing activities -664,800,000 -990,600,000 -961,100,000 -2,898,700,000 -1,425,400,000 -1,544,000,000
Net cash provided by (used for) financing activities 23,300,000 470,100,000 169,000,000 1,540,000,000 201,300,000,000 384,600,000
Capital expenditure -124,500,000 -147,700,000 -111,700,000 -102,500,000 -124,300,000 -122,400,000
Free cash flow 929,000,000 -18,400,000 1,259,000,000 726,300,000 992,300,000 1,037,600,000
Working Capital 1,921,000,000 1,462,000,000 1,872,000,000 967,000,000 -10,463,000,000 -10,463,000,000

Facts:

  • Net cash flow provided by operating activities was $1.16 billion in 2020 trailing twelve months.
  • Net cash used for investing activities was S-1.54 billion in 2020 trailing twelve months.
  • Net cash provided by (used for) financing activities was $385 million in 2020 trailing twelve months.
  • Capital expenditure was $-122 million in 2020 trailing twelve months.
  • Free cash flow was $1 billion in the 2020 trailing twelve months.
  • Working capital was $-10.46 billion in 2020 trailing twelve months.

Explanation

  • Cash from operating activities was erratic in movement in the last five years due to unstable net income.
  • Cash used for investing activities were investment in property, plant and equipment and a significant amount on purchases of investment.
  • Cash provided by (used for) financing activities was debt issued.
  • Capital expenditure was investment in property, plant and equipment.
  • Free cash flow was erratic in movement in the last five years, however it grew 12 percent in five years.
  • Working capital was unstable and it suffered a negative amount in 2019, hence current liabilities are greater than that the current assets in significant amounts. However, the company managed to have a positive working capital from 2010 to 2018.  

Interpretation

The company was efficient in providing cash from operating activities in the last five years. There was free cash flow, however the company suffered negative working capital due to its current assets being lesser than the current liabilities. 

 

2. IVZ BALANCE SHEET

IVZ BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 2,533,800,000 2,070,200,000 2,517,700,000 1,805,400,000 1,701,200,000
Current Assets 9,974,400,000 11,734,600,000 16,634,400,000 14,223,400,000 3,036,400,000
Net property, plant and equipment 426,900,000 464,700,000 490,700,000 468,700,000 583,500,000
Total non-current assets 15,098,800,000 13,999,700,000 15,034,400,000 16,755,000,000 36,383,900,000
Total assets 25,073,200,000 25,734,300,000 31,668,800,000 30,978,400,000 39,420,300,000
Current liabilities 8,053,900,000 10,272,000,000 14,762,700,000 13,256,300,000 13,499,500,000
Non-current liabilities 9,134,000,000 7,958,500,000 8,210,000,000 9,143,300,000 12,058,300,000
Total liabilities 17,187,900,000 18,230,500,000 22,972,700,000 22,399,600,000 25,557,800,000
Retained earnings 4,439,600,000 4,833,400,000 5,489,100,000 5,884,500,000 5,917,800,000
Stockholders equity 7,885,300,000 7,503,800,000 8,696,100,000 8,578,800,000 13,862,500,000
Total Liabilities and Stockholders Equity 25,073,200,000 25,734,300,000 31,668,800,000 30,978,400,000 39,420,300,000

Facts:

  • Total cash was $1.7 billion in 2019.
  • Current assets were $3 billion in 2019.
  • Net property, plant and equipment was $564 million in 2019.
  • Non-current assets were $36 billion in 2019.
  • Total assets were $39 billion in 2019.
  • Current liabilities were $13 billion in 2019.
  • Non-current liabilities were $12 billion in 2019.
  • Total liabilities were $26 billion in 2019.
  • Retained earnings were $5.9 billion in 2019.
  • Stockholders’ equity was $13.86 billion in 2019.

Explanation

  • Total cash was erratic in movement in the last five years and has a negative growth of 33 percent in five years.
  • Current assets were erratic in movement in the last five years and have a negative growth of 70 percent in five years.
  • Net property, plant and equipment grew 37 percent in five years.
  • Non-current assets grew 141 percent in five years.
  • Total assets grew 57 percent in five years.
  • Current liabilities represent 53 percent of the total liabilities.
  • Non-current liabilities represent 47 percent of total liabilities.
  • Total liabilities represent 65 percent of total liabilities and equity.
  • Retained earnings represents 44 percent of equity.
  • Stockholders equity represents 35 percent of total liabilities and equity and it grew 76 percent in five years.

Interpretation

IVZ is not liquid and its liabilities are two-thirds against the total equity in 2019. The stockholders equity was increasing year-over-year in five years.. The company is using more of creditors money than the shareholders investment in operating the business.

 

3. IVZ INCOME AND MARKET

IVZ INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 5,122,900,000 4,734,400,000 5,160,300,000 5,314,100,000 6,117,400,000 6,501,700,000
EBIT 1,358,400,000 1,176,400,000 1,277,100,000 1,341,200,000 1,481,200,000 1,627,400,000
Net Income 968,100,000 854,200,000 1,127,300,000 882,800,000 688,300,000 651,300,000
EBITDA 1,726,300,000 1,401,200,000 1,640,800,000 1,391,700,000 1,286,200,000 1,222,100,000
Market Capitalization 13,978,000,000 12,395,000,000 14,875,000,000 6,647,000,000 8,150,000,000 3,956,000,000
Intrinsic Value 22,276,000,000 22,107,000,000 47,930,000,000 22,344,000,000 27,936,000,000 14,502,000,000

Facts:

  • Revenue was $6.5 billion in 2020 trailing twelve months.
  • EBIT was $1.6 billion in 2020 trailing twelve months.
  • Net income was $651 million in 2020 trailing twelve months.
  • EBITDA was $1.22 billion in 2020 trailing twelve months.
  • Market capitalization was $3.956 billion in 2020 trailing twelve months.
  • Intrinsic value was $14.5 billion in 2020 trailing twelve months.

Explanation

  • Revenue is increasing year-over-year and it grew 27 percent in five years.
  • EBIT represents 25 percent of the revenue.
  • Net income represents 10 percent of the revenue.
  • EBITDA represents 19 percent of the revenue generated.
  • Market capitalization was lower than the calculated intrinsic value.
  • Intrinsic value was higher than market capitalization by 267 percent.

Interpretation

The company is capable of producing enough revenue for its business operations. The net income was acceptable and has not suffered negative in the last five years.

 

4. IVZ FINANCIAL RATIOS

IVZ FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
Asset turnover (average) 0.23 0.19 0.18 0.17 0.17 0.19
Return on assets % 4.14 3.26 3.81 2.73 1.6 1.35
Return on equity % 11.64 10.78 13.5 9.91 6.13 5.16
Return on invested capital % 6.22 6.04 7.84 5.83 3.72 3.17
Debt/Equity 0.95 0.86 0.79 0.89 0.88 0.92

Facts:

  • Asset turnover was averaging 0.19 in 2020 trailing twelve months.
  • Return on assets was 1.35 percent in 2020 trailing twelve months.
  • Return on equity was 5.16 percent in 2020 trailing twelve months.
  • Return on invested capital was 3.17 percent in 2020 trailing twelve months.
  • Debt/Equity ratio was 0.92 in 2020 trailing twelve months.

Explanation

  • Asset turnover indicate that for every $1 in asset it generated $0.19 
  • The return on assets indicate that the company can earn a return of $.0135 net income.
  • Return on equity indicates that for every dollar invested in equity the company generated 317 cents of net income.
  • Return on invested capital indicates that the company makes $0.317 return on its invested capital.
  • Debt/Equity ratio indicates that for every dollar in equity, the company has 92 cents in leverage.

Interpretation

The company managed to produce returns on the investments made in assets and capital. Debt was high against equity.

 

5. IVZ KEY EXECUTIVE COMPENSATION

IVZ KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation    
Salary 2,201,884 2,183,408 3,091,877 3,090,422 3,079,436
Bonus 0 0 0 0 0
Annual Other income 0 0 0 0 0
Restricted Stock Award 20,192,299 19,241,890 22,282,447 22,542,672 21,984,802
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-equity Compensation 9,805,000 8,547,100 12,340,261 11,042,255 11,395,090
Other Compensation 266,218 241,109 305,860 306,709 345,970
Total 32,465,401 30,213,507 38,020,455 36,982,058 36,805,298
Martin L. Flanagan/ President and CEO
Salary 790,000 790,000 790,000 790,000 790,000
Bonus 0 0 0 0 0
Annual Other income 0 0 0 0 0
Restricted Stock Award 10,284,957 9,644,970 8,622,702 8,714,798 6,909,962
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-equity Compensation 4,650,000 4,045,500 4,268,003 3,300,000 3,704,000
Other Compensation 151,018 126,585 124,490 116,901 114,987
Total 15,875,975 14,607,055 13,805,195 12,921,699 11,518,949
Loren M. Starr/Senior Managing Director and Head of the Americas  
Salary 450,000 450,000 450,000 450,000 450,000
Bonus 0 0 0 0 0
Annual Other income 0 0 0 0 0
Restricted Stock Award 2,414,991 2,293,987 2,050,470 2,072,928 2,037,854
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-equity Compensation 1,080,000 939,600 991,278 911,976 912,000
Other Compensation 27,816 28,374 29,709 30,830 31,934
Total 3,972,807 3,711,961 3,521,457 3,465,734 3,431,788
Philip A. Taylor/Vice Chairman     
Salary 499,283 481,346 491,458 492,444 481,366
Bonus 0 0 0 0 0
Annual Other income 0 0 0 0 0
Restricted Stock Award 4,709,413 4,519,953 4,034,918 433,222 4,283,471
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-equity Compensation 2,600,000 2,262,000 2,352,480 2,234,856 1,459,090
Other Compensation 19,530 17,494 16,579 18,617 147,097
Total 7,828,226 7,280,793 6,895,435 7,079,139 6,241,024
Andrew R. Schlossberg/Senior Managing Director and Head of the Americas   
Salary 450,000 450,000 450,000
Bonus 0 0 0
Annual Other income 0 0 0
Restricted Stock Award 1,749,922 2,159,940 3,274,988
Securities Options 0 0 0
LTIP Payout 0 0 0
Non-equity Compensation 1,440,000 1,457,600 1,820,000
Other Compensation 41,210 47,442 87,966
Total 3,681,132 4,114,982 5,632,954
Gregory G. Mcgreeve/Senior Managing Director   
Salary 450,000 450,000 450,000
Bonus 0 0 0
Annual Other income 0 0 0
Restricted Stock Award 3,274,988 2,632,942 2,749,364
Securities Options 0 0 0
LTIP Payout 0 0 0
Non-equity Compensation 1,917,000 1,800,610 2,100,000
Other Compensation 27,861 29,349 30,309
Total 5,669,849 4,912,901 5,329,673
Andrew Tak Shing Lo/Senior Managing Director and Head of Invesco Asia Pacific 
Salary 462,601 462,062 460,419 457,978 458,070
Bonus 0 0 0 0 0
Annual Other income 0 0 0 0 0
Restricted Stock Award 2,782,938 2,782,980 2,549,447 2,628,842 2,729,163
Securities Options 0 0 0 0 0
LTIP Payout 0 0 0 0 0
Non-equity Compensation 1,475,000 1,300,000 1,371,500 1,337,213 1,400,000
Other Compensation 67,854 68,656 66,011 63,570 63,677
Total 4,788,393 4,613,698 4,447,377 4,487,603 4,650,910

Facts

  • Total key executive compensation in 2015 was $32.465 million.
  • Key executive compensation in 2016 was $30.214 million.
  • Key executive compensation in 2017 was $38.020 million.
  • The executive compensation in 2018 was $36.982 million.
  • The executive compensation in 2019 was $36.805 million.

Explanation

  • The total key executive compensation represents 5.35 percent of the net income  in 2019.
  • The total compensation of the CEO represents 31 percent of the total key executive compensation in 2019.
  • Total compensation of Loren M. Starr, Senior Managing Director and Head of the Americas represents 9.32 percent of the total key executive compensation in 2019.
  • Total compensation of Philip A. Taylor, Vice Chairman represents 17 percent of the total key executive compensation in 2019.
  • Compensation of Andrew R. Scholssberg, Senior Managing Director and Head of the Americas represents 15 percent of the total key executive compensation.
  • Compensation of Gregory Mcgreeve, Senior Managing director represents 14 percent of the total key executive compensation.
  • Compensation of Andrew Tak Shing Lo, Senior Managing Director and Head of Invesco Asia Pacific represents 13 percent of the total key executive compensation.

Interpretation

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

 

6. IVZ LOBBYING AND CONTRIBUTIONS

IVZ LOBBYING AND CONTRIBUTIONS

PERIOD USD
2006 $20,000
2007 $0
2008 $50,000
2009 $210,000
2010 $280,000
2011 $280,000
2012 $170,000
2013 $40,000
2014 $40,000
2015 $0
2016 $0
2017 $0
2018 $2,550,000
2019 $3,210,000
2020 $790,000

Facts:

Invesco Ltd is incurring lobbying and contributions expenses annually since 2006.

Explanation:

The lobbying expenses vary per cycle depending on the attention given by the federal government on their issues.

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.” 

 

7. IVZ FINANCIAL STRENGTH

IVZ FINANCIAL STRENGTH

DATA

Working Capital -$10,463,000,000
Total Assets $39,420,300,000
Sales $6,501,700,000
EBIT $1,627,400,000
Market value of equity $3,956,000,000
Book value of total liabilities $25,557,800,000
Retained earnings $5,917,800,000

 

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets -0.27 1.2 -0.32
B – Retained Earnings / Total Assets 0.15 1.4 0.21
C – EBIT / Total Assets 0.04 3.3 0.14
D – Market Value of Equity / Book Value of Total Liabilities 0.15 0.6 0.09
E – Sales / Total Assets 0.16 1 0.16
Z-Score     0.29

 

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

According to Dr. Altman grading scale of measurement 0 – 1.80 indicates that the company will declare bankruptcy in the future.In other terms, the company is close to insolvency. IVZ is a higher risk investment.

Overview

Overall, the financial strength of the company was unstable and risky due to its liabilities which impacted the company’s working capital structure. Investing with Invesco Ltd (IVZ) might be risky according to Dr. Altman measurement.

CITATION

https://www.invesco.com/corporate

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000026669

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

Researched and written by Criselda

 

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