ViacomCBS Inc Class A (VIACA) Extended Graph Analysis

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

Company Profile

VIAC logo

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

VIACA CASH FLOW

2015 2016 2017 2018 2019 TTM
Net cash flow provided by operating activitIes 1,390,000,000 1,690,000,000 890,000,000 1,430,000,000 1,230,000,000 2,106,000,000
Net cash used for investing activities 150,000,000 -340,000,000 -550,000,000 -350,000,000 160,000,000 -980,000,000
Net cash provided by (used for) financing activities -1,650,000,000 -1,050,000,000 -680,000,000 920,000,000 -1,220,000,000 -90,000,000
Capital expenditure -193,000,000 -196,000,000 -185,000,000 -165,000,000 -353,000,000 -315,000,000
Free cash flow 1,201,000,000 1,489,000,000 702,000,000 1,261,000,000 877,000,000 1,791,000,000
Working Capital 2,187,000,000 2,355,000,000 2,301,000,000 2,179,000,000 2,854,000,000 2,854,000,000

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

VIACA BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 320,000,000 600,000,000 290,000,000 320,000,000 630,000,000
Current Assets 5,750,000,000 6,060,000,000 6,270,000,000 6,750,000,000 11,900,000,000
Net property, plant and equipment 1,410,000,000 1,240,000,000 1,280,000,000 1,210,000,000 4,020,000,000
Total non-current assets 18,020,000,000 18,180,000,000 14,570,000,000 15,110,000,000 37,620,000,000
Total assets 23,770,000,000 24,240,000,000 20,840,000,000 21,860,000,000 49,520,000,000
Current liabilities 3,560,000,000 3,710,000,000 3,970,000,000 4,570,000,000 9,050,000,000
Non-current liabilities 14,640,000,000 16,840,000,000 14,890,000,000 14,480,000,000 27,180,000,000
Total liabilities 18,200,000,000 20,550,000,000 18,870,000,000 19,060,000,000 36,230,000,000
Retained earnings -20,520,000,000 -19,260,000,000 18,900,000,000 -17,200,000,000 8,490,000,000
Stockholders equity 5,560,000,000 3,690,000,000 1,980,000,000 2,800,000,000 13,290,000,000

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

VIACA INCOME AND MARKET

2015 2016 2017 2018 2019 TTM
Revenue 13,886,000,000 13,166,000,000 13,692,000,000 14,514,000,000 27,812,000,000 25,931,000,000
EBIT 2,843,000,000 2,659,000,000 2,486,000,000 2,963,000,000 4,499,000,000 4,086,000,000
Net Income 1,413,000,000 1,261,000,000 357,000,000 1,960,000,000 3,308,000,000 1,354,000,000
EBITDA 2,680,000,000 2,870,000,000 2,660,000,000 2,980,000,000 4,750,000,000 3,450,000,000
Market Capitalization 22,899,870,000 28,896,000,000 38,341,220,000 26,957,610,000 25,593,160,000 18,047,250,000
Intrinsic Value 60,253,363,615 91,768,886,958 63,826,563,093 155,231,186,960 169,391,370,690 49,558,938,657

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

VIACA FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Asset turnover (average) 0.58 0.55 0.61 0.68 0.78 0.68
Return on assets % 5.91 5.25 1.58 9.18 9.27 3.57
Return on equity % 22.55 27.26 12.6 81.97 41.32 13.91
Return on invested capital % 11.91 11.33 4.95 18.5 16.94 8.24
Debt/Equity 1.48 2.41 4.78 3.38 1.51 1.48

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

VIACA KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 650,000 1,050,330
Bonus 750,000 4,258,397
Annual Other Income
Restricted Stock Award 419,894 9,499,834
Securities Options 200,000
LTIP Payout
Non-Equity Compensation
Other Compensation 37,699 454,543
Total 2,137,583 15,263,164
Robert M. Bakish – Director, President, and CEO
Salary 230,769
Bonus 3,123,664
Annual Other Income
Restricted Stock Award 4,999,997
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation 10,955
Total 0 8,365,385
Naveen Chopra – EVP and CFO
Salary
Bonus
Annual Other Income
Restricted Stock Award
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 0
Richard M. Jones – EVP, General Tax Counsel, and Chief Veteran Officer
Salary 650,000 677,884
Bonus 750,000 675,000
Annual Other Income
Restricted Stock Award 419,894 1,499,924
Securities Options 200,000
LTIP Payout
Non-Equity Compensation
Other Compensation 37,699
Total 2,137,593 3,290,891
Nancy R. Phillips – EVP and Chief People Officer
Salary 57,692
Bonus 66,126
Annual Other Income
Restricted Stock Award 2,999,973
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 3,123,791
Christa D. D’Almonte – EVP, General Counsel, and Secretary
Salary 83,985
Bonus 393,607
Annual Other Income
Restricted Stock Award
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation 5,505
Total 0 483,097
Katherine Gil Charest – EVP, Controller and Chief Accounting Officer
Salary
Bonus
Annual Other Income
Restricted Stock Award
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 0
Doretha F. Lea – EVP, Global Public Policy and Government Relations
Salary
Bonus
Annual Other Income
Restricted Stock Award
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 0
Julia Phelps – EVP, Chief Communication and Corporate Marketing Officer
Salary
Bonus
Annual Other Income
Restricted Stock Award
Securities Options
LTIP Payout
Non-Equity Compensation
Other Compensation
Total 0 0

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

VIACA LOBBYING AND CONTRIBUTIONS

1998 $1,000,000
1999 $1,000,000
2000 $1,000,000
2001 $1,000,000
2002 $1,000,000
2003 $1,250,000
2004 $1,400,000
2005 $1,400,000
2006 $1,475,000
2007 $1,580,000
2008 $3,360,000
2009 $1,840,000
2010 $3,640,000
2011 $3,030,000
2012 $2,720,000
2013 $2,450,000
2014 $3,060,000
2015 $3,570,000
2016 $3,971,000
2017 $4,108,790
2018 $3,568,290
2019 $2,957,060
2020 $2,878,000

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

VIACA FINANCIAL STRENGTH

DATA:

Working Capital $2,854,000,000
Total Assets $49,520,000,000
Sales $25,931,000,000
EBIT $4,086,000,000
Market value of equity $21,474,000,000
Book value of total liabilities $36,230,000,000
Retained earnings $8,490,000,000

CALCULATIONS

Ratio Score Result
A – Working Capital / Total Assets 0.06 1.20 0.07
B – Retained Earnings / Total Assets 0.17 1.40 0.24
C – EBIT / Total Assets 0.16 3.30 0.52
D – Market Value of Equity / Book Value of Total Liabilities 0.59 0.60 0.36
E – Sales / Total Assets 0.52 1.00 0.52
Z-Score 1.71

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

 

No comments yet. You should be kind and add one!

Leave a Reply

Your email address will not be published.This is a required field!

You may use these HTML tags and attributes:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Note:

Research Reports can be found under the company tab.