Posts by criseldar

Semirara Mining and Power Corporation (SCC) Extended Graph Analysis

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

About the Company

SCC

Semirara Mining and Power Corporation started as a Semirara Coal Corporation and transformed into a Philippine power industry committed in providing affordable and reliable electricity to the country. The Founding Chairman is David M. Consunji. 

Incorporated in the Philippines on February 26, 1980 with exclusive rights to explore, extract and develop the coal resources in Semirara Island, Antique Province, the right remains to this day. SCC is vertically integrated coal-fired power plants in the country. 

Semirara Mining and Power Corporation became a publicly traded company in 1983 under the Philippine Stock Exchange with the ticker symbol SCC. The company is headquartered in 3rd Floor Dacon Building, 2281 Chino Roces Avenue Extension, Makati City, Philippines.

 

Semirara Mining and Power Corporation (SCC) Extended Graph Analysis

 

1. SCC CASH FLOWS

SCC CASH FLOWS

2014 2015 2016 2017 2018 2019
Net cash provided by operating activities 11,925,643,441 10,683,869,034 16,420,476,772 18,206,968,085 9,503,158,826 18,846,489,534
Net cash used for investing activities -10,671,263,716 -5,115,627,968 -6,689,482,960 -7,281,852,466 -8,572,237,935 -8,802,225,466
Net cash provided by (used for) financing activities -2,388,159,045 -4,467,782,858 -7,316,857,789 -9,440,375,645 -7,489,807,103 -7,038,035,424
Capital expenditure -10,739,495,786 -5,036,739,075 -7,242,108,616 -6,324,077,517 -9,539,112,245 -9,780,999,781
Free cash flow 1,186,147,655 5,647,129,959 9,178,368,156 11,882,890,568 -35,953,419 9,065,489,753

Facts:

  • Cash from operating activities were Php 18.846 billion in 2019.
  • Net cash used for investing activities were Php -8.802 billion in 2019.
  • Net cash provided by (used for) financing activities were -7 billion in 2019.
  • Capital expenditures were Php -9.781 billion in 2019.
  • Free cash flow was Php 9 billion in 2019.

Explanation

  • Cash from operating activities although erratic in movement had a growth of 58 percent in five years.
  • Cash from investing activities were investment in property, plant and equipment; and purchases of intangibles.
  • Net cash provided by financing activities were debt issued, debt repayment and dividend paid.
  • Capital expenditure was investment in property, plant and equipment.
  • Free cash flow increases year-over-year except in 2018 where it suffered negative due to changes in working capital.

Interpretation

The company has an acceptable free cash flow, although suffered negative it increased from Php-36 million to Php 9 billion from 2018 to 2019. The company has efficiently managed to generate cash from operations in the last five years.

 

2. SCC BALANCE SHEET

SCC BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 3,683,125,544 5,205,842,396 7,114,141,283 8,521,640,371 1,954,063,676 1,954,063,676
Current assets 12,772,627,810 15,092,708,536 21,154,329,852 24,333,646,377 25,739,222,770 25,739,222,770
Net property, plant and equipment 36,366,478,374 39,758,121,302 43,352,166,628 43,014,048,021 43,519,724,033 43,519,724,033
Non-current assets 39,128,747,884 42,064,328,709 44,606,146,650 44,262,759,312 45,309,715,454 45,309,715,454
Total assets 51,901,375,694 57,157,037,245 65,760,476,502 68,596,405,689 71,048,938,224 71,048,938,224
Short-term debt 3,332,638,748 8,183,728,394 3,431,583,887 3,555,960,317 10,426,073,925 10,426,073,925
Current liabilities 12,138,201,589 15,555,721,715 15,652,536,957 14,407,272,446 20,372,103,747 20,372,103,747
Long-term debt 16,088,724,435 11,359,881,203 13,258,162,966 14,468,517,855 10,042,954,442 10,042,954,442
Total liabilities 29,195,164,178 30,255,955,086 31,474,165,253 30,917,026,549 31,116,251,620 31,116,251,620
Stockholders’ equity 22,706,211,516 26,901,082,159 34,286,311,249 37,679,379,140 39,932,686,604 39,932,686,604

Facts:

  • Cash was Php 2 billion in 2019.
  • Current assets were Php 25.7 billion in 2019.
  • Net property, plant and equipment was Php 43.5 billion in 2019.
  • Non-current assets were Php 45 billion in 2019.
  • Total assets were Php 71 billion in 2019.
  • Short-term debt was Php 10 billion in 2019.
  • Current liabilities were Php 20 billion in 2019.
  • Long-term debt was Php 10 billion in 2019.
  • Total liabilities were Php 31 billion in 2019.
  • Stockholders equity was Php 40 billion in 2019.

Explanation

  • Total cash was erratic in movement in the last five years and has a negative growth in five years. It fell 77 percent in one year from 2017 to 2018.
  • Cash represents 8 percent of current assets.
  • Current assets have doubled in five years. It represents 36 percent of total assets.
  • Property, Plant and equipment had increased 20 percent in five years. It represents 96 percent of non-current assets.
  • Non-current assets represents 64 percent of total assets.
  • Total assets increases year-over-year and has a growth of 37 percent in five years.
  • Short-term debt represents 51 percent of current liabilities.
  • Current liabilities represents 65 percent of total liabilities.
  • Long-term debt represents 32 percent of total liabilities.
  • Total liabilities was 44 percent of total liabilities and equity.
  • Total equity represents 56 percent of total liabilities and shareholders equity.

Interpretation

The company’s balance sheet shows that the management is efficient in running its business operation year-over-year. Further, it shows its growing in the last five years. And has sufficient current assets to pay current obligations in due time. 

 

3. SCC INCOME AND MARKET

SCC INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Sales 28,585,341,089 24,680,171,579 36,584,375,140 43,943,489,219 41,968,512,823 45,234,431,331
EBIT 6,559,565,972 9,899,091,968 13,009,730,429 15,738,076,298 13,554,916,247 11,629,313,377
Net Income 6,861,294,479 8,486,909,081 12,040,669,988 14,209,139,819 12,025,381,058 11,608,835,822
Market Capitalization 151,763,000,000 145,884,000,000 138,529,000,000 156,710,000,000 97,975,000,000 99,250,000,000
Intrinsic Value 116,785,324,423 138,626,168,139 136,759,304,573 173,053,868,169 116,632,959,353 130,497,083,292
EBITDA 8,560,350,354 11,644,990,348 17,110,448,223 22,671,652,962 21,406,861,156 19,509,179,548

Facts:

  • Sales were Php 45 billion in 2019.
  • EBIT was Php 11.629 billion in 2019.
  • Net income was Php 11.609 billion in 2019.
  • Market capitalization was Php 99.250 billion in 2019.
  • Intrinsic value was Php 130.487 billion in 2019.
  • EBITDA was Php 19.56 billion in 2019.

Explanation

  • Sales has a growth of 58 percent in five years and it grows year-over-year.
  • EBIT growth was 77 percent in five years.
  • Net income growth was 69 percent in five years.
  • Market capitalization decreased by 35 percent from 2014, it decreases year after year from 2014 to 2018, in 2019 it began to increased by 1.30 percent..
  • Intrinsic value was erratic in movement in the last five years, further, IV is greater by 31 percent against market value.
  • EBITDA growth was 128 percent in five years.

Interpretation

The net income of SCC represents 26 percent of Sales which is impressive, it never suffered a negative bottomline in the last five years. The management has managed to generate sufficient and increasing sales on its operations. SCC is profitable.

 

4. SCC FINANCIAL RATIOS

SCC FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset Turnover (average) 0.59 0.45 0.60 0.65 0.60 0.64
Return on Asset (ROA) % 14.20 15.56 19.59 21.15 17.22 16.50
Return on Equity (ROE) % 32.04 34.22 39.36 39.49 30.99 27.70
Financial Leverage (average) 2.29 2.12 1.91 1.82 1.78 1.72
Return on Invested Capital % 17.73 19.44 25.36 27.35 21.61 19.23
Interest Coverage 24.56 42.33 25.51 25.29 15.70 0.00
Earnings per Share Php 1.60 1.99 2.82 3.33 2.83 2.73

Facts:

  • Asset turnover was averaging 0.64 in 2019.
  • Return on assets was 16.5 percent in 2019.
  • Return on Equity was 27.70 percent in 2019.
  • Financial leverage was averaging 1.72 in 2019.
  • Return on invested capital was 19.23 percent.
  • Interest coverage was 15.70 in 2018.
  • Earnings per share was 2.73 in 2019.

Explanation

  • Asset turnover tells us that for every peso invested in assets the company generate 64 centavos of sales.
  • Return on assets indicates that for every peso in assets, the company generates 16.5 centavos of net income.
  • Return on equity tells us that every peso that was invested in equity it generates 27.7 centavos of net income.
  • Financial leverage indicates that for every peso in equity the company had Php 1.72 in total assets, Php 0.72 was borrowed.
  • Return on invested capital tells us that 19.23 percent is the return that the company makes over its invested capital.
  • Interest coverage tells us that SCC is able to make interest payments on its current obligations in due time.
  • Earnings per share means that if SCC distributed every peso of net income to its shareholders, each of their shares will receive Php 2.73.

Interpretation

Overall view of financial ratios indicates that the SCC is profitable.

 

5. SCC KEY OFFICERS

LIST OF KEY OFFICERS

NAME TITLE
Isidro A. Consunji CEO, Chairman of the Board
Maria Cristina C. Gotanum President, COO, Chief Risk Officer
Junalina S. Tabor CFO, Vice President
Jaime B. Garcia VP, Procurement and Logistics
Nena D. Arenas VP, Chief Governance Officer, Compliance Officer
Atty. John R. Sadullo VP, Legal Corporate Secretary, Corporate Information Officer
Antonio R. Delos Santos VP, Treasurer
Jose Antonio T. Villanueva VP, Marketing for Coal
Andreo O. Estrellado VP, Power Market and Commercial Operation
Ruben P. Lozada VP, Mining Operations, Resident Manager
Carla Cristina T. Levina VP, Chief Audit Executive
Jojo L. Tandoc VP, Human Resources and Organization Development
Kamine Andrea B. San Juan Assistant VP, Corporate Planning for Power

Explanation

  • Isidro A. Consunji is a BS Civil Engineering, University of the Philippines, Master’s Degree in Business Economics, Center for Research & Communication, Business Management, Asian Institute of Management, Advance Management from IESE School, Barcelona, Spain. 
  •  Maria Cristina C. Gotianun – BS Business Economics, University of the Philippines, Majored in Spanish, Instituto de Cultura Hispanica, Madrid, Spain
  • Jorge A. Consunji – BS Industrial Management, Engineering, La Salle University.
  • Cesar A. Buenaventura – Bachelor of Science in Civil Engineering as a Fulbright Scholar, Lehigh University, Bethlehem, Pennsylvania 
  • Herbert M. Consunji – Bachelor of Science in Commerce Major in Accounting, De La Salle University.
  • Ma. Edwina C. Laperal – BS Architecture, University of the Philippines, Masters Degree in Administration, University of the Philippines
  • Josefa Consuelo C. Reyes – AB Economics, University of British Columbia, Vancouver, Canada. Strategic Business Economics Program University of Asia and the Pacific.
  • Luz Consuelo A. Consunji – Bachelor’s Degree in Commerce Major in Management, Assumption College; Masters Degree in Business Economics, University of Asia and the Pacific.
  • Rogelio M. Murga – BS Mechanical Engineering, University of the Philippines; Senior Management Program, Harvard Business School, Vevey, Switzerland; Honorary Degree of Doctor of Science – Honors Causa, FEATI University.
  • Honorio O. Reyes-Lao – Bachelors of Arts Major in Economics, De La Salle University; Masters Degree in Business Management, Asian Institute of Management.
  • Antonio Jose U. Periquet – MBA, Darden Graduate School of Business Masters Degree in Economics, Oxford University, Bachelor’s Degree in Economics, Ateneo de Manila University.

 

6. SCC LOBBYING AND CONTRIBUTIONS

SEARCHED:

OpenSecret.org     The LOBBYIST

Result:

 

No Politicians or Lobbyists Found

 

 

7. SCC FINANCIAL STRENGTH

SCC FINANCIAL STRENGTH

DATA

PhP
Working capital 5,367,000,000
Total assets 71,048,938,224
Sales 45,234,431,331
EBIT 11,629,313,377
Market value of equity 99,250,000,000
Book value of total liabilities 31,116,251,620
Retained earnings 20,468,072,403

CALCULATION:

Ratio Score Result
A – Working Capital / Total Assets 0.08 1.20 0.09
B – Retained Earnings / Total Assets 0.29 1.40 0.40
C – EBIT / Total Assets 0.16 3.30 0.54
D – Market Value of Equity / Book Value of Total Liabilities 3.19 0.60 1.91
E – Sales / Total Assets 0.64 1.0 0.64
Z-Score     3.58

 

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

 

Explanation

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

SCC has a Z-Score of 3.58. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy. In other terms, the company is not close to insolvency. The main factors of this statistical measurement is the profitability, liquidity, leverage and efficiency.

 

CITATION

http://www.semiraramining.com/our_organization

https://www.opensecrets.org/search?q=Semirara+Mining+and+Power+Corp+SCC&type=indiv&__cf_chl_captcha_tk__=a00a32188a7f3f85f65452c421f7a694ce5249e0-1575258353-0-ATFtgwWRMeDvt4iMyEHln_cmUthyzcEwWakDM8CDWFAjnNJG8KO3g6Yaw3rSIVpxFgyMhJ–rRfewraXaenfBeE2dU82-napg4-yJybfimHrTRE3A3ZHas9hNcdpdQBNVRm5xEVdT_fXaBJuatWzwQfz-7fFllcCEzFjBR-ose_2rAR4yRUF6bY9kbiYEVm6zRLRjfa18O3HCW_yZqFXe79BvIXifojvt2tnGyahP7ySG9HljRu-jA6OYvZSjl9S0JUCvEZf7ZQYMvB77F54hdshRamoCkb3FFdKDMIlxtxkDZbm_1ORWkppCrt-Ie6mJdLDbA6Bq4ObUu52z4PuDMdEt-Ufi7bIPnsIbRA24eFCOCkuPAyw-iAxqy6r2TEM_xknvqfXWZWoCIxzyYPAHfooY7RAYkkR_qJFr7-VgEq6xBFRhnveinLwcTee4NyFGg

 

 

Researched and written by Criselda

Twitter: criseldarome

 

PJSC LUKOIL Company (LKOH) Extended Graph Analysis

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

About the Company

Lukoil

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

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

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

 

PJSC Lukoil Company Extended Graph Analysis

1. LKOH CASH FLOWS

LKOH CASH FLOWS

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

Facts:

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

Explanation

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

Interpretation

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

 

2. LKOH BALANCE SHEET

LKOH BALANCE SHEET

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

Facts:

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

Explanation

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

Interpretation

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

 

3. LKOH INCOME AND MARKET

LKOH INCOME AND MARKET

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

Facts:

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

Explanation

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

Interpretation

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

4. LKOH FINANCIAL RATIOS

LKOH FINANCIAL RATIOS

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

Facts:

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

Explanation

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

Interpretation

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

5. LKOH KEY EXECUTIVE COMPENSATION

LKOH COMPENSATION OF DIRECTORS AND MANAGEMENT COMMITTEE MEMBERS

REMUNERATION OF DIRECTORS AND MANAGEMENT COMMITTEE MEMBERS

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

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

** Including the remuneration of the President of PJSC LUKOIL

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

Facts:

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

LUKOIL KEY PEOPLE

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

 

6. LKOH LOBBYING AND CONTRIBUTIONS

 

No Politicians or Lobbyist Found – OpenSecret.org  

Center for Responsive Politics

 

7. LKOH FINANCIAL STRENGTH

LKOH FINANCIAL STRENGTH

DATA

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

CALCULATION

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

 

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

 

Explanation:

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

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

 

CITATION

http://www.lukoil.com/

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

 

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

 

 

 

 

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

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

About the Company

vestas

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

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

 

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

 

1. VWS CASH FLOWS

VWS CASH FLOWS

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

Facts

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

Explanation

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

Interpretation

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

 

2. VWS BALANCE SHEET

VWS BALANCE SHEET

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

Facts:

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

Explanation

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

Interpretation

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

3. VWS FINANCIAL RATIOS

VWS FINANCIAL RATIOS

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

Facts:

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

Explanation

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

Interpretation

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

 

4. VWS INCOME AND MARKET

VWS INCOME AND MARKET

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

Facts

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

Explanation

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

Interpretation

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

 

5. VWS BOARD OF DIRECTORS COMPENSATION

VWS TOTAL BOARD OF DIRECTORS COMPENSATION

TOTAL COMPENSATION (in DKK)

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

Facts:

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

Explanation

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

Interpretation

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

 

6. LOBBYING AND CONTRIBUTIONS

VWS LOBBYING AND CONTRIBUTIONS

 

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

Facts:

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

Explanation

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

 

7. VWS FINANCIAL STRENGTH

VWS FINANCIAL STRENGTH

DATA:

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

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.10 1.20 0.12
B – Retained Earnings / Total Assets 0.26 1.40 0.36
C – EBIT / Total Assets 0.08 3.30 0.27
D – Market Value of Equity / Book Value of Total Liabilities 1.64 0.60 0.99
E – Sales / Total Assets 0.91 1.0 0.91
Z-Score 2.64

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

Explanation

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

Interpretation

The result of the calculated Z-Score of VWS was 2.64. Dr. Edward Altman indicate that a grading scale of 1.8 to 3 tells us that the company will likely declare bankruptcy in the near future.

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

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

CITATION

https://www.vestas.com/

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

Researched and written by Criselda

 

 

 

 

Costco Wholesale Corp (COST) Extended Graph Analysis

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

About the Company

costco logo

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

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

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

Costco Wholesale Corp (COST) Extended Graph Analysis

 

1. COST CASH FLOWS

COST CASH FLOWS

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

Facts:

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

Explanation:

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

Interpretation

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

 

2. COST BALANCE SHEET

COST BALANCE SHEET

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

Facts:

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

Explanation:

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

Interpretation

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

 

3. COST FINANCIAL RATIOS

COST FINANCIAL RATIOS

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

Facts:

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

Explanation:

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

Interpretation

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

 

4. COST INCOME AND MARKET

COST FINANCIAL RATIOS

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

Facts:

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

Explanation:

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

Interpretation

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

 

5. COST EXECUTIVE COMPENSATION

COST KEY EXECUTIVE COMPENSATION

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

Facts:

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

Explanation:

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

Interpretation

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

 

5.a COST KEY EXECUTIVE COMPENSATION CATEGORIZED

COST KEY EXECUTIVE COMPENSATION CATEGORIZED

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

Facts:

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

Explanation:

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

 

6. COST LOBBYING AND CONTRIBUTIONS

COST LOBBYING AND CONTRIBUTIONS - 2019

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

Facts:

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

Explanation:

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

COST TOTAL CONTRIBUTIONS BY PARTY RECIPIENT

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

Facts:

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

Explanation:

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

TOTAL CONTRIBUTIONS BY SOURCE OF FUNDS

COST TOTAL CONTRIBUTIONS BY SOURCE OF FUNDS

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

Facts:

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

Explanation:

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

 

7. COST FINANCIAL STRENGTH

COST FINANCIAL STRENGTH

DATA:

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

CALCULATION

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


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

 

Explanation

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

Interpretation

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

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

 

CITATION

https://www.costco.com/

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

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

Twitter: criseldarome

 

Ayala Land Inc (ALI) Extended Graph Analysis

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

About the Company

ayalaland

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

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

 

Ayala Land Inc (ALI) Extended Graph Analysis

 

1. ALI CASH FLOWS

ALI CASH FLOWS

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

Facts:

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

Explanation:

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

Interpretation

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

 

2. ALI BALANCE SHEET

ALI BALANCE SHEET

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

Facts:

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

Explanation:

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

Interpretation

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

 

3.  ALI FINANCIAL RATIOS

ALI FINANCIAL RATIOS

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

Facts:

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

Explanation:

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

Interpretation

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

 

4. ALI INCOME AND MARKET

ALI INCOME AND MARKET

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

Facts:

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

Explanation:

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

Interpretation

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

 

5. ALI BOARD OF DIRECTORS TOTAL COMPENSATION

ALI BOARD OF DIRECTORS TOTAL COMPENSATION

BOARD OF DIRECTORS TOTAL COMPENSATION IN 2018

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

Facts:

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

Explanation:

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

Interpretation

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

 

5.a EXECUTIVE COMPENSATION

ALI CEO AND PRESIDENT TOTAL COMPENSATION

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

Facts:

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

Explanation:

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

 

6. ALI LOBBYING AND CONTRIBUTIONS

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

 

7. ALI FINANCIAL STRENGTH

ALI FINANCIAL STRENGTH

DATA: (In PhP)

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


CALCULATION:

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

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

Explanation

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

Interpretation

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

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

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

CITATION

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

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

 

Researched and written by Criselda

 

Verizon Communications Inc (VZ) Extended Graph Analysis

October 24th, 2019 Posted by Extended Analysis No Comment yet

About the Company

verizon

Verizon Communications Inc is a telecommunication company operating globally and founded in October 7, 1983 and incorporated in Delaware. USA.The company is headquartered in New York, New York.

Verizon Communications was created by Bell Atlantic Corp. and GTE Corp. The company provides wireless voice and data services through its wireless segments, internet access on different devices.

Verizon Communications Inc (VZ) Extended Graph Analysis

1) VZ CASH FLOWS

VZ CASH FLOWS

2014 2015 2016 2017 2018 2019
Net cash provided by operating activities 30,631,000,000 38,930,000,000 22,715,000,000 25,305,000,000 34,339,000,000 33,742,000,000
Net cash used for investing activities -15,856,000,000 -30,043,000,000 -10,983,000,000 -19,372,000,000 -17,934,000,000 -17,795,000,000
Net cash provided by (used for) financing activities -57,705,000,000 -15,015,000,000 -13,322,000,000 -6,734,000,000 -15,377,000,000 -15,555,000,000
Capital expenditure -17,545,000,000 -27,717,000,000 -17,593,000,000 -17,830,000,000 -18,087,000,000 -17,260,000,000
Free cash flow 13,086,000,000 11,213,000,000 5,122,000,000 7,475,000,000 16,252,000,000 16,482,000,000

Facts:

  • The net cash provided by operating activities was $33.742 billion in 2019 trailing twelve months.
  • Net cash used for investing activities was -$17.795 billion in 2019 trailing twelve months.
  • Net cash provided by (used for) financing activities was -$15.555 billion in 2019 trailing twelve months.
  • The capital expenditure was -$17.260 billion in 2019 trailing twelve months.
  • Free cash flow was $16.482 billion in 2019 trailing twelve months.

Explanation:

  • Net cash provided by operating activities was erratic in movement, howbeit, it maintained an average of $31 billion in the last five years. The growth was 10 percent.
  • Cash used for investing activities is comprised of investment in property, plant and equipment, which represent 97 percent of the total. It also consists of acquisitions and purchases of intangibles. 
  • Net cash provided by (used for) financing activities represents debt repayment in significant amount, and payment of dividend at 64 percent of the total.
  • Capital expenditure represents investment in property, plant and equipment.
  • Free cash flow was positive in the last five years and it has grown 26 percent.

Interpretation

The company has managed to provide cash for the daily operation of the business, however further analysis should be done whether the cash was enough for its daily operation.

2. VZ BALANCE SHEET

VZ BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 11,153,000,000 4,820,000,000 2,880,000,000 2,079,000,000 2,745,000,000 2,745,000,000
Total current assets 29,623,000,000 22,280,000,000 26,395,000,000 29,913,000,000 34,636,000,000 34,636,000,000
Net property, plant and equipment 89,947,000,000 83,541,000,000 84,751,000,000 88,568,000,000 89,286,000,000 89,286,000,000
Total non-current assets 203,085,000,000 222,360,000,000 217,785,000,000 227,230,000,000 230,193,000,000 230,193,000,000
Total assets 232,708,000,000 244,640,000,000 244,180,000,000 257,143,000,000 264,929,000,000 264,929,000,000
Short-term debt 2,735,000,000 6,489,000,000 2,645,000,000 3,453,000,000 7,190,000,000 7,190,000,000
Total current liabilities 28,064,000,000 35,052,000,000 30,340,000,000 33,037,000,000 37,930,000,000 37,930,000,000
Long-term debt 110,536,000,000 103,705,000,000 105,433,000,000 113,642,000,000 105,873,000,000 105,873,000,000
Total liabilities 220,410,000,000 228,212,000,000 221,656,000,000 214,047,000,000 211,684,000,000 211,684,000,000
Total stockholders’ equity 12,298,000,000 16,428,000,000 22,524,000,000 43,096,000,000 53,145,000,000 53,145,000,000

 

Facts:

  • Total cash was $2.7 billion in 2018.
  • Current assets was $34.636 billion in 2018.
  • Net property, plant and equipment was was $89 billion in 2018.
  • Non-current assets was $230 billion in 2018.
  • Total assets was $264.9 billion in 2018.
  • Short-term debt was $7.1 billion in 2018.
  • Current liabilities was $37.93 billion in 2018
  • Long-term debt was $105.873 billion in 2018.
  • Total liabilities was $211.684 billion in 2018.
  • Stockholders equity was $3.1 billion in 2018.

Explanation:

  • Total cash represents one percent of the total assets in 2018.
  • Current assets represents 13 percent of the total assets and has a growth of 17 percent in five years.
  • Net property, plant and equipment represents 34 percent of the total assets, PPE was stable in the last five years.
  • Non-current assets represents 87 percent of the total assets. Intangible assets and PPE has a significant amount.
  • Total assets has grown 14 percent in five years.
  • Short-term debt represents 19 percent of the total current liabilities and 3 percent of the total liabilities in 2018.
  • Total current liabilities represents 18 percent of the total liabilities.
  • Long-term debt represents 50 percent of the total liabilities.
  • Non-current assets represents 82 percent of the total liabilities. Long-term debt has a significant amount.
  • Total liabilities represents 80 percent of the total liabilities and stockholders equity.
  • Stockholders equity represents 20 percent of the total liabilities and stockholders equity and has a growth of 332 percent in five years.

Interpretation

Balance sheet shows that current assets is lesser than the current liabilities by 9 percent in 2018. In other words, the company’s current assets is not enough to meet its current liabilities on time when due date comes. 

3. VZ FINANCIAL RATIOS

VZ FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset Turnover (avg) 0.50 0.55 0.52 0.50 0.50 0.48
Return on Asset (ROA) % 3.80 7.49 5.37 12.01 5.95 5.80
Return on Equity (ROE) % 37.65 124.48 67.40 91.74 32.27 29.17
Financial Leverage (avg) 18.92 14.89 10.84 5.97 4.98 5.00
Return on Invested Capital % 10.38 16.66 12.38 22.62 11.89 10.99
Interest Coverage 4.11 6.74 5.80 5.35 5.06 5.17

Facts:

  • The asset turnover was averaging 0.48 in 2019 trailing twelve months.
  • Return on assets was 5.80 percent in 2019 trailing twelve months.
  • Return on equity was 29.17 percent in 2019 trailing twelve months.
  • Financial leverage was averaging 5.00 in 2019 trailing twelve months.
  • Return on invested capital was 10.99 percent in 2019 trailing twelve months
  • The interest coverage was 5.17 in 2019 trailing twelve months

Explanation

  • Asset turnover indicate that for every dollar in assets, VZ generates 48 cents, which is not very efficient.
  • Return on assets indicate that the company generates 5.8 cents of net income for every dollar invested in assets. 
  • Return on equity indicates that VZ generated 29 cents in profit for every dollar invested in common stock. 
  • Financial leverage of 5.0 means that for every dollar in equity VZ had 5 in total assets. The company is running at risk at rate 5.0.
  • Return on invested capital indicates that VZ generated 11 cents for every dollar invested in capital.
  • Interest coverage indicates that the company can make 5.17 times more earnings than VZ’s current interest payment.  

Interpretation

The asset turnover ratio shows that the company was not very efficient in generating sales from its assets. Moreover, the financial leverage means that the company is at risk at the rate of 5.0, the company uses more debt in its capital structure.

4. VZ INCOME AND MARKET

VZ INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Sales 127,079,000,000 131,620,000,000 125,980,000,000 126,034,000,000 130,863,000,000 131,087,000,000
EBIT 19,599,000,000 33,060,000,000 27,059,000,000 29,188,000,000 26,869,000,000 28,462,000,000
Net Income 9,625,000,000 17,879,000,000 13,127,000,000 30,101,000,000 15,528,000,000 15,839,000,000
Market Capitalization 194,369,000,000 188,262,000,000 217,611,000,000 215,925,000,000 232,303,000,000 246,491,000,000
Intrinsic Value 466,577,266,413 937,481,255,842 671,490,240,559 369,451,760,183 434,344,652,563 786,489,079,285

Facts:

  • Sales was $131 billion in 2019 trailing twelve months.
  • EBIT was $28.462 billion in 2019 trailing twelve months.
  • Net income was $15.839 billion in 2019 trailing twelve months.
  • Market capitalization was $246.491 billion in 2019 trailing twelve months.
  • Intrinsic value was $786.489 in 2019 trailing twelve months.

Explanation

  • The sales growth was 3 percent in the last five years. 
  • Sales was stable averaging $129 billion.
  • EBIT has grown 45 percent in the last five years and stable.
  • Net income has a growth of 65 percent in the last five years.
  • Net income represents 12 percent of total sales.
  • Market capitalization was erratic in movement in the last five years, and has grown 27 percent.
  • Intrinsic value has a growth of 68 percent.

Interpretation

VZ has not experienced negative bottomline in the last five years. In 2017 net income soared 129 percent from the previous year due to significant amount in provision for income tax. 

5. VZ TOTAL EXECUTIVE COMPENSATION

VZ TOTAL EXECUTIVE COMPENSATION

2014 2015 2016 2017 2018
44,450,000 47,770,000 47,540,000 60,470,000 102,859,957

Facts:

  • In 2014, the total executive compensation was $44.45 million.
  • In 2015, the total executive compensation was $47.77 million.
  • The total executive compensation in 2016 was $47.54 million.
  • The total executive compensation in 2017 was $60.47 million.
  • Total executive compensation in 2018 was $102.860 million.

Explanation

  • Lobbying in 2014 was 0.46 percent of the net income.
  • Lobbying expenses in 2015 was 0.27 percent of the net income.
  • While in 2016, lobbying was 0.36 percent of the net income.
  • In 2017 lobbying expenses was 0.20 percent of the net income.
  • Expenses in lobbying in 2018 represents 0.66 percent of the net income.

Interpretation

The lobbying expenses from 2014 to 2018 was less than one percent of the net income which is a very minimal amount of expenditure in lobbying.

5.a. VZ KEY EXECUTIVE COMPENSATION

VZ KEY EXECUTIVE COMPENSATION

2014 2015 2016 2017 2018
Total Key Executive Compensation 24,650,667 24,400,970 33,585,716 53,211,627 102,859,957
Hans Enk Vestberg, Chairman and CEO 0 0 0 9,817,419 22,206,086
Lowell C. Macadam, Former Chairman and CEO Former 18,306,509 18,343,660 17,937,581 17,937,581 18,637,867
Kumara Guru Gowrappan, EVP and CEO, Verizon Media Group 0 0 0 0 12,752,938
Timothy M. Armstrong, Former EVP, President and CEO – Oath 0 0 0 0 12,488,942
Matthew D. Ellis, EVP and CFO 0 0 2,697,359 5,649,368 7,060,676
John G. Straton, Former EVP and President, Global Operations 6,344,158 7,057,310 7,040,609 13,540,151 15,646,852
Marc C. Reed, EVP and Chief Administrative Officer 0 0 6,173,169 6,267,108 7,352,470
Ronan Dunnel, EVP and President, Verizon Consumer Group 0 0 0 0 6,714,126

Facts:

  • Total key executive compensation in 2018 was $103 million.
  • Chairman and CEO, Hans Erik Vestberg total compensation was $22,206,086 in 2018.
  • Former Chairman and CEO former, Lowell C. Macadam total compensation in 2018 was $18,637,867.
  • EVP and CEO. Verizon Media Group, Kumara Guru Gowrappan compensation in 2018 was $12,752,938.
  • Former EVP, President and CEO – Oath Timothy M. Armstrong total compensation was $12,488,942.
  • EVP and CFO Matthew D. Ellis total compensation was $7,060,676.
  • Former EVP and President, Global Operations John G. Straton total compensation was $15,646,852.
  • EVP and Chief Administrative Officer Marc C. Reed total compensation was $7,352,470.
  • EVP and President, Verizon Consumer Group Ronan Dunnel total compensation was $6,714,126.

Explanation

  • Total key executive compensation in 2018 was categorized into:
    • Salary $8,414,698
    • Bonus $2,999,998
    • Restricted stock award $61,046,184
    • Non-equity compensation $15,657,375
    • Other compensation $14,741,702
  • Hans Erik Vestberg total compensation represent 22 percent of the total key executive compensation in 2018.
  • Lowell C. Mcadam total compensation represent 18 percent of the total key executive compensation in 2018.
  • Kumara Guru Gowrappan total compensation represents 12.40 percent of the total key executive compensation in 2018.
  • Timothy M. Armstrong total compensation represents 12.14 percent of the total key executive compensation in 2018.
  • Matthew D. Ellis total compensation represents 7 percent of the total key executive compensation in 2018.
  • John G. Straton total compensation was 15 percent of the total key executive compensation in 2018.
  • Marc C. Reed total compensation represent 7 percent of the total key executive compensation in 2018.
  • Ronan Dunnel total compensation represents 6.5 percent of the total key executive compensation in 2018.

Interpretation

The total key executive compensation represents 0.66 percent or less one percent of the net income for 2018.

6. VZ LOBBYING

VERIZON LOBBYING

ANNUAL LOBBYING
1998 21,260,000 2009 17,680,000
1999 5,320,000 2010 16,850,000
2000 10,480,000 2011 15,690,000
2001 8,200,000 2012 15,020,000
2002 8,060,000 2013 13,510,000
2003 9,100,000 2014 12,900,000
2004 9,080,000 2015 11,430,000
2005 11,770,000 2016 10,080,000
2006 13,210,000 2017 12,230,000
2007 12,560,000 2018 12,060,000
2008 17,910,000 2019 5,008,000

Facts:

  • Annual lobbying in 1998 was $21,260,000.
  • Annual lobbying in 1999 was $5,320,000.
  • In the year 2000, annual lobbying was $10,480,000
  • In 2001, the annual lobbying was $8,200,000.
  • The 2002 annual lobbying was $8,060,000.
  • The 2003 annual lobbying was $9.1 million.
  • 2004 annual lobbying was $9.08 million.
  • 2005 annual lobbying was $11,770,000.
  • 2006 annual lobbying was $13,210,000.
  • 2007 annual lobbying was $12,560,000.
  • 2008 annual lobbying was $17,910,000.
  • 2009 annual lobbying was $17,680,000.
  • 2010 annual lobbying was $16,850,000.
  • 2011 annual lobbying was $15,690,000.
  • 2012 annual lobbying was $15,020,000.
  • 2013 annual lobbying was $13,510,000.
  • 2014 annual lobbying was $12,900,000.
  • 2015 annual lobbying was $11,430,000.
  • 2016 annual lobbying was $10,080,000.
  • 2017 annual lobbying was $12,230,000.
  • 2018 annual lobbying was $12,060,000
  • 2019 lobbying was $5,008,000.

Explanation:

The company is spending a yearly lobbying from 1998 to 2019.  A note from OpenSecret state that, all lobbying expenses report came from the Senate Office of Public Records. The data for the most recent years was downloaded on September 19, 2019.

6.a. VZ LOBBYING BY INDUSTRY

VZ LOBBYING BY INDUSTRY

Industry Total
Telephone Utilities 4,164,817
Internet 843,183
Total 5,008,000

Facts:

  • Total amount lobbied on telephone utility industries was $4,164,817 in 2018.
  • Total amount lobbied on Internet industries was $843,183 in 2018.

Explanation

  • Lobbied amount on telephone utility industries represents 83 percent of the total amount lobbied in 2018.
  • Lobbied amount on internet industries represents 17 percent of the total amount lobbied in 2018.

7. VZ FINANCIAL STRENGTH

VZ FINANCIAL STRENGTH

DATA:

Working capital $131,087,000,000
Total assets $264,829,000,000
Sales $131,087,000,000
EBIT $28,462,000,000
Market value of equity $253,909,000,000
Book value of total liabilities $211,684,000,000
Retained earnings $43,542,000,000

CALCULATION

 

Ratio Score Result
A – Working Capital / Total Assets 0.49 1.20 0.59
B – Retained Earnings / Total Assets 0.16 1.40 0.23
C – EBIT / Total Assets 0.11 3.30 0.35
D – Market Value of Equity / Book Value of Total Liabilities 1.20 0.60 0.72
E – Sales / Total Assets 0.49 1.0 0.49
Z-Score 2.39

 

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

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

Interpretation

The calculated Z-Score for Verizon Communications Inc was 2.39. According to Dr. Edward Altman that a grading scale of 1.8 to 3 indicates that the company will likely declare bankruptcy. 

Let us go back to the balance sheet analysis, it shows that current liabilities is greater than the current assets which indicates that the company’s current resources were not enough to meet its current obligations on time even all receivables are collected and inventories have been monetized. Financial leverage above also indicates that the company is at risk at the ratio of 5.0.

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

 

CITATION

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

https://www.verizon.com/about/

https://www.opensecrets.org/lobby/clientsum.php?id=D000000079&year=2019

Researched and written by Criselda

PayPal Holdings Inc (PYPL) Extended Graph Analysis

October 14th, 2019 Posted by Extended Analysis No Comment yet

PayPal is a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. They provide online payment system that serves customers worldwide through their Payments Platform. 

PayPal2

PayPal is available globally in more than 200 markets with its PayPal platform, including Braintree, Venmo and Xoom, enables their consumers to receive money in more than 100 currencies, withdraw funds in 56 currencies and hold balances in their PayPal accounts in 25 currencies.

About PayPal

PayPal Holdings, Inc was incorporated in Delaware in January 2015 and was established in 1998. The company’s initial public offering was in February 2002, the offering was for $5.4 million shares at $13 per share, registered under Nasdaq with a ticker symbol PYPL. The valuation of PYPL was about $800 million during that time.  At the launch date the price per share closes at $20. It became a wholly owned subsidiary of eBay in 2015 and it was purchased at the amount of $1.5 billion.  

Founders:

  • Elon Musk
  • Peter Thiel
  • Yu Pan
  • Max Levchin
  • Ken Howery
  • Luke Nosek

Corporate Headquarters:

2211 North First Street

San Jose, California 95131

Worldwide Operations:

12312 Port Grace Boulevard

La Vista, Nebraska 68128

Subsidiaries:

  • Venmo
  • Xoom Corporation
  • Braintree
  • Tradera
  • Simility
  • Swift Financial LLC
  • iZettle
  • PayPal Singapore Private Ltd
  • Paydiant
  • Paypal Argentina SRL
  • And many more

PayPal Standard Graph Analysis

1. PYPL CASH FLOWS

CASH FLOWS PYPL(1)

2014 2015 2016 2017 2018 2019
Net cash provided by operating activities 2,220,000,000 2,546,000,000 3,158,000,000 2,531,000,000 5,483,000,000 8,005,000,000
Net cash used for investing activities -1,546,000,000 -6,389,000,000 -4,999,000,000 -5,358,000,000 840,000,000 -5,680,000,000
Net cash provided by (used for) financing activities -51,000,000 3,079,000,000 2,038,000,000 4,084,000,000 -1,262,000,000 1,778,000,000
Capital expenditure -492,000,000 -722,000,000 -669,000,000 -667,000,000 -823,000,000 -804,000,000
Free cash flow 1,728,000,000 1,824,000,000 2,489,000,000 1,864,000,000 4,660,000,000 7,201,000,000

Facts:

  • The net cash provided by operating activities was $8 billion in 2019 trailing twelve months.
  • Net cash used for investing activities was -$5.68 billion in 2019 trailing twelve months.
  • Net cash provided by (used for) financing activities was $1.78 billion in 2019 trailing twelve months.
  • Capital expenditure was -$804 million in 2019 trailing twelve months.
  • Free cash flow was $7.201 billion in 2019 trailing twelve months.

Explanation:

  • Net cash provided by operating activities had a growth of 261 percent in five years.
  • Net cash used for investing activities composed of sales/maturity of investment, purchases of investments, investment in property and equipment and acquisition and disposition.
  • There was repurchased of treasury stock in a significant amount at the net cash provided by (used for) financing activities.
  • Capital expenditure was the purchase of property and equipment.
  • Free cash flow has a growth of 317 percent in the last five years. 
  • Operating cash flow increased 46 percent which contributed to 55 percent increase in free cash flows from 2018 to the trailing twelve months.
  • There was a cash payment of $324 million for income taxes at the trailing twelve months.
  • Cash paid for interest was $88 million in the trailing twelve months.

Interpretation

PayPal was efficient in maintaining cash for the operation of the business year-over-year. The company is liquid in the last five years.

2. PYPL BALANCE SHEET

PYPL BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total Cash 2,201,000,000 1,393,000,000 1,590,000,000 2,883,000,000 7,575,000,000 7,575,000,000
Total current assets 17,189,000,000 20,323,000,000 23,054,000,000 31,081,000,000 31,453,000,000 31,453,000,000
Total assets 21,917,000,000 28,881,000,000 33,103,000,000 40,774,000,000 43,332,000,000 43,332,000,000
Total current liabilities 13,312,000,000 13,649,000,000 16,942,000,000 22,946,000,000 25,965,000,000 25,965,000,000
Total liabilities 13,669,000,000 15,122,000,000 18,391,000,000 24,780,000,000 27,946,000,000 27,946,000,000
Equity 8,248,000,000 13,759,000,000 14,712,000,000 15,994,000,000 15,386,000,000 15,386,000,000
Retained earnings 0 668,000,000 2,069,000,000 3,823,000,000 5,880,000,000 5,880,000,000
Total Debt 1,479,000,000 0 0 1,000,000,000 1,998,000,000 1,998,000,000
Working Capital 4,282,000,000 7,031,000,000 8,855,000,000 9,782,000,000 7,059,000,000 7,059,000,000

Facts:

  • Total cash was $7.575 billion in 2018.
  • The total current assets was $31.453 billion in 2018.
  • The total assets was $43.332 billion in 2018.
  • Current liabilities was $25.965 billion in 2018.
  • Total liabilities was $27.946 billion in 2018.
  • The total stockholders equity was $15.386 billion in 2018.
  • Retained earnings was $5.880 billion in 2018.
  • Total debt was $1.998 in 2018.
  • Working capital was $7.059 billion in 2018.

Explanation

  • Total cash represents 17 percent of total assets.
  • Current assets represents 73 percent of the total assets.
  • Total assets has growth of 98 percent in five years.
  • Current liabilities represents 93 percent of total liabilities.
  • Total liabilities represents 64 percent of the total liabilities and stockholders equity.
  • Equity represent 36 percent of the total liabilities and stockholders equity.
  • Equity has grown 87 percent in five years.
  • Retained earnings represent 38 percent of equity.
  • Total debt was 7 percent of total liabilities.
  • Working capital grown 65 percent in five years

Interpretation

The company is liquid and is able to meet its short-term obligations using its current assets in due time. Moreover, PayPal is capable of paying its total liabilities using its total current assets.The company is solid and healthy.

3. PYPL FINANCIAL RATIOS

PYPL FINANCIAL RATIOS (1)

2014 2015 2016 2017 2018 2019
Asset Turnover (avg) 0.39 0.36 0.35 0.35 0.37 0.36
Return on Asset (ROA) % 2.04 4.83 4.52 4.86 4.89 5.57
Return on Equity (ROE) % 5.36 11.16 9.84 11.69 13.11 16.11
Financial Leverage (avg) 2.66 2.10 2.25 2.55 2.82 3.00
Return on Invested Capital % 4.47 11.16 9.84 10.98 11.51 13.50
Interest Coverage 31.86 32.64

Facts:

  • Asset turnover ratio was averaging 0.36 in 2019 trailing twelve months.
  • Return on Asset (ROA) was 5.57 in 2019 trailing twelve months.
  • Return on Equity (ROE) was 16.11 in the trailing twelve months.
  • Financial leverage was averaging 3.00 in the trailing twelve months.
  • Return on invested capital was 13.50 percent in the trailing twelve months.
  • Interest coverage was 32.64 in the trailing twelve months.

Explanation:

  • Asset turnover has a ratio of 0.36, which means that for every dollar in assets PayPal had generated 36 cents. It indicates that the company is not very efficient in using its assets.
  • The company has generally good return on assets. It indicates that for every dollar invested in assets it returns $0.056.
  • Return on equity shows that the company generated $0.16 of profit for every dollar of shareholders equity.
  • Financial leverage indicates that for every dollar of equity the company had $3 in total assets.
  • Return on invested capital indicates it yielded a return of 13.50 percent.
  • Interest coverage indicates that the company is making 32.64 times more earnings that the current interest payments. PayPal is capable of paying interest on the current debt together with its principal.

Interpretation

The financial ratios of PayPal is generally considered good. The company is capable of paying its debts in due period. PayPal is profitable.

 

4. INCOME AND MARKET

PYPL INCOME AND MARKET (1)

2014 2015 2016 2017 2018 2019
Sales 8,025,000,000 9,248,000,000 10,842,000,000 13,094,000,000 15,451,000,000 16,342,000,000
EBIT 5,139,000,000 6,148,000,000 7,287,000,000 9,053,000,000 10,840,000,000 11,425,000,000
Net Income 419,000,000 1,228,000,000 1,401,000,000 1,795,000,000 2,057,000,000 2,510,000,000
Market Capitalization 0 44,240,000,000 47,626,000,000 88,485,000,000 98,722,000,000 121,892,000,000
Intrinsic Value 0 0 62,390,247,604 84,693,420,726 93,632,594,216 164,111,456,295

Facts:

  • Total sales was $16.3 billion in 2019 trailing twelve months.
  • EBIT was $11.4 billion in 2019 trailing twelve months.
  • Net income was $2.5 billion in 2019 trailing twelve months.
  • Market capitalization was $121.892 billion in 2019 trailing twelve months.
  • Intrinsic value was $164 billion in 2019 trailing twelve months.

Explanation:

  • Sales has grown 104 percent in five years.
  • Sales increases year-over-year at an average rate of 15 percent.
  • EBIT has grown 122 percent in five years.
  • Net income has a growth of 499 percent in five years.
  • Net income increases year-over-year at an average rate of 54 percent.
  • Market capitalization had increased 176 percent in five years.
  • Intrinsic value soared 924 percent in four years.
  • Intrinsic value was higher by 35 percent than the market value.

Interpretation

PayPal Holdings Inc was profitable and the bottomline was impressive and increases year-over-year.

5. KEY EXECUTIVE COMPENSATION

PYPL TOTAL EXECUTIVE COMPENSATION

DATA:

2014 81,170,000
2015 64,220,000
2016 46,240,000
2017 68,010,000
2018 74,741,987

Facts:

  • 2014 total executive compensation was $81.170 million.
  • 2015 total executive compensation was $64.220 million.
  • 2016 total executive compensation was $46.240 million.
  • 2017 total executive compensation was $68.010 million.
  • 2018 total executive compensation was $74.742 million.

Explanation:

  • 2014 total executive compensation represents 19.37 percent of net income.
  • 2015 total executive compensation represents 5.23 percent of net income.
  • 2016 total executive compensation represents 3.30 percent of net income.
  • 2017 total executive compensation represents 3.79 percent of net income.
  • 2018 total executive compensation represents 3.63 percent of net income.

Interpretation

Total executive compensation in 2018 increased by 9.89 percent from 2017.

PYPL Key Executive Compensation

2014 2015 2016 2017 2018
Key Executive Compensation 70,066,841 39,175,128 40,764,728 68,013,476 74,741,987
Daniel H Schulman, President and CEO 38,687,906 14,444,491 18,934,341 19,218,634 37,764,588
John D. Rainey/CFO and EVP, Global Customer Operation 0 10,682,546 9,934,708 8,631,687 9,524,190
William J. Ready, EVP and COO 31,378,935 2,558,955 6,158,155 26,188,353 9,524,190
Louise Pentland, EVP, Chief Business Affairs and Legal Officer 0 11,489,136 5,737,524 6,574,969 9,516,978
Gary Marino, Former EVP and Chief Commercial Officer 0 0 0 7,399,833 8,412,041

Facts:

  • Total key executive compensation was $74.74 million in 2018.
  • Daniel H. Schulman, President and CEO compensation was $37.76 million in 2018.
  • David D. Reiney, CFO compensation was $9.52 million in 2018.
  • William J. Reidey, EVP and COO compensation was $9.52 million in 2018.
  • Louise Pentland, EVP Chief Business Affairs and Legal Officer compensation was $9.52 million in 2018.
  • Gary Marino, former EVP and Chief Commercial Officer compensation was $8.4 million in 2018.

Explanation

  • The total key executive compensation represents 3 percent of net income in 2018.
  • Daniel H. Schulman total compensation represent 51 percent of the total key executive compensation in 2018.
  • David D. Reiney total compensation represent 13 percent of the total key executive compensation.
  • William Reidey total compensation represent 13 percent of the total key executive compensation.
  • Louise Pentland total compensation represent 13 percent of the total key executive compensation in 2018.
  • Gary Marino total compensation represent 11 percent of the total key executive compensation in 2018.

Interpretation

PayPal’s highest paid executive was Daniel H. Schulman, President and CEO with 51 percent of the total key executive compensation.

6. LOBBYING AND CONTRIBUTIONS

PYPL LOBBING AND CONTRIBUTIONS

2001 2002 2003 2015 2016 2017 2018 2019
80,000 515,000 60,000 380,000 958,460 887,850 819,800 432,210

Facts:

  • Lobbying in 2001 was $80k.
  • Lobbying in 2002 was $515k.
  • The lobbying in 2003 was $60k.
  • In 2015, the lobbying was $380k.
  • In 2016, the lobbying was $958.46k.
  • The lobbying in 2017 was $887.85k.
  • 2018 lobbying was $819.80 million.
  • 2019 lobbying was $432.21 million.

Explanation

PayPal is incurring a lobbying expenses since 2001, and it was not reported in the financial statement. The lobbying expenses come from the Senate Office of Public Records. The data for the most recent years was downloaded on September 19, 2019.

 

7. FINANCIAL STRENGTH

PYPL FINANCIAL STRENGTH (1)

DATA

Working Capital $7,059,000,000
Total Assets $43,332,000,000
Sales $16,342,000,000
EBIT $11,425,000,000
Market value of equity $119,527,000,000
Book value of total liabilities $27,946,000,000
Retained earnings $5,880,000,000


CALCULATION

RATIO SCORE RESULT
A Working Capital/Total Assets 0.16 1.20 0.20
B Retained Earnings/Total Assets 0.14 1.40 0.19
C EBIT/Total Assets 0.26 3.30 0.87
D Market value of equity/Book value of total assets 0.55 0.60 2.57
E Sales/Total Assets 0.38 1.00 0.38
Z-Score 4.20

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

Explanation

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

Interpretation

The overall Z-Score was 4.20, the grading scale for 3.00+ according to Altman indicates that the company will not declare bankruptcy. This measurement is not calculated for the purpose of estimating the company will declare bankruptcy but it helps in comparing other companies that have become insolvent.

CONCLUSION

The cash flows indicates that the company is liquid and the management is efficient in providing cash for the normal operation of the business. Moreover, the balance sheet is stable and income statement shows that PayPal is profitable and has not seen negative bottom line in the last five years. Therefore, the stock of PayPal is good for a Buy.

CITATION

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

https://investor.paypal-corp.com/investor-relations

https://www.morningstar.com/stocks/xnas/pypl/quote
Researched and written by Criselda

Twitter: criseldarome

 

STARBUCKS CORP (SBUX) Extended Graph Analysis

October 8th, 2019 Posted by Extended Analysis No Comment yet

SBUX

COMPANY PROFILE

Starbucks Corp began in 1971. The company started in one store in Seattle’s Pike Market Place as a roaster and retailer of whole bean and ground coffee, tea, and spices. The business expanded globally and has millions of daily customers with exceptional products and more than 30,000 retail stores in 80 markets as of June 30, 2019.

Quoted from the company’s website: “ Starbucks is named after the first mate in Herman Melville’s Moby Dick. Their logo is also inspired by the sea, featuring a twin-tailed siren from Greek mythology.

The company’s mission: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

The company believed in serving the best coffee possible and its their goal that all their coffee to be grown in the highest standard of quality, using ethical sourcing practices.

 

STARBUCKS STANDARD GRAPH ANALYSIS 

1. SBUX CASH FLOWS

CASH FLOWS

 

2014-09 2015-09 2016-09 2017-09 2018-09 TTM
Net cash provided by operating activities 507,800,000 3,749,100,000 4,575,100,000 4,174,300,000 11,937,800,000 12,372,200,000
Net cash used for investing activities -817,700,000 -1,520,300,000 -2,222,900,000 -850,000,000 -2,361,500,000 -1,171,300,000
Net cash provided by (used for) financing activities -623,300,000 -2,256,500,000 -1,750,000,000 -3,001,600,000 -3,242,800,000 -8,297,900,000
Capital expenditure -1,160,900,000 -1,303,700,000 -1,440,300,000 -1,519,400,000 -1,976,400,000 -1,849,300,000
Free cash flow -553,100,000 2,445,400,000 3,134,800,000 2,654,900,000 9,961,400,000 10,522,900,000


Facts:

  • Net cash provided by operating activities was $12,372,200,000 in the trailing twelve months.
  • Net cash used for investing activities was -$1,171,300,000 in the trailing twelve months.
  • Net cash provided by (used for) financing activities was -$8,297,900,000 in the trailing twelve months.
  • Capital expenditure was -$1,849,300,000 in the trailing twelve months.
  • Free cash flows was $10,522,900,000 in the trailing twelve months.

Explanation

  • The company has managed to produce sufficient net cash provided by operating activities in the last five years. Year-over-year cash from operation increases, shows that the management was efficient in running the business.
  • Net cash used for investing activities consist of investment in properties and purchases of investments.
  • In cash flows from financing activities there was a debt issued in significant amount, and the company had repurchase common stock at $11 billion.
  • Capital expenditure consist of investment in property, plant and equipment.
  • Free cash flow increased 330 percent from 2015 to the trailing twelve months.

Interpretation

The company was efficient in providing sufficient cash from the operation and the cash increases year-over-year in the last five years. Further, Starbucks has enough cash for investing in property, plant and equipment, acquisition and purchases. 

2. SBUX BALANCE SHEET

BALANCE SHEET (1)

2014-09 2015-09 2016-09 2017-09 2018-09 2019-09
Total Cash 1,843,800,000 1,611,400,000 2,263,200,000 2,690,900,000 8,937,800,000 8,937,800,000
Total current assets 4,168,700,000 4,352,700,000 4,760,500,000 5,283,400,000 12,494,200,000 12,494,200,000
Total assets 10,752,900,000 12,446,100,000 14,329,500,000 14,365,600,000 24,156,400,000 24,156,400,000
Total current liabilities 3,038,700,000 3,653,500,000 4,546,900,000 4,220,700,000 5,684,200,000 5,684,200,000
Total liabilities 5,480,900,000 6,628,100,000 8,445,500,000 8,915,500,000 22,986,900,000 22,986,900,000
Equity 5,272,000,000 5,818,000,000 5,884,000,000 5,450,100,000 1,169,500,000 1,169,500,000
Retained earnings 5,206,600,000 5,974,800,000 5,949,800,000 5,563,200,000 1,457,400,000 1,457,400,000
Total Debt 2,048,300,000 2,347,500,000 3,202,600,000 3,932,600,000 9,440,100,000 9,440,100,000
Working Capital 1,130,000,000 699,000,000 213,000,000 1,063,000,000 6,810,000,000 6,810,000,000

Facts: 

  • Total cash was $8.9 billion in 2018 and the trailing twelve months.
  • Total current assets was $12.49 billion in 2018 and the trailing twelve months.
  • Total assets was $24.16 billion in 2018 and the trailing twelve months.
  • Total current liabilities was $5.68 billion in 2018 and the trailing twelve months.
  • Total liabilities was $22.99 billion in 2018 and the trailing twelve months.
  • Equity was $1.17 billion in 2018 and the trailing twelve months.
  • Retained earnings was $1.46 billion in 2018 and the trailing twelve months.
  • Total debt was $9.44 billion in 2018 and the trailing twelve months.
  • Working capital was $6.8 billion in 2018 and the trailing twelve months.

Explanation

  • Total cash has a growth of 385 percent in five years
  • Total current assets has a growth of 200 percent in five years.
  • Total assets has a growth of 125 percent in five years.
  • Total current liabilities represent 25 percent of total liabilities.
  • Total liabilities represent 95 percent of total liabilities and stockholders equity. 
  • Equity has a negative growth of 78 percent in five years.
  • Retained earnings has a negative growth of 72 percent in 5 years.
  • Total debt had increased 361 percent in five years.
  • Working capital had increased 503 percent in five years and it represents 41 percent of total liabilities.

Interpretation

Starbucks has a strong balance sheet and is liquid. Its total cash alone is sufficient in paying its current liabilities. However, the balance sheet shows that Starbucks is highly leveraged at 95 percent. The company is using debt in financing its growth which is very dangerous and might lead to bankruptcy in the future.

3. SBUX FINANCIAL RATIOS

FINANCIAL RATIOS

2014 2015 2016 2017 2018 TTM
Asset Turnover (avg) 1.48 1.65 1.59 1.56 1.28 1.37
Return on Asset (ROA) 18.57 23.77 21.05 20.11 23.46 18.66
Return on Equity (ROE) 42.41 49.73 48.16 50.90 136.51 136.51
Financial Leverage (avg) 2.04 2.14 2.44 2.64 20.66 20.66
Return on Invested Capital % 30.79 35.86 31.02 29.92 44.26 44.26
Interest Coverage 50.29 56.36 52.64 47.68 34.94 15.69


Facts:

  • Asset Turnover was averaging 1.37 in the trailing twelve months.
  • Return on assets was 18.66 percent in the trailing twelve months.
  • Return on equity was 136.51 percent in the trailing twelve months.
  • Financial leverage was average 20.66 ratio in the trailing twelve months.
  • Return on invested capital was 44.26 percent in the trailing twelve months.
  • Interest coverage was 15.69 ratio in the trailing twelve months.

Explanation

  • Asset turnover ratio indicates that for every dollar in asset, it generated $1.37 in sales.
  • Return on assets tells us that every dollar that is invested in asset produced 19 cents of income.
  • Return on equity shows that for every dollar invested in equity, it produced $1.37 income. ROE jumps 136 percent from 2017 to 2018.
  • Financial leverage tells us that for every dollar in equity, the firm has $20.66 of total assets. The ratio soared up to 683 percent from 2017 to 2018.
  • The company is generating a 44 percent return on invested capital.
  • Interest coverage tells us that the company is making more than enough money to pay its interest obligation with extra earnings left to pay for the principal. 

Interpretation

The financial ratio of Starbucks were impressive, however, return on equity soared 136 percent due to decreased in equity by 79 percent during the same period. Another thing is, the financial leverage is too high which indicates that the operation of the business start to get risky. The company is operating its business in a borrowed funds, which means the creditors has more stakes than the investors. 

4. INCOME AND MARKET

SBUX INCOME AND MARKET

2014-09 2015-09 2016-09 2017-09 2018-09 TTM
Sales 16,447,800,000 19,162,700,000 21,315,900,000 22,386,800,000 24,719,500,000 26,065,200,000
EBIT 2,792,600,000 3,351,100,000 3,853,700,000 3,896,800,000 3,806,500,000 3,826,300,000
Net Income 2,068,100,000 2,757,400,000 2,817,700,000 2,884,700,000 4,518,300,000 3,551,900,000
Market Capitalization 61,570,000,000 89,181,000,000 80,899,000,000 81,094,000,000 80,069,000,000 105,839,000,000
Intrinsic Value 88,446,601,523 99,655,021,787 87,118,974,412 89,719,054,322 185,689,850,736 185,689,850,736


Facts:

  • Sales was $26 billion in the trailing twelve months.
  • EBIT was $3.8 billion in the trailing twelve months.
  • Net income was $3.55 billion in the trailing twelve months.
  • Market capitalization was $105.839 billion in the trailing twelve months.
  • Intrinsic value was $185.69 billion 2018.

Explanation

  • The sales increases year-over-year in the past five years and has a growth of 58 percent..
  • EBIT was stable and has a growth of 37 percent in five years.
  • Net income growth was 72 percent in five years.
  • Market capitalization  growth was 72 percent in five years.
  • Intrinsic value increased 110 percent from 2014 to 2018. 

Explanation

The earnings of the company is running smoothly from top to bottom in five years, the current true value soared impressively in the last five years.

 

5. KEY EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

2014 2015 2016 2017 2018
Key Executive Compensation 37,652,142 40,913,970 47,469,559 45,955,484 70,184,613
Kevin R. Johnson/President and Chief Executive Officer, Financial Officer 0 8,474,173 11,057,912 11,480,364 13,382,480
Scott H. Maw/Former Executive VP and CFO 2,215,390 3,654,372 4,385,431 5,761,602 5,980,769
Howard Schultz/Former Executive Chairman of the Board 21,466,454 20,091,353 21,815,498 17,980,890 30,181,610
Rosalind G. Brewere/Group President, Americas and COO 0 0 0 0 9,152,082
John Culver/Group President, International Channel Development and Global Coffee and Tea 6,332,919 3,836,988 5,244,124 5,366,864 5,907,186
Clifford Burrows/Group President, Siren Retail 7,637,379 4,857,084 4,966,594 5,365,764 5,580,486

Facts

  • The total key executive compensation in 2018 was $70.18 million.
  • Kevin R. Johnson, CEO and Financial Officer compensation was $13.38 million in 2018.
  • Scott H Maw, former EVP and CEO compensation in 2018 was $5.981 million.
  • Howard Schultz, former Executive Chairman of the Board compensation was $30.18 million in 2018.
  • Rosalind Brewer, Group President Americas and COO compensation was $9.15 million in 2018.
  • John Calver, Group President International Channel Development and Global Coffee and Tea compensation was $5.91 million in 2018.
  • Clifford Burrows, Group President Siren Retail compensation was $5.58 million in 2018.

Explanation

  • The key executive compensation is composed of the following breakdown:
    • Salary $4.873 million
    • Bonus                                     $0.334 million
    • Restricted Stock Award        $30.959 million
    • Securities option                  $28.364 million
    • Non-equity compensation    $ 5.031 million
    • Other compensation            $ 0.623 million
  • Kevin R. Johnson compensation represent 19 percent of the total key executive compensation in 2018.
  • Scott H Maw compensation represent 8.5 percent of the total key executive compensation in 2018.
  • Howard Schultz compensation represent 43 percent of the total key executive compensation.
  • Rosalind Brewer compensation represent 43 percent of the total key executive compensation in 2018.
  • John Calver compensation represent 8.42 percent of the total key executive compensation in 2018.
  • Clifford Burrows compensation represent 8 percent of the total key executive compensation.

Interpretation

The total key executive compensation represent 1.55 percent of the net income. Salary has only 7 percent of the total executive compensation, restricted stock award and securities options have a big chunk of the total compensation.

6. LOBBYING AND CONTRIBUTIONS

STARBUCKS LOBBYING AND CONTRIBUTIONS

2004 2005 2006 2007 2008 2009 2010 2011
120,000 200,000 280,000 390,000 638,000 530,000 730,000 580,000

 

2012 2013 2014 2015 2016 2017 2018 2019
490,000 2,190,000 460,000 780,000 810,000 990,000 1,060,000 510,000

Facts:

  • Lobbying in 2004 amounted to $120k.
  • Lobbying in 2005 amounted to $200k.
  • 2006 lobbying amounted to $280k.
  • 2007 lobbying amounted to $390k.
  • 2008 lobbying amounted to $638k.
  • 2009 lobbying amounted to $530k.
  • 2010 lobbying amounted to $730k.
  • 2011 lobbying amounted to $580k.
  • 2012 lobbying amounted to $490k.
  • 2013 lobbying amounted to $2,190M.
  • 2014 lobbying amounted to $460k
  • 2015 lobbying amounted to $780k.
  • 2016 lobbying amounted to $810k.
  • 2017 lobbying amounted to $990k.
  • 2018 lobbying amounted to $1,060M.
  • 2019 lobbying amounted to $510k.

Explanation

Starbucks is incurring a yearly lobbying and contributions since 1998. The lobbying expenses come from the Senate Office of Public Records. The data for the most recent years was downloaded on September 19, 2019.

7. FINANCIAL STRENGTH

FINANCIAL STRENGTH

DATA:

Working Capital $6,810,000,000
Total Assets $24,156,400,000
Sales $26,065,200,000
EBIT $2,826,300,000
Market value of equity $105,839,000,000
Book value of total liabilities $22,986,900,000
Retained Earnings $1,457,400,000


CALCULATION

RATIO SCORE Z-SCORE
A Working Capital/Total Assets  0.28 1.2 0.336
B Retained Earnings/Total Assets 0.06 1.4 0.084
C EBIT/Total Assets 0.12 3.3 0.396
D Market value of equity/Book value of total assets 4.6 0.60 2.76
E Sales/Total Assets 1.08 1.00 1.08
Z-Score 4.656

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

Explanation

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

Interpretation

The overall score was 4.656, the grading scale for the score 3 and above indicates the company will not declare bankruptcy, in other words, Starbucks is not close to bankruptcy and the business is doing well with its operation.

Conclusion

The company has a strong balance sheet and is liquid. Profitability shows that the company produces earnings sufficient for the operation. Starbucks is good in handling and in using the borrowed funds in the operation of the business. However, the stock of Starbucks Corp is not recommended for a Buy due to its high level of total liabilities than the investors equity which can be a very risky operation.

Citation

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

https://www.opensecrets.org/orgs/lobby.php?id=D000037780

Researched and written by Criselda

Twitter: criseldarome 

 

Twitter Inc (TWTR) Extended Graph Analysis

May 30th, 2019 Posted by Extended Analysis No Comment yet

Twitter Inc (TWTR) is one of the most favored social networking services in the world. Founded by Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams in 2006.

TWTR logo

About the Company

 

Company Profile

Twitter is an American online news and social networking service on which users post and interact with messages known as “tweets”. Tweets were originally restricted to 140 characters, but on November 7, 2017, this limit was doubled to 280 for all languages except Chinese, Japanese, and Korean. Wikipedia

Founded on March 21, 2006, at San Francisco, CA. The founders are Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams.

 

Twitter Extended Graph Analysis

 

A) TWITTER CASH FLOW

CASH FLOW

Net cash flow provided by operating activites Net cash used for investing activities Net cash provided by (used for) financing activities Capital expenditures Free cash flows
2014 81,796,000 -1,097,272,000 1,691,722,000 -201,630,000 -119,834,000
2015 383,066,000 -902,421,000 -62,998,000 -347,280,000 36,786,000
2016 763,055,000 -598,008,000 -83,975,000 -218,657,000 544,398,000
2017 831,209,000 -112,932,000 -78,373,000 -160,742,000 670,467,000
2018 1,339,711,000 -2,055,513,000 978,116,000 -483,934,000 855,777,000
TTM 1,448,731,000 -1,767,075,000 978,051,000 -473,869,000 974,862,000

Facts

  • Net cash flow provided by operating activities were $1.34 billion and $1.45 billion in 2018 and the trailing twelve months (TTM), respectively.
  • Net cash used for investing activities was -$2.06 billion and -$1.77 billion in 2018 and the trailing twelve months respectively.
  • The net cash provided by (used for) financing activities were $978 million and $978 million in 2018 and the trailing twelve months respectively.
  • While the capital expenditures were -$484 million and -$474 million in 2018 and the trailing twelve months respectively.
  • On the other hand, the free cash flows were $856 million and $975 million in 2018 and the trailing twelve months respectively.

Explanation

  • The net cash flow had increased by 61 and 8 percent from 2017 to 2018 and the trailing twelve months due to the huge increase in net income at 1216 percent.
  • Net cash used for investing activities increased by 1720 percent from 2017 to 2018 due to the increase in purchases of investment.
  • There was a debt issued of $1.15 billion in 2018 which impacted the net cash provided by (used for) financing activities and shows a positive result.
  • On the other hand, capital expenditures are an investment in properties, plant, and equipment.
  • While free cash flows are increasing year-over-year and show a growth of 112 percent in the last five years.

Interpretation

Free cash flows exclude the non-cash expenses and include expenses from equipment and assets and changes in working capital. The company’s free cash flow was impressive as year-over-year it increases. Moreover, Twitter is liquid and its free cash flows represent 73 percent of the net income.

B) TWITTER BALANCE SHEET

Twitter

2014 2015 2016 2017 2018
Total cash 3,621,878,000 3,495,348,000 3,774,579,000 4,403,102,000 6,209,401,000
Current Assets 4,255,853,000 4,381,792,000 4,652,196,000 5,321,884,000 7,111,036,000
Total assets 5,583,082,000 6,442,439,000 6,870,365,000 7,412,477,000 10,162,572,000
Current liabilities 393,794,000 506,039,000 584,021,000 583,278,000 1,516,311,000
Total liabilities 1,956,679,000 2,074,392,000 2,265,430,000 2,365,259,000 3,356,978,000
Equity 3,646,403,000 4,368,047,000 4,604,935,000 5,047,218,000 6,805,594,000
Retained earnings -1,572,446,000 -2,093,477,000 -2,550,350,000 -2,671,729,000 -1,454,073,000
Total debts 1,376,020,000 1,455,095,000 1,538,967,000 1,627,460,000 2,628,250,000
Working capital 3,862,000,000 3,876,000,000 4,068,000,000 4,739,000,000 5,595,000,000

Facts:

  • Total cash was $6.21 billion in 2018.
  • The current assets were $7.12 billion in 2018.
  • Total assets were $10.16 billion in 2018.
  • Current liabilities were $1.52 billion in 2018.
  • Total liabilities were $3.36 billion in 2018.
  • Total equity was $6.8 billion in 2018.
  • Retained earnings were -$1.45 billion in 2018.
  • Total debts were $2.6 billion in 2018.
  • Working capital was $5.6 billion in 2018.

Explanation

  • Total cash increases year-over-year from 2015 to 2018 and has a growth of 42 percent in five years.
  • Current assets increase year-over-year in the last five years and have a growth of 40 percent.
  • Total assets increase year-over-year in the last five years and have a growth of 45 percent.
  • Current liabilities increase year-over-year in the last five years at a rate of 74 percent.
  • Total liabilities increase year-over-year in the last five years at a rate of 42 percent.
  • Total equity increases year-over-year in the last five years at a rate of 46 percent due to additional paid-in capital.
  • Retained earnings were negative in the last five years due to net income losses from 2014 to 2017. In 2018 and the trailing twelve months net income shows positive results and increase 109 and 10 percent from 2017 to 2018 and the trailing twelve months.
  • Total debts increased 48 percent from 2014 to 2018.
  • Working capital has a growth of 31 percent in five years and increasing year-over-year.

Interpretation

The balance sheet represents the company’s financial status at a certain period of time. Twitter has a strong balance sheet, it has sufficient funds and able to handle its liabilities. In other words, Twitter is liquid.

C) TWITTER FINANCIAL RATIOS

Twitter

2011 2012 2013 2014 2015 2016 2017 2018 TTM
Asset turnover (average) 0.15 0.41 0.32 0.31 0.37 0.38 0.34 0.35 0.34
Return on assets % -22.77 -10.23 -30.75 -12.91 -8.67 -6.86 -1.51 13.72 14.29
Financial leverage (average) 0.00 0.00 1.14 1.54 1.47 1.49 1.47 1.49 1.57
Return on equity % 0.00 0.00 -47.77 -17.57 -13.03 -10.19 -2.24 20.34 21.72
Return on invested capital % 0.00 0.00 -42.82 -13.79 -7.59 -6.19 0.17 15.48 15.92
Interest coverage 0.00 0.00 0.00 0.00 -4.43 -3.41 0.09 4.19 4.19

Facts:

  • The asset turnover (average) was 0.34 ratio in the trailing twelve months.
  • Return on assets was 14.29 percent in the trailing twelve months.
  • Financial leverage (average) was 1.57 ratio in the trailing twelve months.
  • Return on equity was 21.72 percent in the trailing twelve months.
  • While return on invested capital was 15.92 percent in the trailing twelve months.
  • The interest coverage was 4.19 ratio in the trailing twelve months.

Explanation

  • Asset turnover ratio means that each dollar of assets generates an average of $0.34 in the trailing twelve months.
  • Return on assets indicates that for every dollar that was invested in assets produced $0.137 in 2018.
  • Financial leverage indicates that the liabilities are 157 percent of the stockholder’s equity.
  • Return on equity indicates that every dollar of common shareholders equity earned $0.2172 return on their investment in 2018.
  • Return on invested capital indicates that every dollar invested in capital produces a $0.1592 return in 2018.
  • Interest coverage measures the company’s ability to make interest payments on its debt in time. Twitter is able to make 4.19 times more earnings than his current interest payments.

Interpretation

Twitter is liquid and was able to make an acceptable return on investments made.

D) INCOME AND MARKET

Twitter

2014 2015 2016 2017 2018 YTD
Revenue 1,403,002,000 2,218,032,000 2,529,619,000 2,443,299,000 3,042,359,000 3,164,378,000
EBIT -538,866,000 -450,036,000 -367,208,000 38,740,000 453,325,000 472,058,000
Net Income -577,820,000 -521,031,000 -456,873,000 -108,063,000 1,205,596,000 1,335,403,000
Market Capitalization 23,042,000,000 16,062,000,000 11,653,000,000 17,834,000,000 21,965,000,000 30,676,000,000
Intrinsic Value 0 815,729,332 890,352,542 2,026,132,340 2,822,415,366 4,173,150,541

Facts:

  • Revenue was $3.16 billion in the trailing twelve months.
  • While the EBIT was $472 million in the trailing twelve months.
  • And the net income was $1.34 billion in the trailing twelve months.
  • The market capitalization was $30.68 billion in the trailing twelve months.
  • While the intrinsic value was $4.17 billion in the trailing twelve months.

Explanation

  • Revenue increases year-over-year and has a growth of 56 percent in five years.
  • While EBIT shows negative in the first three years and has a growth of 214 percent in five years.
  • Net income shows negative in the first 4 years however managed an increased in 2018 and YTD and has a growth of 143 percent in five years.
  • Moreover, market capitalization was erratic in movement in the last five years and has a growth of 25 percent in five years.
  • However, the intrinsic value is increasing year-over-year in the last four years and has a growth of 80 percent. The market capitalization might be overvalued compared to the intrinsic value.

Interpretation

In the last two years of its operation, the management was able to augment its earnings which shows a positive bottom line and was able to increase its cash and working capital as well. Twitter is profitable.

E) KEY EXECUTIVE COMPENSATION

Twitter

2014 2015 2016 2017 2018
Key Executive Compensation 7,855,088 440,006 9,904,051 15,207,588 39,067,621
Jack Dorsey/ Chief Executive Officer 0 68,506 56,551 0 1
Ned Segal/ Chief Financial Officer 0 0 0 14,299,528 4,963,054
Michael Montano/ Engineering Lead 0 0 0 0 17,984,246
Vijava Gadde/ Chief Legal Officer and Secretary 7,855,088 371,500 9,847,500 908,060 11,799,901
Mathew Derella/ Customers Lead 0 0 0 0 4,320,419

Detailed Distribution

2014 2015 2016 2017 2018
Key Executive Compensation
Salary 283,981 370,000 498,000 665,385 1,822,885
Bonus 300,000 609,210
Annual Other Income
Restricted Stock Award 7,555,950 9,348,000 14,239,203 36,626,526
Securities Option
LTIP Payout
Non-Equity Compensation
Other Compensation 15,157 70,006 58,051 3,000 9,000
Total 7,855,088 440,006 9,904,051 15,207,588 39,067,621
Jack Dorsey/Chief Executive Officer
Salary 1
Bonus
Annual Other Income
Restricted Stock Award
Securities Option
LTIP Payout
Non-Equity Compensation 68,506 56,551
Other Compensation 68,506 56,551 1
Total
Ned Segal/Chief Financial Officer
Salary 165,385 500,000
Bonus 300,000
Annual Other Income
Restricted Stock Award 13,832,643 4,460,054
Securities Option
LTIP Payout
Non-Equity Compensation
Other Compensation 1,500 3,000
Total 14,299,528 4,963,054
Michael Montano/ Engineering Lead
Salary 325,769
Bonus 45,500
Annual Other Income
Restricted Stock Award 17,612,977
Securities Option
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 17,984,246
Vijaya Gadde/ Chief Legal Officer
Salary 283,981 370,000 498,000 500,000 498,077
Bonus
Annual Other Income
Restricted Stock Award 7,555,950 9,348,000 406,560 11,298,824
Securities Option
LTIP Payout
Non-Equity Compensation
Other Compensation 15,157 1,500 1,500 1,500 3,000
Total 7,855,088 371,500 9,847,500 908,060 11,799,901
Matthew Derella/Customers Lead
Salary 499,038
Bonus 563,710
Annual Other Income
Restricted Stock Award 3,254,671
Securities Option
LTIP Payout
Non-Equity Compensation
Other Compensation 3,000
Total 4,320,419

Facts

  • Total key executive compensation was $39,067,621 in 2018.
  • And the chief executive officer, Jack Dorsey compensation was $1 in 2018.
  • While the chief financial officer, Ned Segal compensation was $4,963,054 in 2018.
  • On the other hand, Engineering Lead, Michael Montano compensation was $17,984,246 in 2018.
  • In addition, the Chief Legal Officer and Secretary, Vijava Gadde compensation was $11,799,901 in 2018.
  • Customers Lead, Matthew Derella compensation was $4,320,419 in 2018.

Explanation

  • The total key executive compensation represents 1.81 percent of the gross profit.
  • Ned Segal, CFO total salary represent 10 percent of his total compensation.
  • Michael Montano, Engg Lead total salary represents 2 percent of his total compensation.
  • Vijava Gadde, CLO and Secretary total salary represent 4 percent of his total compensation.
  • Matthew Derella, Customer Lead total salary represent 12 percent of his total compensation.

Interpretation

The total key executive compensation shows an increase of 110.53 percent from that of last year.

F) LOBBYING AND CONTRIBUTIONS

Twitter

LOBBYING/CONTRIBUTIONS TO POLITICIANS

2013 2014 2015 2016 2017 2018 2019
$90,000.00 $310,000.00 $500,000.00 $680,000.00 $550,000.00 $1,100,000.00 $420,000.00

TOTAL CONTRIBUTIONS

Cycle Total Democrats Republicans % to Dems % to Repubs Individuals PACs Soft (Indivs) Soft (Orgs)
2018 $288,284.00 $278,211.00 $9,150.00 97.00% 3.00% $269,558.00 $10,700.00 $250.00 $0.00
2016 $858,021.00 $589,276.00 $263,945.00 69.00% 31.00% $840,021.00 $15,500.00 $2,250.00 $0.00
2014 $41,300.00 $23,300.00 $3,000.00 56.00% 7.00% $26,300.00 $0.00 $15,000.00 $0.00
2012 $35,529.00 $34,279.00 $250.00 97.00% 1.00% $34,529.00 $0.00 $0.00 $0.00
2008 $3,000.00 $3,000.00 $0.00 100.00% 0.00% $3,000.00 $0.00 $0.00 $0.00
$1,226,134.00 $928,066.00 $276,345.00 76.00% 23.00% $1,173,408.00 $26,200.00 $17,500.00 $0.00

Itemized Lobbying Expenses for Twitter, 2019

Firms Hired Total Reported by Filer Reported Contract Expenses (Included in Total Reported by Filer)
Twitter $420,000.00
Mehlman, Castagnetti, et al $60,000.00
Integrated Solutions Group $30,000.00
Joseph Group $30,000.00
Total $120,000.00

A lobbyist representing Twitter, 2019

Lobbying Firm Hired Amount Subsidiary (Lobbied For) Lobbyist
Integrated Solutions Group $30,000.00 Twitter Boyd, Moses
O’Hanlon, G John
Joseph Group $30,000.00 Twitter Joseph, Kevin
Mehlman, Gastanetti, et al $60,000.00 Twitter Aronson, Lauren
Castagnetti, David
Collins, Mike
Distefano, Nichole
Eastman, Sage
Haro, Steven
Hingson, Dean Constantine
Mehlman, Bruce P
Pickering, Elise Finley
Robinson, Michael C
Rosen, Dean
Thomas, David R
Tolar, Helen
Wooters, Charles
Twitter $420,000.00 Twitter Culbertson, Lauren
Kane, Kevin
Roman, Lisa

Facts:

  • Total lobbying expenses in 2013 was $90,000.00.
  • Total lobbying expenses in 2014 was $310,000.00.
  • The lobbying expenses in 2015 was $500,000.00.
  • While lobbying expenses in 2016 was $680,000.00.
  • Lobbying expenses in 2017 was $550,000.00.
  • On the other hand, in 2018 the total lobbying expenses was $1,100,000,00.
  • And the total lobbying expenses in 2019 was $420,000.00.

Explanation

A special interest’s lobbying activity may go up or down over time, depending on how much attention the federal government is giving their issues. Particularly active clients often retain multiple lobbying firms, each with a team of lobbyists, to press their case for them.

Total Lobbying Expenditures: $420,000

Source: OpenSecrets.org

Center for Responsive Politics

Interpretation

Twitter is incurring a lobbying and contributions expenses to politicians every year since 2013 to the present time. These expenses are not reflected in the financial statements of the company although they were actually incurred.

G) FINANCIAL STRENGTH

Twitter

DATA

Working capital Total assets Sales EBIT Market value of equity Book value of total liabilities Retained earnings
5,595,000,000 10,162,572,000 3,164,378,000 472,058,000 28,585,400,000 3,356,978,000 -1,454,073,000

FORMULA

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

Calculation Ratio Z-Score Result
A – Working Capital / Total Assets 0.55 1.2 0.66
B – Retained Earnings / Total Assets -0.14 1.4 -0.196
C – EBIT / Total Assets 0.05 3.3 0.165
D – Market Value of Equity / Book Value of Total Liabilities 8.52 0.6 5.112
E – Sales / Total Assets 0.31 1.0 0.31
Z-Score 6.051

The Z-Score formula is computed as follows: Z-Score =  1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Facts

  • A – 0.55 * 1.2 = 0.66
  • B – -0.14 * 1.4 = -0.196
  • C – 0.05 * 3.3 = 0.165
  • D – 8.52 * 0.6 = 5.112
  • E – 0.31 * 1.0 = 0.31   
  • Z-Score = 6.051

Explanation

  • The Z-Score 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. It indicates the company’s probability of bankruptcy.

Interpretation

The Z-Score of Twitter was 6.051, it is then compared to the grading scale. According to Altman, an overall score of 3 and above will not declare bankruptcy. Twitter is not close to solvency. The company is in good financial health.  

CONCLUSION

Twitter company’s balance sheet is in good health and financially stable. The company is liquid and profitable. The management was able to augment its earnings every year which produced good financial results.

The company’s stock price was erratic in movement so as the market capitalization in the last ten years. The book value is increasing every year in the past six years. The shares of stocks were increasing as well. I recommend the stock of Twitter Inc (TWTR) a Buy.

 

CITATION

https://www.morningstar.com/stocks/XNYS/TWTR/quote.html

https://www.opensecrets.org/orgs/lobby.php?id=D000067113

Researched and written by Criselda

Twitter: criseldarome

 

 

 

Tesla Inc (TSLA) Extended Graph Analysis

April 29th, 2019 Posted by Extended Analysis No Comment yet

Tesla Motors Inc (TSLA) has officially changed its name to Tesla Inc. The company has acquired Solar City in August 2016, a solar power company.

tesla-motors-inc

About the Company

Company Profile

Tesla, Inc. is an American automotive and energy company based in Palo Alto, California. The company specializes in electric car manufacturing and, through its SolarCity subsidiary, solar panel manufacturing. Founded July 1, 2003, in San Carlos, CA by Elon Musk.Source: Wikipedia

 

TESLA EXTENDED GRAPH ANALYSIS

 

A) TESLA CASH FLOW

TeslaCASH FLOWS

Net Cash flows provided by operating activities Net Cash used for investing activities Net Cash provided (used for) financing Capital Expenditure Free Cash Flow
2014 -57,337,000 -990,444,000 2,143,130,000 -969,885,000 -1,027,222,000
2015 -524,499,000 -1,673,551,000 1,523,523,000 -1,634,850,000 -2,159,349,000
2016 -123,829,000 -1,416,430,000 3,743,976,000 -1,440,471,000 -1,564,300,000
2017 -60,654,000 -4,418,967,000 4,414,864,000 -4,081,354,000 -4,142,008,000
2018 2,097,802,000 -2,337,428,000 573,755,000 -2,319,516,000 -221,714,000
TTM 2,097,802,000 -2,337,428,000 573,755,000 -2,319,516,000 -221,714,000

Facts

  • Net cash flows provided by operating activities was $2.098 billion in 2018 and the trailing twelve months.
  • Also, net cash used for investing activities was $-2.34 billion in 2018 and the trailing twelve months.
  • And, cash provided (used for) financing was $574 million in 2018 and the trailing twelve months.
  • On the other hand, capital expenditures were $-2.32 billion in 2018 and the trailing twelve months.
  • Free cash flow was $222 million in 2018 and the trailing twelve month

Explanation

  • The net cash flows provided by operating activities soared up to 103 percent from 2017 to 2018 due to depreciation.
  • Also, the net cash used for investing activities is the purchases of property and equipment, excluding capital leases, net of sales.
  • Net cash provided (used for) financing activities are proceeds from the issuance of convertible and other debt; and repayments of convertible and other debt. Plus collateralized lease borrowings and other repayments.
  • On the other hand, capital expenditures are an investment in property and equipment.
  • Free cash flow increases by 1768 percent although negative, compared to 2017.

Interpretation

Tesla suffered a negative free cash flow for the past five years due to its huge investment in property and equipment. However, in 2018, free cash flow improved by 1768 percent. There is no cash left over from cash from operations after operating expenses and capital expenditures or CAPEX.

B) TESLA BALANCE SHEET

tesla motors

BALANCE SHEET 2014 2015 2016 2017 2018
Total cash 1,905,713,000 1,196,908,000 3,393,216,000 3,367,914,000 3,685,618,000
Current Assets 3,198,657,000 2,791,568,000 6,259,796,000 6,570,520,000 8,306,308,000
Total assets 5,849,251,000 8,092,460,000 22,664,076,000 28,655,372,000 29,739,614,000
Current liabilities 2,107,166,000 2,816,274,000 5,827,006,000 7,674,670,000 9,992,136,000
Total liabilities 4,937,541,000 7,003,516,000 17,911,165,000 24,418,130,000 24,816,371,000
Equity 911,710,000 1,088,944,000 4,752,911,000 4,237,242,000 4,923,243,000
Retained earnings -1,433,682,000 -2,322,323,000 -2,997,237,000 -4,974,299,000 -5,317,832,000
Total debts 2,466,280,000 2,715,586,000 7,128,431,000 10,314,938,000 11,971,371,000
Working capital 1,091,000,000 -25,000,000 433,000,000 -1,104,000,000 -1,686,000,000

Facts

  • Total cash were $3.37 billion and $3.69 billion in 2017 and 2018 respectively.
  • And, current assets were $6.57 billion and $8.31 billion in 2017 and 2018 respectively.
  • Total assets were $28.66 billion and $29.34 billion in 2017 and 2018 respectively.
  • Current liabilities were $7.67 billion and $9.99 billion respectively.
  • Total liabilities were $24.42 billion and $24.82 in 2017 and 2018 respectively.
  • Equity were $4.97 billion and $5.32 billion in 2017 and 2018 respectively.
  • Retained earnings were -$4.97 billion and -$5.32 billion in 2017 and 2018 respectively.
  • Total debts were $10.31 billion and $11.97 billion in 2017 and 2018 respectively.
  • Working capital was -$1.1 billion and -$1.7 billion in 2017 and 2018 respectively.

Explanation

  • Total cash growth was 48 percent in five years period.
  • And, current assets growth was 61 percent in five years period. Increased in inventory has impacted the total.
  • While total assets growth was 80 percent in five years period.
  • Current liabilities increased 79 percent in five years due to an increase in accounts payable.
  • On the other hand, total liabilities increased 80 percent in five years due to an increase in long-term debt which increases year-over-year.
  • Equity has a growth of 81 percent in five years due to year-over-year increases in paid-in capital.
  • Retained earnings were negative in the last five years and falling year-over-year.
  • Moreover, total debts increase year-over-year and have grown 79 percent in five years. Long-term debt impacted the total and in 2018 the short term-debt increased by 186 percent from 2017 to 2018.
  • On the other hand, working capital was negative due to current liabilities are higher than the current liabilities in 2017 and in 2018. Due to increased accounts payable and short-term debt.

Interpretation

Tesla’s total current assets are not enough to pay its total current liabilities in the past two years because liabilities are higher than the current assets.

 

C) TESLA FINANCIAL RATIOS

tesla-motors

FINANCIAL RATIOS 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 TTM
Asset turnover (average) 1.23 0.45 0.37 0.45 1.14 0.77 0.58 0.46 0.46 0.73 0.73
Return on assets % -61.21 -59.76 -46.28 -43.36 -4.19 -7.11 -12.75 -4.39 -7.64 -3.34 -3.34
Financial leverage (average) 0.00 1.86 3.18 8.94 3.62 6.42 7.43 4.77 6.76 6.04 6.04
Return on equity % 0.00 0.00 -118.03 -227.22 -18.69 -37.25 -88.84 -23.11 -43.63 -21.31 -21.31
Return on invested capital % 0.00 0.00 -64.97 -72.34 -4.55 -8.45 -21.46 -6.27 -11.47 -1.90 -2.38
Interest coverage -21.01 -154.40 0.00 0.00 -1.17 -1.82 -6.37 -2.75 -3.69 -0.52 -0.52

Facts

  • Asset turnover was averaging 0.46 and 0.73 in 2017, 2018 respectively.
  • Return on assets was -.0764 percent and -.0334 percent in 2017 and 2018 respectively.
  • Financial leverage was averaging 6.76 and 6.04 in 2017 and 2018 respectively.
  • Return on equity was -43.63 percent and -21.31 percent in 2017 and 2018 respectively.
  • Return on invested capital was -11.47 percent and -1.90 percent in 2017 and 2018 respectively.
  • Interest coverage were -3.69 and -0.52 in 2017 and 2018 respectively.

Explanation

  • Asset turnover ratio means that each dollar of assets generates an average of 46 cents and 73 cents of sales in 2017 and 2018 respectively.
  • While the returns on assets (ROA) indicates that for every dollar that was invested in assets produced -$76.4 and -$33.4 of net income in 2017 and 2018 respectively. In other words, there were no returns on the dollar invested in assets because it is negative.
  • Moreover, financial leverage indicates that liabilities are 676 percent and 604 percent of shareholders’ equity in 2017 and 2018 respectively.
  • Also, return on equity indicates that every dollar of common shareholders’ equity earned -$43.63 percent and -$21.31 in 2017 and 2018 respectively. In other words, the shareholders did not earn a return on their investment.
  • Return on invested capital indicates that for every dollar invested in capital produces a -$0.1147 and -$0.0190 cents negative returns in 2017 and 2018 respectively.
  • On the other hand, interest coverage means that Tesla has negative 3.69 and negative -0.52 times earnings than its current interest payments in 2017 and 2018 respectively. In other words, its earnings are less than the current interest payment.

Interpretation

The profitability of Tesla was not impressive. The return on the investments in assets, equity and invested capital was negative meaning there was no return on the investment. Moreover, financial leverage was high at 604 percent. In addition, Its current interest payment is greater than its earnings.

 

D) TESLA INCOME AND MARKET

tesla-motors

  2014 2015 2016 2017 2018 TTM
Revenue 3,198,356,000 4,046,025,000 7,000,132,000 11,758,751,000 21,461,268,000 21,461,268,000
EBIT -186,689,000 -716,629,000 -667,340,000 -1,632,086,000 -252,840,000 -252,840,000
Net Income -294,040,000 -888,663,000 -674,914,000 -1,961,400,000 -976,091,000 -976,091,000
Market capitalization 27,954,000,000 31,543,000,000 34,423,000,000 52,328,000,000 57,442,000,000 48,338,000,000
Intrinsic value 6,912,210,299 12,344,598,323 1,227,212,668 9,992,830,135 27,736,000,163 35,273,927,556

Facts

  • Revenue were $11.76 billion and $21.46 billion in 2017 and 2018 respectively.
  • While EBIT was -$1.63 billion and -$253 million in 2017 and 2018 respectively.
  • Net income were -$1.96 billion and -$976 million in 2017 and 2018 respectively.
  • In addition, market capitalization were $57,442,000,000 and $48,338,000,000 in 2018 and the trailing twelve months respectively. The market value falls down by 20 percent in the trailing twelve months from 2018.
  • On the other hand, the intrinsic values were $27,736,000,163 and $35,273,927,556 in 2018 and the trailing twelve months respectively. In other words, the intrinsic value was $27.74 billion and $35.27 billion in 2018 and the trailing twelve months.

Explanation

  • The revenue growth was 85 percent in five years and it increases year-over-year.
  • While EBIT was erratic in movement and negative in the last five years.
  • In addition, net income was erratic in movement and was negative in the last five years.
  • Moreover, market capitalization has a growth of 42 percent in the last five years.
  • The intrinsic value was erratic in movement from 2014 to 2017. However, the value increased by 64 percent and 21 percent in 2018 and the trailing twelve months respectively.

Interpretation

Although the revenue increases year-over-year, the bottom line was not impressive. The cost of revenue represents 80 percent of the sales. In addition, the intrinsic value is lesser than the market capitalization of Tesla. It may be said that the market value is overstated.

E) KEY EXECUTIVE COMPENSATION

tesla-motors

Key Executive Compensation 2013 2014 2015 2016 2017
Key Executive Compensation 875,592 20,950,746 24,641,448 17,360,435 27,558,904
Elon Musk / CEO and Chairman of the Board 69,989 35,360 37,584 45,936 49,920
Deepak Ahuja / Chief Financial Officer 338,000 3,784,343 339,300 0 15,498,009
Jason Wheeler / Former Chief Financial Officer 0 0 20,898,296 501,931 174,041
Douglas John Field / Senior Vice President, Engineering 0 0 3,115,708 2,420,475 9,151,618
John Mcneil / Former President, Global Sales and Service 0 0 0 6,464,510 2,435,706
Jeffrey Straubel / Chief Technology Officer 467,603 17,131,043 250,560 7,927,583 249,600

DETAILED DISTRIBUTION

2013 2014 2015 2016 2017

Key Executive Compensation

Salary 620,880 622,960 980,521 1,601,503 1,702,407
Bonus 10,500 0
Annual Other Income 0
Restricted Stock Award 56,424 32,655 2,808,785 4,238,644 20,756,754
Securities Option 187,788 20,295,131 20,852,142 10,747,808 4,567,304
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 0 0 0 772,480 395,803
Other Compensation 0 0 0 0 136,636
Total 875,592 20,950,746 24,641,448 17,360,435 27,558,904

Elon Musk / CEO and Chairman of the Board

Salary 33,280 35,360 37,584 45,936 49,920
Bonus
Annual Other Income
Restricted Stock Award 10,620
Securities Option 26,089
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 69,989 35,360 37,584 45,936 49,920
Deepak Ahuja / Chief Financial Officer
Salary 338,000 338,000 339,300 0 428,846
Bonus 0
Annual Other Income 0
Restricted Stock Award 10,501,859
Securities Option 3,446,343 4,567,304
LTIP Payout 0 0
Non-Equity Compensation 0 0
Other Compensation 0 0
Total 338,000 3,784,343 339,300 0 15,498,009

Jason Wheeler / Former Chief Financial Officer

Salary 0 0 46,154 501,931 174,041
Bonus
Annual Other Income
Restricted Stock Award
Securities Option 20,852,142
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 0 20,898,296 501,931 174,041

Douglas John Field / Senior Vice President, Engineering

Salary 0 0 306,923 301,153 300,000
Bonus 0
Annual Other Income 0
Restricted Stock Award 2,808,785 2,119,322 8,851,618
Securities Option
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 0 3,115,708 2,420,475 9,151,618

John Mcneil / Former President, Global Sales and Service

Salary 0 0 0 501,923 500,000
Bonus 0 0
Annual Other Income 0 0
Restricted Stock Award 2,119,322 1,403,277
Securities Option 3,070,785 0
LTIP Payout 0 0
Non-Equity Compensation 772,480 395,803
Other Compensation 0 136,626
Total 0 0 0 6,464,510 2,435,706

Jeffrey Straubel / Chief Technology Officer

Salary 249,600 249,600 250,560 250,560 249,600
Bonus 10,500 0
Annual Other Income 0 0
Restricted Stock Award 45,804 32,655
Securities Option 161,699 16,848,788 7,677,023
LTIP Payout 0 0
Non-Equity Compensation 0 0
Other Compensation 0 0
Total 467,603 17,131,043 250,560 7,927,583 249,600

Facts

  • The total key executive compensation was $27,558,904 in 2017.
  • Elon Musk total compensation was $49,920 in 2017.
  • While Deepak Ahuja total compensation was $15,498,009 in 2017.
  • In addition, Jason Wheeler total compensation was $174,041 in 2017.
  • Douglas John Field total compensation was $9,151,618 in 2017.
  • Moreover, John McNeil total compensation was $2,435,706 in 2017.
  • Jeffrey Straubel total compensation was $249,600 in 2017.

Explanation

  • The total key executive compensation had increased by 58.75 percent from the previous year.
  • Elon Musk total compensation represents 0.18 percent of the total key executive compensation.
  • While Deepak Ahuja total compensation represents 56.24 percent of the total key executive compensation.
  • And, Jason Wheeler total compensation represents 0.63 percent of the total key executive compensation.
  • Douglas John Field total compensation represents 33.21 percent of the total key executive compensation.
  • In addition, John McNeil total compensation represents 8.84 percent of the total key executive compensation.
  • Jeffrey Straubel total compensation represents 0.91 percent of the total key executive compensation.

Interpretation

The total key executive compensation represents 1.24 percent of the gross profit, however, its EBIT and net income were negative.

 

F) TESLA LOBBYING/CONTRIBUTIONS TO POLITICIANS

tesla-motors

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
40,000 30,000 170,000 120,000 120,000 0 0 0 560,000 820,000 760,000 890,000

 

Firms Hired

Total Reported by Filer

Reported Contract Expenses (Included in Total Reported by Filer)

Tesla Motors

$890,000.00

West Front Strategies $200,000.00
Holland & Knight $130,000.00
Tia Ginsberg & Assoc $120,000.00
Burton Strategy Group $15,000.00
Total $465,000.00

Lobbyists representing Tesla Motors Inc, 2018

Lobbying Firm Hired Amount Subsidiary

(Lobbied For)

Lobbyist
Burton Strategy Group $15,000.00 Tesla Motors Burton Jeff
Holland & Knight $130,000.00 Tesla Motors Dunham, Ben
Karakitsos, Dimitri
Mason, Scott D
Reynolds, Tom
Tesla Motors $890,000.00 Tesla Motors Hennessy, Scott
Kintz, Brooke Frankenfield
Nazar, Hasan
Veitch, Alexandra Norris
Tia Ginsberg & Assoc $120,000.00 Tesla Motors Ginsberg, Matt
Pike, Madelene
Tai, Jason
West Front Strategies $200,000.00 Tesla Motors Brown, Cindy S
Davis, Ashley E
Mcdaniel, Malloy
Remington, Kristi
Stein, Shimon

Source: OpenSecret.org   The Center for Responsive Politics

 

Facts

  • Lobbying was $40,000 in 2007.
  • And, lobbying in 2008 was $30,000.
  • In 2009 the lobbying was $170,000.
  • In 2010 the lobbying was $120,000.
  • While in 2011 the lobbying was $120,000.
  • On the other hand, in 2012, 2013 and 2014, the lobbying was $0.
  • Lobbying in 2015 was $560,000.
  • The lobbying in 2016 was $820,000.
  • Moreover, lobbying in 2017 was $760,000.
  • And in 2018 lobbying was $890,000.

Explanation

The total lobbying in 2018 of $890,000 represents 0.02 percent of the total operating expenses.

Interpretation

Total lobbying expenses are not shown in the financials of Tesla, however, yearly the company contributed to the politicians.

 

G) TESLA FINANCIAL STRENGTH

tesla-motors

DATA

Working Capital Total Assets Sales EBIT Market Value of Equity Book Value of Total Liabilities Retained Earnings
-1,686,000,000 29,739,614,000 21,461,268,000 -252,840,000 48,338,000,000 24,816,371,000 -5,317,832,000

Formula:

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

 

Calculation Ratio Z-Score Result
A – Working Capital / Total Assets -0.06 1.2 -0.07
B – Retained Earnings / Total Assets -0.18 1.4 -0.25
C – EBIT / Total Assets -0.01 3.3 -0.03
D – Market Value of Equity / Book Value of Total Liabilities 1.95 0.6 1.17
E – Sales / Total Assets 0.72 1.0 0.72
Z-Score 1.53

 

The Z-Score formula is computed as follows: Z-Score =  1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Facts

  • A – -0.06 * 1.2  = -0.07
  • B – -0.18 * 1.4 = – 0.25
  • C – -0.01 * 3.3 = – 0.03
  • D – 1.95  * 0.6 = 1.17
  • E – 0.72 * 1.0  = 0.72
  • Z – Score = 1.53

Explanation

Z-Score is a mathematical measurement that is used to compare data points from different sets of data to arrive at the relationship to the mean. This impression is often known as the Altman Z-Score. This measurement was used to forecast the likelihood of the company would go bankrupt.

Interpretation

The Z – Score of Tesla was 1.53. According to Altman, a score of 0 – 1.8 would likely to declare bankruptcy in the future. Let us go deeper into the analysis with care. Tesla is an auto industry and is highly capital intensive, in addition, its cost of revenue from year-to-year is expensive which needs a huge amount of cash to meet its production demands. Although Elon Musk has no problem in obtaining funds, he has somehow developed that trust among investors which is very significant.

This statistical measurement sums several weighted financial ratios and compares it to the scale shown above as A, B, C, D & E. The profitability, liquidity, leverage, and efficiency are the main factors of this measurement. Hence, total assets are the denominator in four equations, and total assets represent a huge percentage on all the ratios, the result is most likely negative and low.

Conclusion

Since Tesla was founded in 2003, investors believed that the company can succeed. In the past, Tesla has faced a number of challenges and was able to meet its target production but with a quarter of short-target production. There was an issue of Model 3 production mistakes which is excessive automation.

According to Bloomberg in an article written by Tom Randall and Dean Halford updated April 30, 2019, they estimated that the company had manufactured 241,253 cars of Model 3s or 22,640 units in the current quarter or 5,902 units per week. When I first valued Tesla in April 2014, the number of units I estimated at the end of 2014 was 42,250 units which are almost the actual number of units produced by the company when the report came out. I also projected the five years annual from 2015 up to 2019. The total number of units I projected at the end of 2019 was 259,521 units which are not far from the Bloomberg estimate.

Tesla Inc is not liquid because of the demand in cash is too high. Its financial leverage ratio was 6.04 or 604 percent, meaning debt is 604 percent of total equity. In other words, Tesla is using more debt than equity. The market price in 2019 drop by 28.66 percent from the end of 2018.

Elon Musk had established the confidence of many investors and I believed that the company will succeed although Tesla is experiencing a tough time running its operation due to the high volume of demands and production that must be manufactured and delivered.

I believed in the ability of Elon Musk in running the company as other investors have put there trust in him. I can say that I can recommend a Buy on the stock of Tesla Inc (TSLA).

CITATION

https://www.morningstar.com/stocks/XNAS/TSLA/quote.html

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

 

Researched and written by Criselda

Twitter: criseldarome

Air Lease Corporation Class A (AL) Extended Graph Analysis

February 13th, 2019 Posted by Extended Analysis 4 comments

Air Lease Corporation Class A (AL)

air-lease-corporation-al

About the Company

Company Profile

Air Lease Corporation Class A (AL) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company engages in purchasing new commercial jet transport aircraft directly from aircraft manufacturers. Such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”), and leasing those aircraft to airlines throughout the world. The company is based in the United States. Further, AL is headquartered in Los Angeles, California, USA. Moreover, the initial public offering (IPO) of Class A stock on the New York Stock Exchange on April 19, 2011, and in fact raised an estimated total of US $965.6 million.

AIR LEASE EXTENDED GRAPH ANALYSIS

A) AIR LEASE CASH FLOW

CASH FLOWS

Net Cash Flow provided by Operating Activities Net Cash used for Investing activities Net Cash (used for) financing activities Capital expenditure Free Cash Flow
2013 654,213,000 -2,185,894,000 1,571,765,000 -2,283,642,000 -1,629,429,000
2014 769,018,000 -1,805,657,000 1,049,285,000 -2,409,506,000 -1,640,488,000
2015 839,795,000 -2,152,801,000 1,186,862,000 -2,905,548,000 -2,065,753,000
2016 1,020,078,000 -2,005,516,000 1,103,565,000 -2,993,556,000 -1,973,478,000
2017 1,059,713,000 -2,143,951,000 1,101,640,000 -2,923,440,000 -1,863,727,000
TTM 1,178,181,000 -3,123,079,000 1,948,309,000 -3,545,839,000 -2,367,658,000

Facts:

  • Operating cash flow was $1.06 billion and $1.2 billion in 2017 and the trailing twelve months respectively.
  • Net cash used for investing activities was -$2.1 and $3.1 billion in 2017 and the trailing twelve months respectively.
  • On the other hand, net cash used for financing activities was $1.1 and $1.9 billion in 2017 and the trailing twelve months respectively.
  • Next, capital expenditure was -$2.9 and -$3.5 billion in 2017 and the trailing twelve months respectively.
  • Also, Free cash flow was -$1.9 and -$2.4 billion in 2017 and the trailing twelve months respectively.

Explanation

  • Operating cash flow shows that AL is successful in its operation by producing sufficient money for its growth.
  • On the other hand, net cash used for investing activities is consist of flight equipment under operating lease and payments for deposits on flight equipment purchases.
  • Moreover, the net cash used for financing activities is cash dividends paid and the acquisition of furnishings, equipment, and other assets.
  • Likewise, capital expenditures are:
    • $1.97 million – acquisition of flight equipment under operating lease.
    • $774k – payments on deposits on flight equipment purchases.
    • $177k – acquisition of aircraft furnishings, equipment, and other assets.
  • Moreover,  Free cash flow was negative in the last five years indicating that capital expenditures are higher than the operating cash flows. It might simply mean that AL is investing heavily in new equipment and other capital assets that cause excess cash to utilized.

Interpretation

As a result, Air Lease Corporation is liquid and has sa table cash flow in the past five years of its business operations.

 

B) AIR LEASE BALANCE SHEET

air-lease-corporation-al

Total Cash Current Asset Total Asset Current Liabilities Total Liabilities Equity Retained Earnings Total Debts Working Capital
2013 270,173,000 1,345,196,000 9,332,604,000 131,223,000 6,809,170,000 2,523,434,000 312,859,000 5,853,317,000 1,213,973,000
2014 282,819,000 1,427,422,000 10,774,784,000 190,952,000 8,002,722,000 2,772,062,000 555,573,000 6,714,362,000 1,236,470,000
2015 156,675,000 1,227,710,000 12,355,098,000 215,983,000 9,335,186,000 3,019,912,000 791,526,000 7,712,421,000 1,011,727,000
2016 274,802,000 1,565,478,000 13,975,616,000 256,775,000 10,593,429,000 3,382,187,000 1,143,311,000 8,713,874,000 1,308,703,000
2017 292,204,000 1,854,980,000 15,614,164,000 309,182,000 11,486,722,000 4,127,442,000 1,866,342,000 9,698,785,000 1,545,798,000

Facts:

  • Total cash were $275 and $292 million in 2016 and 2017 respectively.
  • And the current assets were $1.57 and $1.85 billion in 2016 and 2017 respectively.
  • Total assets were $13.98 and $18.6 billion in 2016 and 2017 respectively.
  • On the other hand, current liabilities were $256.8 and $309 million in 2016 and 2017 respectively.
  • Moreover, total liabilities were $1.59 and $11.49 billion in 2016 and 2017 respectively.
  • Consequently, the equities were $3.38 and $4.13 billion in 2016 and 2017 respectively.
  • In the same way, retained earnings were $1.14 and $1.87 billion in 2016 and 2017 respectively.
  • In addition, total debts were $8.71 and $8.7 billion in 2016 and 2017 respectively.
  • Similarly, working capitals were $1.31 and $1.55 billion in 2016 and 2017 respectively.

Explanation

  • Total cash has a growth of 8 percent in five years. Cash is 2 percent of total assets.
  • And also, current assets have a growth of 38 percent in five years. It is 12 percent of total assets.
  • Total assets have a growth of 67 percent in five years.
  • On the other hand, current liabilities increased 136 percent from 2013 to 2017. It is 3 percent of total liabilities.
  • Moreover, total liabilities increased by 69 percent from 2013 to 2017.
  • Likewise, equity had a growth of 64 percent in five years.
  • And also the retained earnings had a growth of 497 percent in five years and have a year-over-year growth averaging 60 percent.
  • Consequently, the total debt increased by 66 percent from 2013 to 2017.
  • Last, working capital was stable in the last five years at an average of $1.3 million indicating that AL was able to finance its short-term obligations. Further, it has a growth of 27 percent in five years.

Interpretation

AL is high leverage at nearly 400 percent. Its long-term debt represents 84 percent against total debt. Further, the debt was greater 43 percent against equity. However, its total assets were impressive and increase year-over-year in five years. Finally, the company’s balance sheet was stable and sound.

 

C) AIR LEASE FINANCIAL RATIOS

air-lease-corporation-class-a-al

2011 2012 2013 2014 2015 2016 2017 TTM
Asset Turnover (Average) 0.06 0.10 0.10 0.10 0.11 0.11 0.10 0.10
Return on Assets % 1.03 2.11 2.28 2.55 2.19 2.85 5.11 5.20
Financial Leverage (Average) 2.37 3.15 3.70 3.89 4.09 4.13 3.78 3.92
Return on Equity % 2.45 5.85 7.84 9.67 8.75 11.71 20.14 20.74
Return on Invested Capital % 1.84 3.65 3.97 4.27 4.01 4.73 7.35 7.28
Interest Coverage 2.44 2.56 2.73 3.05 2.67 3.27 3.36 3.19

Facts

  • The asset turnover ratio is averaging 0.10 in 2017 and the trailing twelve months.
  • Return on assets was 5.11 and 5.20 percent in 2017 and the trailing twelve months.
  • Moreover, Financial leverage is averaging 3.78 and 3.92 in 2017 and the trailing twelve months.
  • In addition, Return on equity was 20.14 and 20.74 in 2017 and the trailing twelve months.
  • Likewise, Return on invested capital was 7.35 and 7.28 percent in 2017 and the trailing twelve months.
  • And the interest coverage was 3.36 and 3.19 in 2017 and the trailing twelve months.

Explanation

  • Asset turnover ratio means that each dollar of assets generates an average of 10 cents of sales.
  • The return on assets (ROA) indicates that for every dollar that was invested in assets produced $51.10 and $52 of net income in 2017 and the trailing twelve months respectively.
  • On the other hand, financial leverage indicates that AL’s liabilities are 378 and 392 percent of shareholders’ equity in 2017 and the trailing twelve months respectively, which are high.
  • Return on equity indicates that every dollar of common shareholders’ equity earned $20.14 and $20.74 in 2017 and the trailing twelve months respectively. In other terms, shareholders earned 2014 percent return on their investment.
  • Return on invested capital indicates that for every dollar invested in capital produces a $0.0735 and $0.0728 cents returns in 2017 and the trailing twelve months respectively.
  • Lastly, interest coverage means that AL 3.36 and 3.19 times more earnings than its current interest payments in 2017 and the trailing twelve months respectively.

Interpretation

Overall, efficiency and profitability ratios show positive results although financial leverage has a high ratio. Further, it indicates that debt is used effectively to convert capital to earned profits. Furthermore, the company is capable to pay its interest on debt with its principal.

 

D) AIR LEASE INCOME AND MARKET

air-lease-corporation-al

Sales EBIT Net Income Market Cap Intrinsic Value
2013 858,675,000 485,812,000 190,411,000 3,222,000,000 712,340,1357
2014 1,050,493,000 615,366,000 255,998,000 3,576,000,000 2,097,085,219
2015 1,222,840,000 731,097,000 253,391,000 3,434,000,000 2,900,818,643
2016 1,419,055,000 866,439,000 374,925,000 3,531,000,000 3,601,547,148
2017 1,516,380,000 896,901,000 756,152,000 4,983,000,000 14,180,694,017
TTM 1,628,192,000 953,981,000 843,538,000 3,351,000,000 12,118,551,202

Facts:

  • Sales were $1.5 billion and $1.6 billion in 2017 and 2018 TTM respectively.
  • And the EBIT was $896.9 million and $954 million in 2017 and 2018 TTM respectively.
  • Net Income was $756 million and $843.5 million in 2017 and 2018 TTM respectively.
  • Further, the market capitalization was $4.98 billion and $3.351 billion in 2017 and 2018 TTM respectively.
  • Likewise, intrinsic value was $14.181 and $12,119 billion in 2017 and 2018 TTM respectively.

Explanation:

  • The sales growth was 90 percent in five years and increases year-over-year at an average of 14 percent.
  • And the EBIT growth was 96 percent in five years and increases year-over-year at an average of 15 percent.
  • Moreover, the net income has a growth of 343 percent in five years and increases year-over-year at an average of 39 percent, except in 2015 to 2016 where the growth was -1.02 percent.
  • On the other hand, market capitalization has a growth of 4 percent in five years and the year-over-year growth was averaging 3.64 percent. It suffered negative growth in 2016 at 4 percent and the trailing twelve months at 32.75 percent.
  • Further, the intrinsic value was 185 and 185 percent above the market cap in 2017 and 2018 TTM respectively.

Interpretation

AL management has managed to utilize its assets to produce sufficient revenue for the operation of the business in the last five years. As a result, the company is profitable. Moreover, its intrinsic value was higher than the market cap indicating that the stock price of AL was trading at an undervalued price.

 

E) AIR LEASE KEY EXECUTIVE COMPENSATION

air-lease-corporation-al

SUMMARY

Executive 2013 2014 2015 2016 2017 (2017) %
Key Executive Compensation 24,969,215 26,494,168 24,748,889 27,000,783 24,568,646 100.00%
Steven F. Udvar-Hazy – Exec Chairman of the Board 9,122,086 9,674,429 9,079,933 9,686,620 7,924,666 32.26%
John L. Plueger – CEO and President 7,122,845 7,482,030 7,012,942 7,785,065 8,076,572 32.87%
Gregory B. Willis – CFO and EVP 1,277,367 1,554,217 1,923,635 2,272,815 2,202,488 8.96%
Jie Chen – EVP and Managing Director of Asia 4,163,116 4,369,772 3,671,083 3,881,834 3,323,377 13.53%
Grant A. Levy – EVP 3,283,801 3,413,720 3,061,296 3,374,449 3,041,543 12.38%

DETAILED DISTRIBUTION

Key Executive Compensation

2013 2014 2015 2016 2017 % 2017
Salary 5,351,865 5,443,304 5,508,251 5,335,625 5,153,417 20.98%
Bonus 1,492,816 1,017,497 1,337,132 1,730,618 0
Restricted Stock Award 7,866,680 9,097,027 10,348,203 9,565,268 11,819,083 48.11%
Non-Equity Compensation 9,936,909 10,569,427 7,220,411 9,882,069 7,029,850 28.61%
Other Compensation 320,945 366,913 334,892 487,203 566,296 2.30%
Total 24,969,215 26,494,168 24,748,889 27,000,783 24,568,646 100.00%

Steven F. Udvar-Hazy – Exec Chairman of the Board

Salary 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 22.71%
Bonus 526,291 347,328 456,840 649,801 0
Restricted Stock Award 3,376,861 3,897,384 4,316,339 3,817,607 3,267,474 41.23%
Non-Equity Compensation 3,276,000 3,420,000 2,340,000 3,132,000 2,548,000 32.15%
Other Compensation 142,934 209,717 166,754 287,212 308,392 3.89%
Total 9,122,086 9,674,429 9,079,933 9,686,620 7,924,666 100.00%

John L. Plueger – CEO and President

Salary 1,500,000 1,500,000 1,500,000 1,250,000 1,000,000 12.38%
Bonus 410,561 258,552 380,700 541,500 0
Restricted Stock Award 2,412,042 2,793,105 3,093,352 3,279,398 5,145,622 63.71%
Non-Equity Compensation 2,730,000 2,850,000 1,950,000 2,610,000 1,770,000 21.92%
Other Compensation 70,242 80,373 88,890 104,167 160,950 1.99%
Total 7,122,845 7,482,030 7,012,942 7,785,065 8,076,572 100.00%

Gregory B. Willis – CFO and EVP

Salary 401,969 443,333 491,667 555,917 606,417 27.53%
Bonus 25,886 43,969 67,085 83,875 0
Restricted Stock Award 306,571 409,224 763,157 485,301 818,496 37.16%
Non-Equity Compensation 492,492 641,250 585,000 1,126,389 755,790 100.00%
Other Compensation 50,449 16,441 16,726 21,333 21,785 0.99%
Total 1,277,367 1,554,217 1,923,635 2,272,815 2,202,488 100.00%

Jie Chen – EVP and Managing Director of Asia

Salary 876,563 905,596 914,167 920,833 928,667 27.94%
Bonus 303,148 228,500 246,881 259,003 0 0.00%
Restricted Stock Award 930,018 1,063,983 1,229,799 1,060,523 1,369,522 41.21%
Non-Equity Compensation 2,027,917 2,141,502 1,248,975 1,604,280 987,660 29.72%
Other Compensation 25,470 30,191 31,261 37,195 37,528 1.13%
Total 4,163,116 4,369,772 3,671,083 3,881,834 3,323,377 100.00%

Grant A. Levy – EVP

Salary 773,333 794,375 802,417 808,875 818,333 26.91%
Bonus 226,930 139,148 185,626 196,439 0
Restricted Stock Award 841,188 933,331 945,556 922,439 1,217,969 40.04%
Non-Equity Compensation 1,410,500 1,516,675 1,096,436 1,409,400 967,600 31.81%
Other Compensation 31,850 30,191 31,261 37,296 37,641 1.24%
Total 3,283,801 3,413,720 3,061,296 3,374,449 3,041,543 100.00%

Facts:

In 2017:

  • Total key executive compensation was $24.57 million.
  • And Steven F. Udvar-Hazy total compensation was $7.92 million.
  • John L Plueger total compensation was $8.08 million.
  • Gregory B. Willis total compensation was $2.20 million.
  • Jie Chen total compensation was $3.23 million.
  • Grant A. Levy total compensation was $3.04 million.

Explanation

  • The total key executive compensation represents 3.25 percent of the total net income in 2017.
  • And Steven F. Udvar-Hazy total compensation represents 32.26 percent of the total key executive compensation, in which 22.71 percent is salary or equivalent to $1.8 million.
  • Further, John L. Plueger total compensation represents 32.86 percent of the total key executive compensation in which 12.38 percent is salary equivalent to $1.0 million.
  • Likewise, Gregory B. Willis total compensation represents 8.96 percent of the total key executive compensation in which 27.53 percent is salary or equivalent to $606k.
  • Next is Jie Chen total compensation represents 13.53 percent of the total key executive compensation in which 27.94 percent is salary or equivalent to $929k.
  • Similarly, Grant A. Levy total compensation represents 12.38 percent of the total key executive compensation in which 26.91 percent is salary or equivalent to $818k.

Interpretation

The total key executive compensation is averaging $25.6 million in five years comparing to the average 5-year net income of $366 million. Therefore, it indicates that the total executive compensation is 7 percent of the average net income.

 

F) LOBBYING/CONTRIBUTIONS TO POLITICIANS

There is no record of lobbying found for Air Lease Corporation (AL).

Search Results

No lobbying income or spending found.

This may be because no lobbying was reported, because the lobbying contract was terminated, or because reported lobbying was less than the $10,000 threshold that allows us to build a profile. The Center for Responsive Politics conservatively assumes any lobbying under the $10,000 threshold to be $0 earned or spent. Please click on “View Report Images” on the tab navigation bar to see if this firm or client has filed any reports.

NOTE: All lobbying expenditures on this page come from the Senate Office of Public Records. Data for the most recent year was downloaded on October 24, 2018.

 

G) AIR LEASE FINANCIAL STRENGTH

air-lease-corporation-al

Data:

Working Capital Total Assets Sales EBIT Market Value of Equity Book Value of Total Liabilities Retained Earnings
1,545,798,000 15,614,164,000 1,629,374,000 953,981,000 4,127,442,000 11,486,722,000 1,866,342,000

Formula:

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

Calculation Ratio Z-Score Result
A – Working Capital/Total Assets 0.10 1.2 0.12
B – Retained Earnings/Total Assets 0.12 1.4 0.17
C – EBIT/Total Assets 0.06 3.3 0.20
D – Market Value of Equity/Book Value of Total Liabilities 0.36 0.6 0.22
E-Sales/Total Assets 0.10 1.0 0.10
Z-Score 0.81

The above Z-Score is computed as follows:  Z-Score =  1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Facts:

  • A –  0.10 * 1.2 = 0.12
  • B – 0.12 * 1.4 = 0.17
  • C – 0.06 * 3.3 = 0.20
  • D – 0.36 * 0.6 = 0.22
  • E – 0.10 * 1.0 = 0.10
  • Z-Score = 0.81  

Explanation

Z-Score is a mathematical measurement that is used to compare data points from different sets of data to arrive at the relationship to the mean. Moreover, this impression is often known as the Altman Z-Score. This measurement was used to forecast the likelihood of the company would go bankrupt.

Interpretation

The Z-Score of AL is below 1.0 which is 0.81. Typically a score of 0 – 1.8 is more likely the company will declare bankruptcy. Alarming isn’t it. But wait let us go deeper and interpret it with care.

Let us note that, this statistical measurement sums several weighted financial ratios and compare it to the scale shown above  A, B, C, D & E. The profitability, liquidity, leverage, and efficiency is the main factors of this measurement. Hence, total assets are the denominator in four equations, therefore, total assets represent a huge percentage on all the ratios, the result is obviously low.  

In addition, analyzing this kind of industry, AL is an intensive industry which requires a huge amount of capital investment to run its business effectively. Further, AL invested heavily in property, plant, and equipment and in the last five years the company has never suffered a loss in its operation and is considered to be profitable.

In conclusion

Air Lease Corporation (AL)  has sound financial health and is profitable in the past five years. Debt is greater than equity and the leverage ratio is high at nearly 400 percent. And also, the company is investing heavily in equipment. Significantly, the management or the leaders of AL has a satisfactory strategic method in running the operation of the business for its growth and development. AL doesn’t have any expenses in lobbying. Moreover, AL has not failed in the past five years based on all the test and valuation made for AL above. As a result, I believe that Air Lease Corporation (AL) can be a good candidate for investment, therefore, I recommend a BUY on the stock of AL.

 

CITATION

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

https://www.morningstar.com/

https://finance.yahoo.com/

https://airleasecorp.com/

https://en.wikipedia.org/wiki/Air_Lease_Corporation

https://www.opensecrets.org/lobby/lookup.php

https://www.opensecrets.org/industries/alphalist.php

Researched and written by Criselda

Twitter: criseldarome

Totem’s Performance on Portfolio Was Unveiled

February 11th, 2019 Posted by Stocks Portfolio No Comment yet

 Totem’s portfolio performance was unveiled today. We have updated the overall returns we made from May 2013 to December 31, 2016.  We have monitored companies we believed were valuable and we are publicly revealing the results of returns.

Totem analyzed and scrutinized each company through our own method of filtering and leaving only the companies with value as a guide for beginners in investing.

Performance Summary of  Time-Weighted Rate of Return 

We have cracked the analysis we made as of December 31, 2016.

Period Cost Value Overall Return Days Annual return Time Weighted
5/23/2013 12/31/2013 23,711 40,593 71.20% 222 142.06% 1.095
12/31/2013 8/13/2014 73,341 93,201 27.08% 225 47.51% 1.042
8/13/2014 8/30/2014 207,206 223,509 7.87% 17 408.42% 1.001
8/30/2014 12/31/2014 223,509 211,710 -5.28% 123 6.59% 0.995
12/31/2014 3/25/2015 377,599 383,182 1.48% 84 6.59% 1.001
3/25/2015 12/2/2015 437,435 473,353 8.21% 252 12.11% 1.015
12/2/2015 12/31/2015 371,583 380,531 2.41% 29 34.92% 1.001
12/31/2015 4/12/2016 402,239 423,449 5.27% 103 19.97% 1.004
4/12/2016 5/5/2016 367,711 359,903 -2.12% 23 -28.87% 1.000
5/5/2016 5/31/2016 359,903 362,753 0.79% 26 11.71% 1.000
5/31/2016 6/30/2016 362,753 357,506 -1.45% 30 -16.24% 1.000
6/30/2016 7/31/2016 357,506 377,261 5.53% 31 88.38% 1.001
7/31/2016 8/31/2016 377,261 391,919 3.89% 31 56.64% 1.001
8/31/2016 9/30/2016 391,919 406,971 3.84% 30 58.17% 1.001
9/30/2016 10/31/2016 406,971 407,614 0.16% 31 1.88% 1.000
10/31/2016 11/30/2016 407,614 407,350 -0.06% 30 -0.79% 1.000
11/30/2016 12/31/2016 407,350 397,340 -2.46% 31 -25.39% 0.999
1318 16.17%

Following us from the beginning you probably make the same returns as we did from the list we monitored. In the next article, we will provide an updated analysis for the first quarter of 2017. We invite you to keep a watch on the articles we are posting. We will reveal the next overall analysis.

Thank you for reading.

If you want to read our previous post on blog click here.

Portfolio Return on Totem List Updated

October 28th, 2017 Posted by Stocks Portfolio No Comment yet

Portfolio Updates

Portfolio returns on the company list we monitored were updated as of August 31, 2017. We believed these companies were valuable and we publicly reveal the results of returns. We analyzed and scrutinized all these companies in the list through our own method of filtering, leaving and choosing only the companies with value. The summary of the analysis of the portfolio return is shown in the table below. 

Summary

Period Cost Value Overall return Days Annual return Time Weighted
5/23/2013 12/31/2013 23,711 40,593 71.20% 222 38.68% 1.079
12/31/2013 8/13/2014 73,341 93,201 27.08% 225 15.92% 1.035
8/13/2014 8/30/2014 207,206 223,509 7.87% 17 0.35% 1.001
8/30/2014 12/31/2014 223,509 211,710 -5.28% 123 -1.81% 0.996
12/31/2014 3/25/2015 377,599 383,182 1.48% 84 0.34% 1.001
3/25/2015 12/2/2015 437,435 473,353 8.21% 252 5.60% 1.013
12/2/2015 12/31/2015 371,583 380,531 2.41% 29 0.19% 1.000
12/31/2015 4/12/2016 402,239 423,449 5.27% 103 1.46% 1.003
4/12/2016 5/5/2016 367,711 361,724 -1.63% 23 -0.10% 1.000
5/5/2016 5/31/2016 361,724 362,590 0.24% 26 0.02% 1.000
5/31/2016 6/30/2016 362,590 357,295 -1.46% 30 -0.12% 1.000
6/30/2016 7/31/2016 357,295 377,062 5.53% 31 0.46% 1.001
7/31/2016 8/31/2016 377,062 391,718 3.89% 31 0.32% 1.001
8/31/2016 9/30/2016 391,718 406,762 3.84% 30 0.31% 1.001
9/30/2016 10/31/2016 406,762 407,371 0.15% 31 0.01% 1.000
10/31/2016 11/30/2016 407,371 407,171 -0.05% 30 0.00% 1.000
11/30/2016 12/31/2016 791,544 781,540 -1.26% 31 -0.11% 1.000
12/31/2016 1/31/2017 781,540 822,893 5.29% 31 0.44% 1.001
1/31/2017 2/28/2017 822,893 853,749 3.75% 28 0.28% 1.001
2/28/2017 3/31/2017 860,749 877,985 2.00% 31 0.17% 1.000
3/31/2017 4/30/2017 930,880 966,310 3.81% 30 0.31% 1.001
4/30/2017 5/31/2017 979,756 1,000,174 2.08% 31 0.18% 1.000
5/31/2017 6/30/2017 1,000,174 979,344 -2.08% 30 -0.17% 1.000
6/30/2017 7/31/2017 979,344 1,037,439 5.93% 31 0.49% 1.001
7/31/2017 8/31/2017 1,037,439 1,002,025 -3.41% 31 -0.29% 0.999
          1561   13.88%

Above all, if you follow us all the way from the beginning you probably make the same portfolio return of 13.88 percent. Therefore, we encourage you to keep a close watch on the companies we published. Further, it will serve as a guide in choosing companies with value in your portfolio.

Happy investing.

Thank you for reading.

Time-Weighted Rate of Return (TWRR)

July 13th, 2017 Posted by Stocks Portfolio No Comment yet

Time-Weighted Rate of Return (TWRR) on Portfolio

Time-Weighted Rate of Return (TWRR) is a method to measure the performance of the portfolio over the time period invested. The summary of the results on the portfolio list we maintained is seen below in a table. These companies we are monitoring has a recommendation of a Buy in the articles we wrote and published in the website.  Totem has started publishing articles from as early as 2012.  Each company has a recommendation for a Buy and a template was created to monitor the returns and we assumed all these companies had a 100 shares Buy from the date the article was published was also the date of purchase.

The following Cris Portfolio is one of the three portfolio lists that is being monitored, maintained and updated periodically. This is part of my training in Totem.

TWRR

Period Cost Value Overall

Return

Days Annual

Return

08-12-2012 12-31-2012 68,199 64,884 -4.86% 141 -0.40% 0.996000
12-31-2012 12-31-2013 130,528 141,587 8.47% 365 1.71% 1.017078
12-31-2013 12-31-2014 155,792 174,716 12.15% 365 2.42% 1.024157
12-31-2014 12-31-2015 160,853 183,189 13.89% 365 2.74% 1.027443
12-31-2015 08-31-2016 161,200 187,392 16.25% 244 2.12% 1.021177
08-31-2016 09-30-2016 161,200 184,224 14.28% 30 0.23% 1.002287
09-30-2016 10-31-2016 161,200 179,672 11.46% 31 0.19% 1.001920
10-31-2016 11-30-2016 161,200 184,224 14.28% 30 0.23% 1.002287
11-30-2016 12-31-2016 161,200 179,672 11.46% 31 0.19% 1.001920
12-31-2016 01-31-2017 317,069 332,186 4.77% 31 0.08% 1.000824
01-31-2017 02-28-2017 317,069 354,834 11.91% 28 0.18% 1.001799
02-28-2017 03-31-2017 317,069 371,784 17.26% 31 0.28% 1.002819
03-31-2017 04-30-2017 317,069 381,453 20.31% 30 0.32% 1.003169
04-30-2017 05-31-2017 317,069 413,624 30.45% 31 0.47% 1.004712
1753 11.24%

Furthermore,

The above table shows an overall time-weighted rate of return (TWRR) of 11.24 percent. Above all, following our recommendations from the beginning with all the companies written and published on the company’s website. Likewise, you might have the same time-weighted rate of return of 11.24 percent.

We invite you to monitor our company and investment analysis through the written articles on our website: totemtalk.com

Thank you for reading.

Lazard Ltd Shs A (LAZ) Extended Graph Analysis

June 10th, 2017 Posted by Extended Analysis No Comment yet

Lazard Company Profile

LAZ logo

Lazard Ltd Shs A (LAZ) is a financial advisory and asset management firm. The company has a diverse set of clients around the globe including corporations, governments, institutions, partnership, and individuals. The company is currently operating from 42 cities in key business and financial centers across 27 countries throughout North America, Europe, Asia, Australia, the Middle East, and Central and South America. Moreover, LAZ has 2,610 employees as of 2015.

 

 

Lazard Ltd Shs A (LAZ) Extended Graph Analysis

 A. LAZ CASH FLOW

LAZ CF

  Net cash provided by operating activities Net cash used for investing activities Net cash provided (used for) financing activities Capital expenditure Free Cash Flow
2011 397,277,000 -45,277,000 -552,359,000 -45,277,000 442,554,000
2012 481,908,000 -84,933,000 -563,220,000 -84,933,000 566,841,000
2013 526,697,000 -54,553,000 -487,072,000 -54,553,000 581,250,000
2014 736,017,000 20,099,000 -435,369,000 -20,099,000 715,918,000
2015 887,296,000 -25,952,000 -746,804,000 -25,952,000 913,248,000
2016 601,287,000 -37,653,000 -486,952,000 -37,653,000 638,940,000
2017 795,561,000 -36,015,000 -519,117,000 -36,015,000 831,576,000

Facts:

  • Cash from operating activities is $795.6 million.
  • And the cash from investing activities is -$36  million.
  • In addition, the net cash provided by (used for) financing activities is -$519 million.
  • While, capital expenditure is -$36 million.
  • Likewise, free cash flow is $831.6 million.

Explanation:

  • The five years of growth of cash from operating activities was 100 percent.
  • Net cash used for investing activities are purchases of property, plant, and equipment.
  • In addition, the net cash used for financing activities is long-term debt repayment, repurchase of treasury stock, and cash dividend payments.
  • While, capital expenditures are purchases of property, plant, and equipment.
  • Likewise, free cash flow has 88 percent growth in five years.

Interpretation

Lazard is capable of generating sufficient cash for its business operation.

Summary

Overall, Lazard is generating sufficient cash revenue for the business operation. In addition, the company was able to purchase properties, plant, and equipment for the operations. Moreover, the company was able to pay their long-term debt, repurchase treasury stock and cash dividend payments. Finally, free cash flow is growing.

B. LAZ BALANCE SHEET

LAZ BS

  Cash and Cash Equivalent Current Assets Total Assets Current Liabilities Total liabilities Equity Retained Earnings Total Debt Working Capital
2011 1,289,828,000 2,377,564,000 3,081,936,000 294,502,000 2,355,793,000 726,143,000 258,646,000 1,076,850,000 2,083,062,000
2012 1,142,684,000 2,100,632,000 2,986,893,000 273,411,000 2,417,237,000 569,656,000 182,647,000 1,076,850,000 1,827,221,000
2013 1,086,361,000 2,139,187,000 3,011,137,000 280,465,000 2,450,928,000 560,209,000 203,236,000 1,048,350,000 1,858,722,000
2014 1,274,340,000 2,487,802,000 3,332,236,000 336,178,000 2,625,492,000 706,744,000 464,655,000 1,048,350,000 2,151,624,000
2015 1,521,944,000 2,596,016,000 4,486,766,000 506,665,000 3,173,311,000 1,313,455,000 1,123,728,000 998,350,000 2,089,351,000
2016 853,887,000 1,889,508,000 4,302,303,000 587,059,000 3,001,161,000 1,301,161,000 1,058,189,000 990,488,000 1,302,449,000

Facts:

  • Cash and cash equivalent was $853.9 million in 2016.
  • And the current assets were $1.9 billion IN 2016.
  • In addition, total assets were $4.3 billion IN 2016.
  • While the current liabilities were $587 million IN 2016.
  • On the other hand, total liabilities were $3.0 billion IN 2016.
  • Moreover, retained earnings were $1.1 billion IN 2016.
  • And total equity was $1.3 billion IN 2016.
  • Rather, working capital was $1.3 billion IN 2016.
  • Total debt was $1.2 billion IN 2016.

Explanation:

  • Cash and cash equivalent have negative growth of 34 percent from 2011 at $436 million.
  • And the current assets have negative growth of 21 percent from 2011 at $488 billion.
  • Likewise, total assets have grown 40 percent in 2011 at $1.2 billion.
  • On the other hand, current liabilities increased by 99 percent from 2011 at $293 million.
  • And the total liabilities increased by 27 percent from 2011 at $645 million.
  • In addition, retained earnings had increased by 309 percent from 2011 at $800 million.
  • Similarly, total equity had increased by 79 percent from 2011 at $575 million.
  • And the working capital was erratic in movement and has decreased 37 percent from 2011 at $781 million.
  • Finally, the total debt had decreased by 8 percent from 2011 at $86 million.

Interpretation

As a result, the company is financially healthy and stable in the last six years of its business operations.

Summary

Overall, LAZ is liquid and capable of paying its short-term financial obligations using its cash and cash equivalents. Although its liability/equity ratio is 72/28 percent, respectively, meaning the company is using more of borrowed funds in its capital structures, in other words, creditors have more stake in the assets of the company than the investors. Moreover, total assets, retained earnings and equity were increasing year-over-year from 2012.

C. LAZ RATIOS

LAZ RATIOS

  Operating Margin Net Margin Return on Assets Return on Equity Asset Turnover Financial Leverage Debt to Equity
2011 12.90 9.56 5.38 25.38 0.56 4.24 1.51
2012 6.50 4.41 2.78 13.01 0.63 5.24 1.92
2013 10.90 8.07 5.34 28.36 0.66 5.38 1.90
2014 22.60 18.57 13.47 67.45 0.73 4.71 1.50
2015 -0.70 41.91 25.23 97.65 0.60 3.41 0.77
2016 22.20 16.62 8.57 30.41 0.52 3.69 0.97
2017 23.20 17.43 10.20 36.96 0.59 3.80 1.04

Facts:

  • The current operating margin is 23 percent; averaging 14 percent from 2011.
  • And the net margin was 17.43 percent; averaging 17 percent from 2011.
  • In addition, return on assets was 10.20 percent; averaging 10.14 percent from 2011.
  • Likewise, return on equity was 36.96 percent; averaging 43 percent from 2011.
  • Further, asset turnover was 0.59, averaging 0.61 from 2011.
  • And the debt to equity was 1.37; decreased by 0.47 from 2011 and averaging 1.37.
  • Financial leverage was 3.80; decreased by 0.44 from 2011 and averaging 4.35.

Explanation

  • Operating margin shows that management is efficient and shows a decent leftover on revenue after deducting operating costs.
  • And the net margin shows a decent return on revenue after deducting all expenses.
  • On the other hand, return on assets shows a return of 10 cents for every dollar invested in assets.
  • Moreover, return on equity shows a return of 37 percent on investments made in the stocks of LAZ.
  • Likewise, asset turnover shows that LAZ is generating 59 cents of net sales for every dollar invested in the assets.
  • While debt to equity shows that more assets are financed by debt than those financed by investors.
  • Hence, financial leverage is total assets over stockholders equity. LAZ uses more debt in its capital structure.

Interpretation

It indicates that LAZ is profitable, however, the company is utilizing more on borrowed funds to finance assets.

Summary

Overall, the results of ratios show that the company is profitable in its business operations and can generate a decent return on the investments made by investors. However, creditors have more stake in the assets of the company.

D. LAZ INCOME AND MARKET

LAZ INC AND MARKET

  Total Revenue Revenues, net of int expense Inc before inc taxes Net Income Intrinsic Value Market Cap
2011 1,919,638,000 1,829,512,000 235,499,000 174,917,000 1,377,240,000 3,680,180,000
2012 1,994,013,000 1,912,448,000 123,885,000 84,309,000 1,415,130,000 3,444,000,000
2013 2,064,733,000 1,985,352,000 216,807,000 160,212,000 2,237,800,000 5,472,000,000
2014 2,363,017,000 2,300,447,000 519,465,000 427,277,000 2,935,940,000 6,492,000,000
2015 2,404,767,000 2,353,608,000 -16,620,000 986,373,000 5,713,680,000 5,841,000,000
2016 2,383,663,000 2,235,055,000 517,461,000 387,698,000 6,220,410,000 5,064,000,000
2017 2,510,967,000 2,458,617,000 569,281,000 428,428,000 6,096,720,000 5,333,000,000

Facts

  • The current revenue is $2.5 billion; grown 31 percent from 2011.
  • The revenue net of interest expense was $2.46 billion; grown 24 percent from 2011.
  • Income before income taxes was $569 million; grown 142 percent from 2011.
  • Net income was $428 million; grown 145 percent in six years.
  • The current intrinsic value was $6.1 billion; grown 343 percent in six years.
  • Market capitalization was $5.3 billion; grown 45 percent in six years.

Explanation

  • Revenue is interest and dividend income.
  • Interest expense is approximately 2 percent of total revenue.
  • And the income before income taxes is 23 percent of total revenue.
  • Likewise, net income is 17 percent of the total revenue.
  • On the other hand, the Intrinsic value is increasing year-over-year at an average of 32 percent.
  • Moreover, the growth in market capitalization year-over-year was 9 percent.

Interpretation

The income statement of LAZ shows that the company is capable of generating sufficient income for its daily operation. Moreover, in 2016 and 2017 shows that the stock of LAZ is undervalued.

Summary

LAZ is efficient in generating sufficient revenue and earnings for its operations. It indicates that the company is profitable and financially stable.

E. LAZ KEY EXECUTIVE COMPENSATION

LAZ KEY EXEC COMPENSATION

  Key Executive Compensation Chairman and CEO – Kenneth M. Jacobs CEO of Lazard Asset Management – Ashish Bhutani COO and CEO, Fianancial Advisory – Alexander F. Stern General Counsel – Scott D. Hoffman
2011 40,684,344 12,461,056 11,985,709 5,238,088 3,878,514
2012 30,647,351 8,842,195 9,681,715 4,718,605 3,495,131
2013 29,836,142 8,615,321 9,628,768 4,689,013 3,255,326
2014 33,987,277 9,992,527 10,486,058 5,878,981 3,682,299
2015 37,363,585 11,679,538 10,443,083 6,806,199 4,064,935
2016 36,239,177 11,641,070 9,543,515 6,945,432 4,017,627

Facts:

  • The key executive compensation was $36 million.
  • The Chairman and CEO compensation are $ 11.6 million.
  • And the CEO of Lazard Asset Management compensation was $9.5 million.
  • In addition, the COO and CFO Financial Advisory compensation were $6.9 million.
  • Moreover, the General Counsel compensation was $4 million.

Explanation

  • The key executive compensation represents 1.5 percent of the total revenue.
  • The Chairman and CEO compensation represent 32 percent of the total key executive compensation.
  • And the CEO of Lazard Asset Management compensation represents 26 percent of the total key executive compensation.
  • While the COO and CFO Financial Advisory compensation represent 19 percent of the total key executive compensation.
  • And the General Counsel compensation represents  11 percent of the total key executive compensation.

Interpretation

The key executive compensation is composed of basic salary, bonus, restricted stock award, and other compensation.

Summary

Laz is paying its key executives a decent salary plus incentives and benefits.

 

F. LAZ LOBBYING AND CONTRIBUTIONS

LAZ LOBBY

  2012 2013 2014 2015 2016
Lobbying 0 630,000 610,000 560,000 360,000
Contributions 673,094 0 577,526 0 568,632

Facts

  • The company spent lobbying year-over-year, and in 2016 lobbying was $360,000.
  • Likewise, LAZ spent contributions and in 2016 contributions was $568.632.

Explanation

  • LAZ lobbying is spending made to candidates like Hillary Clinton and many others.
  • In addition, the contributions of $568,632 are composed of the following:
    • Contributions to candidates                           $351,148
    • Contribution to Leadership PACs                        7,900
    • Contributions to parties                                     183,584
    • Contributions to outside spending groups      26,000

Interpretations

Lazard is spending approximately 2 percent of revenue in lobbying and 2 percent of revenue in contributions.

Summary

Annually the company is spending lobbying to candidates and other figures. The company’s highest spending on lobbying was in 2009 in approximately $1 million.

G. LAZ FINANCIAL STRENGTH

LAZ FINANCIAL STRENGTH

  2011 2012 2013 2014 2015 2016 2017 2018
Score 2.99 2.81 3.68 4.12 3.09 2.91 2.98 3.05

Facts

  • The calculated score in 2011 was 2.99.
  • In 2012 score was 2.81.
  • And in 2013 score was 3.68.
  • Likewise in 2014 score was 4.12.
  • While in 2015 score was 3.09
  • Moreover, in 2016 score was 2.91
  • Future score for 2017 was 2.98
  • Finally, the future score in 2018 was 3.05

Explanation

Lazard has an erratic score from 2011. A score of above 1.8 to 3 indicates that the company might be headed to bankruptcy and a score of above 3 is considered financially stable.

Interpretation

The future score in 2018 is based on the current trend movement in 2017. It shows from 2016 to 2017 there was an upward trend in the score, therefore, the future score is up at the same ratio.

Summary

Multiple financial ratios were combined to form the score, it is a gauge of the company’s financial strength and the likelihood of bankruptcy. It indicates that LAZ is considered financially stable, although, the score in 2017 fall less than 3. The score went up from 2016, therefore, the future score is based on the current trend.

Overview

Lazard is generating sufficient cash revenue for the business operation. The company was able to purchase properties, plant, and equipment for the operations. Moreover, the company was able to pay their long-term debt, repurchase treasury stock and cash dividend payments. Above all, free cash flow is growing.

Further, Lazard is liquid and capable of paying its short-term financial obligations using its cash and cash equivalents. Although its liability/equity ratio is 72/28 percent, respectively. Meaning, LAZ is using more of borrowed funds in its capital structures. In other words, creditors have more stake in the assets of the company than the investors. In addition, total assets, retained earnings and equity were increasing year-over-year from 2012.

Furthermore,

The company shows profitability in its business operations and can generate a decent return on the investments made by investors. Moreover, the company is efficient in generating sufficient revenue and earnings for its operations. It indicates that the company is profitable and financially stable.

In addition, LAZ is paying its key executives a decent salary plus incentives and benefits. Further, the financial strength indicates that LAZ is considered financially stable, although, the score in 2017 fall less than 3, and the score went up from 2016, as a result, the future score is based on the current trend.

CITATION

https://www.sec.gov/Archives/edgar/

http://financials.morningstar.com/income-statement/is.html?t=LAZ

https://www.opensecrets.org/orgs/summary.php?id=D000035294&cycle=2016

Researched and Written by Criselda

Twitter: criseldarome

Chipotle Mexican Grill Inc Class A (CMG) Graph Analysis

May 16th, 2017 Posted by Graph Analysis No Comment yet

About the Company

CMG logo

Chipotle Mexican Grill A (CMG) is a Delaware corporation which operates 2,198 Chipotle Mexican Grill restaurants all over the United States and 29 international Chipotle restaurants. Moreover, they operate 23 restaurants in non-Chipotle concepts. The company is a public    company listed on New York Stock Exchange (NYSE) with the symbol CMG. Its initial public offering was on January 26, 2006. Chipotle Mexican Grill A was founded on July 13, 1993, 23 years ago by Steve Ells. Headquartered in Denver, Colorado, United States. The company has more than 45, 200 employees.

CMG GRAPH ANALYSIS

A. CMG CASH FLOWS

CMG CF

B. CMG BALANCE SHEET

CMG BS

C. CMG FINANCIAL RATIOS

CMG FINANCIAL RATIOS

D. CMG INCOME AND MARKET

CMG INC MRKT

E. CMG KEY EXECUTIVE COMPENSATION

CMG COMPENSATION

F. CMG FINANCIAL STRENGTH

CMG STRENGTH
Thank you for reading.

Researched and created by Criselda

Amira Nature Foods Ltd (ANFI) Graph Analysis

May 13th, 2017 Posted by Graph Analysis, Uncategorized No Comment yet

About the Company

ANFI logo

 

 

 

 

Amira Nature Foods Ltd (ANFI) is an international producer of packaged foods, Indian specialty Basmati rice with its more than 200 related food products. The company’s key products are rice, organic ingredients, pulses, oil, and spices. Amira Nature Foods Ltd is founded in 1915 by B. D. Chanana and headquartered in the United Arab Emirates. The company’s initial public offering was on October 10, 2012,  under New York Stock Exchange (NYSE) with the company symbol ANFI.

A. ANFI CASH FLOWS

ANFI CF

B. ANFI BALANCE SHEET

ANFI BS

C. ANFI FINANCIAL RATIOS

ANFI RATIOS

D. ANFI INCOME AND MARKET

ANFI INCOME AND MARKET

E. ANFI FINANCIAL STRENGTH

ANFI STRENGTH

F. ANFI KEY EXECUTIVE COMPENSATION

ANFI COMPENSATION

 

Researched and Written by Criselda

Twitter: criseldarome

Cherokee Inc (CHKE) Graph Analysis

May 11th, 2017 Posted by Graph Analysis No Comment yet

cherokee-inc-chkeCherokee Inc is an international brand marketing platform which manages the portfolio of fashion and lifestyle brands. Moreover, the company manages licenses and franchise agreements with retailers and manufacturers over 110 countries around the globe. Cherokee Inc was founded in 1973 by James Argyropoulos and was incorporated on May 17, 1988. The company was headquartered in Sherman Oaks, California, United States. Cherokee Inc initial public offering was on June 11, 1993, under NASDAQ with ticker symbol CHKE.

A. CASH FLOW

CHKE CF

B. BALANCE SHEET

CHKE BS

C. FINANCIAL RATIOS

CHKE RATIO

D. INCOME AND MARKET

CHKE INC AND MARKET

E. CHKE KEY EXECUTIVE COMPENSATION

CHKE COMPENSATION

F. FINANCIAL STRENGTH

CHKE STRENGTH

Thank you.

Researched and Created by Criselda

Twitter: criseldarome

C

Buckle Inc (BKE) Graph Analysis

May 4th, 2017 Posted by Graph Analysis No Comment yet

About the Company

BuckleBuckle Inc is a retailer of casual apparel, footwear, and accessories for fashion-conscious young men and women. The company markets a wide selection of brand names and private label casual apparel. It includes denim, other casual bottoms, tops, sportswear, outerwear, accessories, and footwear. Further, they operate in 450 stores in 44 states. Founded in 1948 by David Hirschfield. The company is headquartered in Kearney, Nebraska, United States.  Furthermore, it began as Mills Clothing, a men’s clothing store.

 

 

 

 

BKE GRAPH ANALYSIS

A. BKE CASH FLOWS

BKE CF

B. BKE BALANCE SHEET

BKE BS

C. BKE FINANCIAL RATIOS

BKE FINANCIAL RATIOS

D. BKE INCOME AND MARKET

BKE INC MRKT

E. BKE KEY EXECUTIVE COMPENSATION

BKE COMPENSATION

F. BKE FINANCIAL STRENGTH

BKE STRENGTH

 

Researched and written by Criselda

Twitter: criseldarome

Vera Bradley Inc (VRA) Graph Analysis

April 28th, 2017 Posted by Graph Analysis No Comment yet

Vera BradleyVera Bradley Inc (VRA) is a leading designer of luggage, handbags, accessories, travel and gift items. Founded by Barbara Bradley Baekgaard and Patricia R. Miller in 1982.  The company was incorporated on June 23, 2010, and headquartered in Fort Wayne, Indiana, United States. The company is listed on NASDAQ with company symbol VRA on October 2010.          

            

A. VRA CASH FLOW

VRA CASH FLOW

B. VRA BALANCE SHEET

VRA BS

C. VRA INCOME AND MARKET

VRA INC

D. VRA RATIOS

VRA RATIOS

E. VRA KEY EXECUTIVE COMPENSATION

VRA COMPENSATION

F. VRA FINANCIAL STRENGTH

VRA STRENGTH

Thank you.

Researched and created by Criselda

Twitter: criseldarome

YY Inc (YY) Graph Analysis

April 25th, 2017 Posted by Graph Analysis No Comment yet

About the Company

YY Inc

 

 

 

YY Inc (YY) is one of the major live streaming social media platforms in China.  The company is leading in active monthly and daily users and total time spent by users compared to its industry peers. It engages users to communicate in real-time online group activities through voice, text, and video. YY Inc was incorporated on July 22, 2011. The company was listed on NASDAQ in November 2012 with company symbol YY.

A. YY CASH FLOWS

YY CF

B. YY BALANCE SHEET

YY BS

C. YY FINANCIAL RATIOS

YY RATIOS

D. YY INCOME AND MARKET

YY Inc

E. YY FINANCIAL STRENGTH

YY Strength

Researched and created by Criselda

Twitter: criseldarome

Another New Challenge for ITT Educational Services Inc (ESI)

July 22nd, 2016 Posted by Company Updates No Comment yet

itt-tech-esi

ITT Educational Services Inc (ESI) received a letter from the US Department of Education (ED)

ED required ITT Tech to increase its existing guarantee of $79.7 million to $123.6 million. ESI have to comply within 45 days from the date of the ED letter to provide the Additional Amount of $43,938,303. This is either cash or letter of credit.

ESI had submitted a letter of credit for $79.7 million which is termed “ED Letter of Credit” in the beginning. The agreement was termed “ED Agreement” on December 16, 2015. Furthermore, with ED to maintain an escrow account, the “ED Escrowed Funds” until November 4, 2019.

The Problem

“Will the company be able to provide the required additional amount?” I think they can because Cerberus Business Finance LLC could finance their financial needs. Although ESI had originally borrowed $100,000 million, ESI was able to pay and the half of it with a balance $50,505 million as of March 31, 2016. In addition, ESI expects a $0 balance on December 31, 2016. The future cash earnings of ESI are already set for payment of their current obligations. Therefore it becomes a challenge for them to pay the additional escrow.  

ITT Tech SEC 8K Filing Report

Quoted from SEC 8k:

“The Financing Agreement entered into among the Company, Cerberus Business Finance LLC, as collateral agent and administrative agent, and the lenders’ party thereto (as amended, the “Financing Agreement”) permits the Company to incur certain types of indebtedness. Permitted indebtedness under the Financing Agreement includes indebtedness in respect of cash collateral under the ED Agreement in an aggregate amount not exceeding $120,000,000 at any time outstanding, as well as other indebtedness in an aggregate amount not exceeding $17,500,000 at any time outstanding, which amount is not currently represented by any existing type of indebtedness. Based on these permitted types and amounts of indebtedness, the Company does not believe that the Additional Amount, when provided, will constitute a default under the Financing Agreement.”

In conclusion,

The possible effect of the regulation imposed by ED could materially affect its liquidity. The company’s current situation, there is no certainty that they could fund the Additional Amount. However, through Cerberus Business Finance LLC they might be able to meet its obligation with the DOE.

To view the research report of ITT Tech please click here.

Research and Written by Criselda

 

 

Interested to learn more about the company? Here’s investment valuation for a quick view, company research to know more of its background and history; and value investing guide for the financial status.

Keenly Monitoring List Of Companies To Keep Close Watch On

April 12th, 2016 Posted by Stock to Watch No Comment yet

Keenly monitoring list of companies. Totem focuses on different methods of filtering good companies from the US market. Moreover, we used fundamental analysis and other methods to value the companies.

Totem’s color-code:

Green To Buy
No color To Hold
Red To Sell

Evergreen –        Hold for five (5) years or more. Totem has classified its portfolio into the following categories:

Woody –              Similar to evergreen but will not reduce the holdings even if the company’s stock is fully priced. These are great growth companies in the process of maturing.

Deciduous –       Hold for two (2) to five (5) years. These are companies falling off after the stage of growth

Monocarpic –     Hold for one (1) or two (2) years. These are companies once profitable and then die.

Keenly Monitoring list of  Companies:

Rank Symbol Company Name Sub Type
1 AVG AVG Technologies NV List Deciduous
2 KORS Michael Kors Holdings Ltd List Deciduous
3 QIWI Qiwi PLC List Deciduous
4 BIDU Baidu Inc ADR List Deciduous
5 PCLN Priceline Group Inc List Deciduous
6 AAPL Apple Inc List Deciduous
7 LOPE Grand Canyon Education Inc List Deciduous
8 FSLR First Solar Inc List Deciduous
9 HFC HolyFrontier Corp List Deciduous
10 SB Safe Bulkers Inc Cream Monocarpic
11 ESI ITT educational Inc Cream  Monocarpic
12 AHGP Alliance Holdings GP LP List Monocarpic
13 ADS Alliance Data System Corp List Monocarpic
14 EMES Emerge Energy Services LP List Monocarpic
15 FHCO The Female Health Co. List Monocarpic
16 LYB LyondellBasell Industries NV List NP
17 VIPS Vipshop Holdings Ltd ADR A List NP
18 COH Coach Inc List NP
19 ROST Ross Stores Inc List NP
20 FB Facebook Inc List NP
21 SILC Silicom List NP
22 CTSH Cognizant Technology Solutions Corp List NP
23 TTC Toro Co List NP
24 CMI Cummins Inc List NP
25 BHP BHP Billiton Limited (ADR) List NP
26 WRLD World Acceptance Corp Cream NP
27 ATI Allegheny Technologies Incorporated Cream NP
28 FSTR L.B. Foster Co Cream NP
29 NUS Nu Skin Enterprises Inc List NP
30 TCK Teck Resources Ltd Class B Cream NP
31 TCPI TCP International Holdings Ltd Cream NP
32 FCX Freeport McMoran Inc List NP
33 SCHN Schnitzer Steel Industries Cream  NP
34 GRPN Groupon Inc List NP

We periodically updating and monitoring the current changes and filtering these companies. Therefore, it gives you a glimpse of the company’s status and current performance. Furthermore, it will serve as your guide.

Thank you for reading.

Written by Criselda

Twitter: criseldarome

Emerge Energy Services LP (EMES) Making Money Out Of Sand?

January 8th, 2016 Posted by Deep Analysis No Comment yet

Emerge Energy Services LP (EMES)

Emerge Energy Services LP

Emerge Energy Services LP’s stock has fallen since the announcement of dividend suspension in October 2015. The lowest stock price was on October 27, 2015, at $3.87 per share. Because of economic slowdown, the oil and gas industry has suffered a setback and so the frackers. Consequently, if the oil industry recovers, the frackers will progress again. Although Emerge is generating more revenue year over year, the company’s debt is also increasing year over year. Emerge is using borrowed funds more than the investor’s investment for their business operations.  Furthermore, the company’s cash and cash equivalent represents 1.5 percent of the total assets.

A Question of Liquidity

The company’s liquidity is a concern and the question asked, “Would Emerge be able to pay its obligations in due date in the future? The balance sheet shows that Emerge has good liquidity ratios hence, it has a sound balance sheet. The income statement has not seen any negative earnings from 2012 to 2014. Emerge Energy Services LP has an incredible yield of 73.96 percent and also payout ratio of 432.4 percent. As a result, the valuation shows that Emerge is worth a lot more than its current market price today. Probably, this is the right time to buy.  Let’s find out.

Problem

As a result of fracking, Emerge is involved in a legal dispute.  They use hydraulic fracturing or fracking to extract oil and natural gas from deep under the earth. Hydraulic fracturing or fracking is the process of drilling and injecting fluid into the ground at high pressure in order to fracture shale rocks to release natural gas inside. Furthermore, the environmentalist believed that this process creates environmental and also health risks.  

Effect

The fracking process could be dangerous to the environment and therefore, may contribute to health risks within the community. The process may affect groundwater and rather can cause pollution hazards according to the book, “What’s the fracking problem? Hydraulic fracturing, silica sand, and issues of regulation”, page 639. On the other hand, although, the extraction of the silica sand can provide employment and also has economic benefits.

The Process

  • To the site. Each gas well requires an average of 400 tanker trucks to carry water and supplies to and from the site.
  • Heavy Load. It takes 1 to 8 million gallons of water to complete each fracturing job.
  • Fracturing Fluid. Up to 600 chemicals are used in fracking fluid, including carcinogens and also toxins such as uranium, mercury, ethylene glycol, methanol, hydrochloric acid and also formaldehyde.
  • Down 10,000ft, the fracking fluid is then pressure injected into the ground through a drilled pipeline.
  • The Math.

500,000 active gas well in the US x 8 million gallons of water per fracking x

18 times a well can be fracked 

= 72 trillion gallons of water and 360 billion gallons of chemicals that are needed to run the current gas wells.

Characteristics in Fracking

  • Shale fracturing. The mixture reaches the end of the well where the high pressure causes the nearby shale rock to crack, hence creating fissures where natural gas flows into the well.
  • Gravity.
  • Contamination. During this process, methane gas and toxic chemicals leach out from the system and therefore contaminate nearby groundwater. Furthermore, Methane concentration is 17 times higher in drinking water wells near fracturing sites than in normal wells.
  • Drinking Water. Contaminated drinking water is us