Company Profile

ViacomCBS Inc Class A is a diversified global media and entertainment American company. Founded on December 4, 2019, and headquartered in New York, New York, United States. The company was founded by Shari Redstone. According to Bloomberg, VIACA provides television and radio stations, produces and syndicates television programs, broadcasting, publishes books, and online content, as well as provides outdoor advertising. ViacomCBS serves clients worldwide.

ViacomCBS Inc Class A (VIACA) Extended Graph Analysis

1. VIACA CASH FLOW

Facts:

• Cash from operating activities was $2.1 billion in the trailing twelve months.
• Net cash used for investing activities was -$980 million.
• Cash provided by (used for) financing activities was -$90 million.
• Capital expenditure was -$315 million.
• Free cash flow was 1.791 billion.
• Working capital was $2.854 billion.

Explanation

• Cash from operating activities has a growth of 52 percent in five years.
• Cash from investing activities were capital expenditures, purchases, and acquisition of business, purchase, and sale of investment, purchase, and sale of equity
• Cash from financing activities was issuance and payments for common stock, issuance and repayments for short-term debt proceeds from the issuance, and repayments for long-term debt.
• Free cash flow has a growth of 49 percent in five years.
• Working capital grew 31 percent.

Interpretation

The management is efficient in generating a positive cash flow from operations in the period of five years.

2. VIACA BALANCE SHEET

Facts:

• Total cash was $630 million in 2019.
• Current assets were $11.900 billion.
• Net property, plant, and equipment were $4.020 billion.
• Total non-current assets were $37.620 billion.
• Total assets were $49.520 billion.
• Current liabilities were $9 billion.
• Non-current liabilities were $27.180 billion.
• Total liabilities were $36.230 billion.
• Retained earnings were $8.490 billion.
• Stockholders’ equity was $13.290 billion.

Explanation

• Total cash represents 5 percent of the total current assets.
• Current assets represent 24 percent of the total assets.
• Net property, plant, and equipment represent 8 percent of the total assets.
• Total non-current assets represent 76 percent of the total assets.
• Current assets doubled in five years.
• Current liabilities represent 25 percent of the total liabilities.
• Non-current liabilities represent 75 percent of the total liabilities.
• Total liabilities represent 73 percent of the total liabilities and stockholders’ equity.
• Retained earnings represent 64 percent of total stockholders’ equity.
• Stockholders’ equity represents 27 percent of the total liabilities and stockholders’ equity.

Interpretation

 The balance sheet of VIACA was stable and liquid in the last five years. The company managed effectively in leveraging. However, the creditors have more stake than that of the stockholders with a ratio of 73/27 or 270.37%. 

3. VIACA INCOME AND MARKET

Facts:

• Total revenue was $25.931 billion in the trailing twelve months.
• EBIT was $4.086 billion in the trailing twelve months.
• Net income was $1.354 billion.
• EBITDA was $3.450 billion in the trailing twelve months.
• Market capitalization was $18.047 billion.
• The intrinsic value was $49.559 billion.

Explanation

• Total revenue has a growth of 87 percent in five years.
• EBIT represents 16 percent of revenue.
• Net income represents 5 percent of the total revenue.
• EBITDA represents 13 percent of the total revenue.
• Market capitalization decreased by 21 percent in five years.
• The intrinsic value decreased 22 percent in five years.

Interpretation

Revenue declined 7 percent from 2019 to the trailing twelve months, however, the company’s bottom line was positive in the last five years. The management was able to produce an acceptable bottom line. The intrinsic value was higher than the market capitalization meaning there is a margin of safety in buying the stock of VIACA.

 4. VIACA FINANCIAL RATIOS

Facts:

• Asset turnover was averaging 0.68 ratios.
• Return on assets was 3.57 percent.
• Return on equity was 13.91 percent.
• Return on invested capital was 8.24 percent.
• The debt/Equity ratio was 1.48.

Explanation

• Asset turnover indicates that for every dollar in asset the company generated 68 cents in sales.
• Return on assets indicates that for every dollar invested in assets, the company generated 3.57 cents in net income.
• Return on equity indicates that for every dollar invested in equity it generated a $13.91 net income.
• Return on invested capital indicates that the company made $082 of return on capital investment.
• The debt to equity ratio indicates that the company uses $1.48 in debt for every dollar in equity. The debt level is 148 percent.

Interpretation

Financial ratios show an acceptable return on investment in assets and equity. Debt to equity indicates that the company uses more loans than the investor’s investment.

5. VIACA KEY EXECUTIVE COMPENSATION

Facts:

• Total key executive compensation was $15,263,164 in 2019.
• The total compensation of Robert M. Bakish – Director, President, and CEO was $8,365,385.
• Compensation of Richard M. Jones – EVP, General Tax Counsel, and Chief Veteran Officer was $3,290,891.
• Compensation of Nancy R. Phillips – EVP and Chief People Officer was $3,123,791.
• Key executive compensation of Christa D’Alimonte – EVP, General Counsel, and Secretary was $483,097.

Explanation

• The compensation of Robert M. Bakish – Director, President, and CEO represents 55 percent of the total key executive compensation.
• Compensation of Richard M. Jones – EVP, General Tax Counsel, and Chief Veteran Officer represent 22 percent of the total key executive compensation.
• The total compensation of  Nancy R. Phillips – EVP and Chief People Officer represents 20 percent of the total key executive compensation.
• The total compensation of Christa D’Alimonte – EVP, General Counsel, and Secretary represents 3.17 percent of the total compensation.

Interpretation

Total compensation includes salary, bonus, annual other income, restricted stock award, securities options, LTIP payout, non-equity compensation, and other compensation.

6. VIACA LOBBYING AND CONTRIBUTIONS

Facts:

The company has been lobbying and contributing expenditures since 1998 to politicians.

Explanations

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

NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on October 23, 2020, and includes spending from January 1 – September 30. Prior years include spending from January through December.

Interpretation

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

7. VIACA FINANCIAL STRENGTH

DATA:

CALCULATIONS

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

Explanation:

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

Interpretation

The Z-score of VIACA  was not impressed with a score of 1.80. According to Dr. Altman, a score of 0 – 1.8 indicates that the company will likely declare bankruptcy in the future. The data above show that the market value of equity was lesser than the book value of the liabilities, the result was not impressive.

OVERVIEW

The balance sheet of VIACA was liquid and stable, the company is utilizing more of the creditor’s money than that of the investor’s investment in equity with a ratio of 73/27.  Net income represents 5 percent of the total revenue which is acceptable. Market capitalization declined 29 percent from 2019 to the trailing twelve months. The intrinsic value was higher than the market capitalization, therefore, there is a margin of safety in buying the stock of ViacomCBS Inc Class A.

CITATION

https://www.opensecrets.org/federal-lobbying/firms/lobbyists?cycle=2020&id=D000000190

https://www.viacomcbs.com/about

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

Researched and written by Criselda