dear i want to do a report for my financial project, the report should contains

company as introduction, and analyze some ratios and some recommendation.

FIN 600: Advanced Financial Management Summer 2016 Prof. Miroslav Mateev PROJECT CHEVRON Co. Student name 1 Student name 2 Student name 3 Student name 4 2 Content: Executive Summary 3 The Industry 4 History 4 Challenges 4 Outlook 4 Current Position 5 Influences 5 The company 6 Challenges 7 Time Trend, Peer Group Analysis 8 Liquidity 9 Asset Management 9 Debt Management 11 Profitability 12 Market Value Evaluation 13 Free Cash Flow and Net Cash Flow 14 Conclusion 15 References 16 2 3 Executive Summary Chevron Co. is a well-established operating mainly in the oil, gas and geothermal industries. It is known for its excellent performance, great achievements, and well-functioning operating process over the years. Even though, Chevron's headquarters is in San Ramon, California, it successfully runs in more than 180 different countries taking a good care of its workers, shareholders, partners and clients. The industry in which Chevron Co. operates is risky and fluctuates a lot depending on many internal and external factors such as micro and macro downturns, demographics, government regulations, etc. The recent challenges that the industry has faced were connected to climate changes, growing energy demand, finding raw materials, global economic crisis of 2007 and some others. Currently, company's performance is mostly depended on prices of raw materials. However, disregard the outside pressure, Chevron Co. is withstanding all the downwards of the industry and performs well comparing to its close industry competitors such as Shell and Exxon. According to the following financial analysis, Chevron has a strong position on the market due to its low reliance on debt, stable performance of DSO ratio, and wise use of assets. However, the Free Cash Flow is not showing positive changes over the resent years, the analysts come to the conclusion that it is a temporary decline due to the recent industry difficulties, mainly oil price drops. Overall, Chevron Co. can be considered as not riskless, but worthy investment with great perspectives in the future. 3 4 The Industry Chevron operates in the energy sector. It deals with the mining and refinery of oil gas and petrol product. This sector, by itself includes all of the other industries involved in the production, and sale of energy. Hence, it is a vital part of the infrastructure and maintenance of society in all countries. History The history of the energy sector could be divided into two parts: before the industrial revolution and after. The Industrial Revolution marked a major change in the way people obtained energy. It was a significant leap from animal generated power, for example, into an industrialized way of attaining energy. The official start was marked by the creation of the first commercial steam engine by Thomas Newcomen in 1712.1 Wind and water were substituted with coal and steam engines. The energy sector has gone a long way, but it has always an essential part of people's lives as it plays a vital role in the development and sustainability of countries worldwide. The efficient management of this sector would benefit every society, as it is present in almost every aspect of people's lives: transportation, agriculture, waste collection, information technology, communications, etc. Challenges Although the Industrial Revolution brought many positive changes to the energy sector, it also came along with some challenges. Overall demand increased significantly, which, generally accepted as a positive feature, in this case, also brought a number of serious problems. Some of the biggest challenges the energy industry faces are: climate change (global warming), ever growing demand for energy, thus threatening sustainability, energy security, finding new raw materials, etc. One of the main issues is global warming, where major action is required to mitigate it. One way of dealing with this problem would be the reducing of the greenhouse gas emissions released by traffic and transport.2 Outlook The most authoritative source of estimating the outlook of the energy sector is the annual World Energy Outlook (WEO) issued by the International Energy Agency. In its 2013 edition, it forecasted the rise of global energy demand by one - third by 2035. 3 Overall, the WEO for 2013 underlined three key areas of critical importance to energy and climate trends. First, the achievement of universal energy access, second, the developments in subsidies to fossil fuels and renewables, and last but not least the impact of energy use on climate change.4 In its 2014 edition, the WEO forecasts a rapid evolvement of the world energy sector, which will: 1 http://environ.andrew.cmu.edu/m3/s3/01history.shtml 2 "Climate Change and Human Health RISKS AND RESPONSES." (2003). Web. 3 World Energy Outlook 2013. Paris: OECD/IEA, 2013. Print. 4 World Energy Outlook 2013. Paris: OECD/IEA, 2013. Print. 4 5 \"reshape long - held expectations for our energy future\". 5Another reliable source of analyzing the energy industry outlook is the Annual Energy Outlook issued by the U.S. Energy Information Administration.6 Although its main focus is the U.S. energy industry, the report has some interesting points. Some of its highlights include the significant increase in the usage of crude oil (9.6 million barrels per day), the decrease of imported fuels in the U.S., and the higher natural gas production. Overall, the analysis tries to convince the reader that the U.S. energy sector is flourishing as imports are decreasing and exports are increasing. Current Position Currently the energy industry is considered to be in the late-cycle phase, which has duration of, on average, a year and a half. In this phase, the overall stock market performance of the energy sector is \"a little over 5% on an annualized basis\".(Web, October 2014) Plus, as the energy sector is closely tied to the prices of raw materials, a pattern of outperformance is seen in the energy sector during the late business phase. As the average or median relative performance increase, an increase of the cycle-hit rates is also noticed. Therefore, as the economic recovery matures, the energy sector, whose fate is closely tied to the prices of raw materials, previously have done well as inflationary pressures build and the late-cycle economic expansion helps maintain solid demand. Moreover, the energy sector has seen the most convincing patterns of outperformance in the late cycle. With its high average and median relative performance along with a high cycle hit rate.7 Influences The energy industry is highly susceptible to all kinds of changes in the environment. Some of the key factors influencing it are the micro and macroeconomic downturns, demographics, and government regulations. The economic and political instability are also of high importance to the sector as they can lead to an energy crisis. Examples of such cases are the 1973 oil crisis and the 1979 oil crisis. The recent economic crisis from 2007-2008 has profoundly affected the industry. The sharp decrease in investments has led to a decrease in the demand.8 Thus, the overall investment in energy supply is likely to be reduced substantially in the next few years. It could be concluded, that the economic downturn from the recent years has had a huge impact on the energy sector. Demographics changes also play an important role in the energy industry. According to a recent WWF report, human population is currently consuming an average of 25% more natural resources 5 World Energy Outlook 2013. Paris: OECD/IEA, 2014. Print. 6 "U.S. Energy Information Administration - EIA - Independent Statistics and Analysis." Annual Energy Outlook 2014. U.S. Energy Information Administration, 1 Apr. 2014. Web. 18 Oct. 2014. . 7 "Sector Details - Business Cycle - Fidelity." Sector Details - Business Cycle - Fidelity. Web. 5 Oct. 2014. 8 "Global Financial Crisis Portal - Latest News, Articles, Analysis and More..." World Oil Crisis. Global Financial Crisis Portal. Web. 5 Oct. 2014. . 5 6 than the industry can afford to produce. The report states that by 2050 the global population will be a little bit over 9 billion people, which means that if consumption rates keep growing at the same rates as now, we will need the biological capacity of two Earths in order to sustain it. Overpopulation will put pressure on natural resources as it will lead to an increase of the consumption of finite resources such as oil. Thus, as the energy sector is based on natural and finite resources, a consumption increase of such a scale will only lead to inefficient sustainability. 9 Government regulations are another factor driving the energy sector. Through different regulations, governments have been trying to protect the environment and to contribute for the more efficient management of the energy sector. Such examples could be the Climate Change Agreement (CCAs) and the EU Emissions Trading System (EU ETS).10 The company Chevron began working on Sept. 10, 1879 when a group of merchants established the Pacific Coast Oil Co. The company's name has changed a few times since then and currently it is Chevron Co but throughout the years Chevron has joined with other companies and they have grown from a San Francisco based company with a five stake market to a major corporation whose subsidiaries conduct business worldwide. Chevron's headquarters is in San Ramon, California and it operates in more than 180 countries. It has a really strong network of retail gas stations including Chevron, Texaco, and Caltex. Chevron has a has a 15 percent market share in automotive fuels, a 20 percent market share in aviation fuel and a 15 percent market share in lubricants. The company operates mainly in the oil, gas and geothermal energy industries. Being the second largest energy company in the U.S., Chevron was ranked third in the Fortune Global 500 - 2014 list of the world's largest companies. According to the publication, Chevron marked a 5.4 % decrease in total revenue for 2013 to $228.9 billion.11 Chevron's CEO John Watson has stated in the same publication that this decrease was due to the: \"lower global crude oil prices and refining margins as fewer asset sale gains and higher expenses.\" However, as the company has marked some progress with its projects in Australia and the Gulf of Mexico, the senior executive 9"Demography - Challenges and Opportunities in a Changing World." Research Paper (2011): 5. Sustainable & Responsible Investments (SRI). Web. 10 "Reducing Demand for Energy from Industry, Businesses and the Public Sector." CRC Energy Efficiency Scheme. Web. 18 Oct. 2014. 11 Chevron in Fortune 500." Fortune 500. Time Inc, 1 Jan. 2014. Web. 18 Oct. 2014. 6 7 assures that production and profit will increase in 2015. Some of the main financials of the company include: As noted above, Chevron is a vertically integrated company, meaning that its operations span from oil production to mining and petrochemical manufacturing and refining. Thus, it has its upstream and downstream operations. Some of Chevron upstream operations include: exploring for, developing, and producing crude oil and natural gas. The downstream operations, on the other hand, include: refining of crude oil, marketing, and transportation of finished petroleum products. Nevertheless, it is clear that Chevron is investing more in its upstream business than it its downstream one. Its 2011 capital expenditure budget of $26 billion, which represents an increase of 20% over 2010, is divided between the upstream business (87% of the budget) and the downstream business (11% of the budget). Thus, it could be said that Chevron is focusing more heavily on the more profitable upstream business, which includes oil exploration and production.12 Chevron's most recent capital structure consists of 13.3 % debt and 86.7% equity: 13 Challenges: Despite its efforts for operational excellency, Chevron has faced a lot of challenges in the past few years. The energy sector overall, could be accepted as an inherently risky one to be operating in due to the harnessing fossil fuels. Therefore, one of Chevron main goals has always been the safety of the employees, suppliers and the environment overall. However, keeping more than 64, 500 employees, 200, 000 contractors and the overall environment healthy and safe turned out to be an extremely difficult task for the company. 14 As a result, currently the company is subject to strict environmental restrictions and has faced litigation for environmental contamination. Chevron is involved in an ongoing lawsuit for contaminating the Ecuadorian Amazon rainforest and the plaintiffs have claimed damages exceeding $27 billion. It has also faced major challenges due to political instability in Nigeria, the largest oil exporter in Africa. 12 "Chevron Corporation (CVX)." Wikinvest. Web. 18 Oct. 2014. 13 "Chevron Corp." Morningstar. 1 Jan. 2014. Web. 18 Oct. 2014. 14 "The Power of Human Energy." Chevron Corporation Home. Web. 5 Oct. 2014. 7 8 One of the main challenges that the company has faced recently is the rise of renewable energy, mainly due to the fact that governments throughout the world offer more grants and subsidies to renewable companies. Nevertheless, it could not be omitted that Chevron is one of the few oil major companies that has embraced the opportunity of a renewable future, plus, it is actively involved in pursuing alternative energy solutions. 15 Time Trend, Peer Group Analysis: The Following table provides information on Chevron Corp. Ratios and computed Industry average: The following table provides information on Royal Dutch Shell Company's Ratios: 15 "Chevron Corporation (CVX)." Stock: Chevron Corporation (CVX). Wikinvest. Web. 5 Oct. 2014. . 8 9 In our analysis we have selected Royal Dutch Shell Company. It was difficult to find an industry average so for that Purpose we chose Exxon Mobil as the supplementary company that would enable us to compute an approximate industry average for reference in our analysis. Comparison Based on the Time-Trend analysis of the two selected companies: Liquidity Performance: Industry average 2013: 1.15 Industry Average 2013: 0.91 Given the above graph we see that Chevron has consistently been above the industry average with its quick ratio fluctuating between 1.2 and 1.45, which indicates that Chevron would not have had problems with solving its current debt with the use of inventory but rather liquid assets available on hand. However it is useful to point out that Chevron has a rather large amount of receivables as compare to other more liquid assets, which we believe is characteristic for the industry. 9 10 As with the quick ratio we see that Chevron manages to keep a rather high amount of assets as compared to liabilities, with above-average performance. Additionally if we pay attention to inventory turnover data (presented later on) Chevron has a tendency to manage its inventory and dispose of it rather fast with above average turnover (35.8 as compared to an average of 26.12). This would mean that inventories are deposed of rather quickly and would not be an impediment when trying to resolve and outstanding current debt. Asset Management Performance: Industry Average 2013: 26.12 The above data shows that Chevron is outperforming its competitors in terms of inventory turnover, high levels of turnover would indicate that Chevron offers good quality products and service thus increasing its ability to push its sales on the market without having to keep excess/old inventory. Industry Average (2013): 34.03 days When it comes to collecting receivables, Chevron manages to stay consistent at an average of 33 days as compared to Shell even after the 2008 crisis. This could signal that Shell had more accounts that were unable to pay their debts between 2009 and 2012 as opposed to Chevron who apparently deal with safer accounts that fulfill their obligations consistently. 10 11 Industry Average (2013): 1.86 In this case there is indication that Shell has more revenue generating assets, however it might also point at the fact that Shell as an entity has operated since 1907 as opposed to Chevron, which has been established as a company in 1984 making Shell the older company with the bigger accumulated depreciation and lower carrying amounts thus driving the ratio up for Shell. Industry Average (2013): 1.15 Here the scales tip in favor of Shell again since we saw that the fixed assets are used much more intensively while Chevron is lagging behind and is not generating as much revenue on its assets. Debt Management: 11 12 Industry Average (2013): 0.47 In this situation Chevron comes out on top, because a lower debt ratio is a signal of a good credit position and low indebtedness. Although Chevron's competitors are not far from the industry average they posses a worse position. Thus a creditor would be more willing to lend to Chevron at better conditions. Industry Average (2013): 3.45 This ratio analysis shows us that Chevron has a much larger cushion when it comes to fulfilling its interest payments as opposed to its competitor. Shell on the other hand is way below average. This might be due to the fact that Shells' capital structure is more reliant on debt than Chevron. This means that debt payments would eat up a higher proportion of pre-tax income in the case of Shell rather than Chevron, which is operating only on a 13% of debt in its capital structure. NOTE: We could not include the EBITDA Coverage analysis because interest expense data for 2013 was not available on Chevron's Income Statement. Profitability: 12 13 Industry Average (2013): 0.07~7% Chevron takes the lead again with above average margin of 9% and the lead is due to less reliance on debt as compared to Shell, which has had extensive interest expenses over the course of its existence compared to Chevron. However these statistics might be questionable due to the absence of any interest expense on Chevrons income statements for the past 3 reporting periods. Still Chevrons low reliance on debt should be proof enough of why the scales are tipped in its favor. Industry Average: 0.13~ 13% In this category Chevrons' low reliance on debt places it above Shell by around 5% and 1% above average in terms of raw earning power. Industry Average (2013): 0.08~8% Industry Average (2013): 0.14~14% 13 14 Given both Return ratios we see that Chevron comes out on top of Shell in both due to its low reliance on debt. At the same time they are at industry average level, which is cause to be sure of Chevrons' consistent performance overall. Market Value Evaluation: Industry Average: 0.08~8% Industry Average: 0.14~14% Considering the above information we see that Chevron is below average on both Price/Earnings and Price/Cash Flow Ratios, indicating that it is in a state of reduced growth which could be explained by declining oil prices which puts a strain on the energy sector and damages their ability to make a profit. 14 15 Industry Average: 1.75 In the Market to Book value ratio we see that Chevron is below average. However the ratio is above 1.0, which implies that the market regards Chevron as a good investment and values its stock above par. Free Cash Flow and Net Cash Flow: In both cases we observe a negative results for Free Cash Flow. However we cannot ignore the fact that there is growing expenditure on Fixed and Long Term Assets, which would explain the negative outcome. Given the positive Net Cash Flow and relatively low Market/Book Value between 1.25-1.45, we might conclude that both companies would plan to expand, thus driving to stock price up. The later fact is always attractive to investors. Conclusion: With our analysis of Chevron's financial statements, performance and general perspectives we have reached the conclusion that Chevron has a solid foundation that helps it withstand the current downward pressures on the energy market due to Crude oil prices decrease. Its low reliance on debt allows the company to withstand this coming period of reduced activity while collecting receivables 15 16 from what appears to be a solid and well performing customer base, which Shell is clearly lacking. In General we would support Chevron's inclination toward \"clean\" energy development and would consider that it could increase its reliability on debt to increase investment into forward-looking projects, which judging by the negative FCF is the case. 16 17 References: "The Power of Human Energy." Chevron Corporation Home. Web. 5 Oct. 2014. "Climate Change and Human Health RISKS AND RESPONSES." (2003). Web. World Energy Outlook 2013. Paris: OECD/IEA, 2013. Print. "Sector Details - Business Cycle - Fidelity." Sector Details - Business Cycle - Fidelity. Web. 5 Oct. 2014. "Global Financial Crisis Portal - Latest News, Articles, Analysis and More..." World Oil Crisis. Global Financial Crisis Portal. Web. 5 Oct. 2014. . "Chevron Corporation (CVX)." Stock: Chevron Corporation (CVX). Wikinvest. Web. 5 Oct. 2014. . "Demography - Challenges and Opportunities in a Changing World." Research Paper (2011): 5. Sustainable & Responsible Investments (SRI). Web. "U.S. Energy Information Administration - EIA - Independent Statistics and Analysis." Annual Energy Outlook 2014. U.S. Energy Information Administration, 1 Apr. 2014. Web. 18 Oct. 2014. . "Reducing Demand for Energy from Industry, Businesses and the Public Sector." CRC Energy Efficiency Scheme. Web. 18 Oct. 2014. Chevron in Fortune 500." Fortune 500. Time Inc, 1 Jan. 2014. Web. 18 Oct. 2014. "Chevron Corporation (CVX)." Wikinvest. Web. 18 Oct. 2014. 17 Chevron Corporation Report Team members Total Points: Excel: Word: Bonus: Comments: 0 /50 Financial Statements Portfolio Project Part I Please copy and paste the financial statements of your company on this sheet Label the statements clearly, stating the years, units etc. Please arrange your statements neatly and provide the source of your information CHEVRON CORP ADR (CVX) CashFlowFlag INCOME STATEMENT Fiscal year ends in December. USD in millions except per share data. Revenue Cost of revenue Gross profit Costs and expenses Sales, General and administrative Depreciation and amortization Interest expense Other operating expenses Total costs and expenses Income before income taxes Provision for income taxes Net income from continuing operations Other Net income Net income available to common shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted EBITDA 2009-12 $171,636 $117,510 $54,126 $4,527 $12,110 $28 $18,933 $35,598 $18,528 $7,965 $10,563 -$80 $10,483 $10,483 $5.26 $5.24 1992 2001 $30,666 CHEVRON CORP ADR (CVX) CashFlowFlag BALANCE SHEET Fiscal year ends in December. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Short-term investments Total cash Receivables Inventories Prepaid expenses Other current assets Total current assets 2009-12 $8,716 $106 $8,822 $17,703 $5,529 $5,162 $37,216 Non-current assets Property, plant and equipment Gross property, plant and equipment Accumulated Depreciation Net property, plant and equipment Equity and other investments Goodwill Other long-term assets Total non-current assets Total assets Liabilities and stockholders' equity Liabilities Current liabilities Accounts payable Short-term debt Income taxes payable Accrued liabilities Other current liabilities Total current liabilities Non-current liabilities Long-term debt Capital leases Deferred taxes liabilities Pensions and other postretirement benefits Minority interest Other long-term liabilities Total non-current liabilities Total liabilities Stockholders' equity Common stock Additional paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income Total Stockholders' equity Total liabilities and stockholders' equity $188,288 -$91,820 $96,468 $21,158 $4,618 $5,161 $127,405 $164,621 $16,437 $384 $2,624 $5,375 $1,391 $26,211 $9,829 $301 $11,521 $647 $24,198 $46,496 $72,707 $91,914 $14,631 $106,289 -$26,168 -$94,752 $91,914 $164,621 CHEVRON CORP ADR (CVX) Statement of CASH FLOW Fiscal year ends in December. USD in millions except per share data. Cash Flows From Operating Activities Net income Depreciation & amortization 2009-12 $10,563 $12,110 Deferred income taxes Accounts receivable Inventory Prepaid expenses Income taxes payable Other working capital Other non-cash items Net cash provided by operating activities Cash Flows From Investing Activities Investments in property, plant, and equipment Property, plant, and equipment reductions Acquisitions, net Purchases of investments Sales/Maturities of investments Other investing activities Net cash used for investing activities Cash Flows From Financing Activities Debt issued Debt repayment Repurchases of treasury stock Cash dividends paid Other financing activities Net cash provided by (used for) financing activities Effect of exchange rate changes Net change in cash Cash at beginning of period Cash at end of period Free Cash Flow Operating cash flow Capital expenditure Free cash flow $467 -$1,476 $1,213 -$264 -$653 -$1,121 -$1,466 $19,373 -$19,843 $2,564 $463 $244 -$16,572 $5,347 -$496 -$5,373 -$3,024 -3546 114 -631 $9,347 $8,716 $19,373 -$19,843 -$470 Correct 2010-12 2011-12 2012-12 2013-12 TTM $204,928 $253,706 $241,909 $228,848 $225,864 $135,655 $149,923 $140,766 $134,696 $132,180 $69,273 $103,783 $101,143 $94,152 $93,684 $4,767 $13,063 $50 $19,338 $37,218 $32,055 $12,919 $19,136 -$112 $19,024 $19,024 $4,745 $12,911 $27,294 $13,413 $29,137 $14,186 $29,274 $15,265 $38,493 $56,149 $47,634 $20,626 $27,008 -$113 $26,895 $26,895 $14,104 $54,811 $46,332 $19,996 $26,336 -$157 $26,179 $26,179 $14,924 $58,247 $35,905 $14,308 $21,597 -$174 $21,423 $21,423 $15,157 $59,696 $33,988 $13,823 $20,165 -$108 $20,057 $20,057 $9.53 $9.48 $13.54 $13.44 $13.42 $13.32 $11.18 $11.09 $10.56 $10.47 1997 2007 $45,168 1986 2001 $60,545 1950 1950 $59,745 1917 1932 $50,091 1900 1915 $49,253 2010-12 $14,060 $155 $14,215 $20,759 $5,493 $5,519 $2,855 $48,841 2011-12 2012-12 2013-12 $15,864 $4,207 $20,071 $21,793 $5,543 $5,827 $21,647 $266 $21,913 $20,997 $6,144 $6,666 $16,253 $263 $16,516 $21,622 $6,380 $5,732 $53,234 $55,720 $50,250 $207,367 -$102,863 $104,504 $21,520 $4,617 $5,287 $135,928 $184,769 $233,432 -$110,824 $122,608 $22,868 $4,642 $6,122 $156,240 $209,474 $263,481 -$122,133 $141,348 $23,718 $4,640 $7,556 $177,262 $232,982 $296,433 -$131,604 $164,829 $25,502 $4,639 $8,533 $203,503 $253,753 $19,259 $187 $2,776 $5,324 $1,466 $29,012 $22,147 $340 $4,584 $5,287 $1,242 $33,600 $22,776 $127 $4,341 $5,738 $1,230 $34,212 $22,815 $374 $3,092 $5,402 $1,335 $33,018 $11,003 $286 $12,697 $6,696 $730 $19,264 $50,676 $79,688 $9,684 $128 $15,544 $799 $28,337 $54,492 $88,092 $11,966 $99 $17,672 $9,699 $1,308 $21,502 $62,246 $96,458 $19,960 $97 $21,301 $5,968 $1,314 $22,982 $71,622 $104,640 $105,081 $14,796 $119,641 -$26,411 -$108,026 $105,081 $184,769 $121,382 $15,156 $140,399 -$29,685 -$125,870 $121,382 $209,474 $136,524 $15,497 $159,730 -$33,884 -$141,343 $136,524 $232,982 $149,113 $15,713 $173,677 -$38,290 -$151,100 $149,113 $253,753 2010-12 $19,136 $13,063 2011-12 $27,008 $12,911 2012-12 $26,336 $13,413 2013-12 $21,597 $14,186 TTM $20,165 $15,265 $559 -$2,767 $15 -$542 $321 $3,049 -$1,475 $31,359 $1,589 -$2,156 -$404 -$853 $1,892 $4,030 -$2,919 $41,098 -$19,612 $1,995 -$26,500 $3,517 -$3,009 $2,015 $1,876 $2,349 -$233 -$471 -$630 $1,697 -$3,315 $38,812 -$237 $834 -$987 -$941 -$1,326 $35,002 $207 $145 -$491 $582 -$1,156 $37,066 -$30,938 $2,777 -$37,985 -$38,695 $3,578 -$24,796 $2,376 -$35,609 $3,779 -$34,916 $6,000 -$132 -$42 -$7,573 -$2,116 -3821 -266 -4694 $20,939 $16,245 -$7,760 -$887 -8689 -132 -6671 $20,630 $13,959 $35,002 -$37,985 -$2,983 $37,066 -$38,695 -$1,629 -$213 $338 -$3,636 -$20,915 $339 -$1,836 -$27,489 $1,250 -$156 $377 -$2,746 -$5,746 -$518 -5170 70 5344 $8,716 $14,060 -$6,210 -$3,193 -11772 -33 1804 $14,060 $15,864 $4,007 -$2,224 -$4,142 -$6,885 $264 -8980 39 5075 $15,864 $20,939 $31,359 -$19,612 $11,747 $41,098 -$26,500 $14,598 $38,812 -$30,938 $7,874 Financial Statements Portfolio Project Part I Please copy and paste the financial statements of Competitor 1 on this sheet Label the statements clearly, stating the years, units etc. Please arrange your statements neatly and provide the source of your information ROYAL DUTCH SHELL PLC ADR (RDS) CashFlowFlag INCOME STATEMENT Fiscal year ends in December. USD in millions except per share data. Revenue Cost of revenue Gross profit Costs and expenses Research and development Sales, General and administrative Depreciation and amortization Interest expense Other operating expenses Total costs and expenses Income before income taxes Provision for income taxes Net income from continuing operations Other Net income Net income available to common shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted EBITDA 2009-12 $285,129 $228,376 $56,753 $1,125 $17,430 $14,458 $542 $2,178 $35,733 $21,020 $8,302 $12,718 -$200 $12,518 $12,518 $4.08 $4.08 3062 3064 $36,020 ROYAL DUTCH SHELL PLC ADR (RDS) CashFlowFlag BALANCE SHEET Fiscal year ends in December. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Total cash Receivables Inventories Prepaid expenses Other current assets Total current assets 2009-12 $9,719 $9,719 $59,328 $27,410 $96,457 Non-current assets Property, plant and equipment Gross property, plant and equipment Accumulated Depreciation Net property, plant and equipment Equity and other investments Goodwill Intangible assets Deferred income taxes Prepaid pension costs Other long-term assets Total non-current assets Total assets Liabilities and stockholders' equity Liabilities Current liabilities Accounts payable Short-term debt Income taxes payable Accrued liabilities Deferred revenues Other current liabilities Total current liabilities Non-current liabilities Long-term debt Deferred taxes liabilities Deferred revenues Pensions and other postretirement benefits Minority interest Other long-term liabilities Total non-current liabilities Total liabilities Stockholders' equity Common stock Retained earnings Treasury stock Accumulated other comprehensive income Total Stockholders' equity Total liabilities and stockholders' equity $270,816 -$139,197 $131,619 $35,049 $5,356 $4,533 $19,167 $195,724 $292,181 $67,161 $4,171 $461 $12,996 $84,789 $30,862 $13,838 $5,923 $1,704 $18,634 $70,961 $155,750 $136,431 $127,633 -$1,711 -$125,922 $136,431 $292,181 ROYAL DUTCH SHELL PLC ADR (RDS) Statement of CASH FLOW Fiscal year ends in December. USD in millions except per share data. Cash Flows From Operating Activities Net income 2009-12 $12,718 Depreciation & amortization Deferred income taxes Accounts receivable Inventory Accounts payable Income taxes payable Other working capital Other non-cash items Net cash provided by operating activities Cash Flows From Investing Activities Investments in property, plant, and equipment Property, plant, and equipment reductions Acquisitions, net Purchases of investments Sales/Maturities of investments Other investing activities Net cash used for investing activities Cash Flows From Financing Activities Debt issued Debt repayment Common stock issued Repurchases of treasury stock Cash dividends paid Other financing activities Net cash provided by (used for) financing activities Effect of exchange rate changes Net change in cash Cash at beginning of period Cash at end of period Free Cash Flow Operating cash flow Capital expenditure Free cash flow $14,458 -$1,925 $23,679 -$7,138 -$18,872 -$1,432 $21,488 -$26,516 -$2,955 $1,633 $1,604 -$26,234 $19,742 -$2,534 $27 -$10,717 -$7,347 -$829 $106 -$5,469 $15,188 $9,719 $21,488 -$26,516 -$5,028 Correct 2010-12 2011-12 2012-12 2013-12 TTM $378,152 $484,489 $481,700 $459,599 457090 $307,634 $396,502 $396,005 $381,585 376772 $70,518 $87,987 $85,695 $78,014 80318 $1,019 $15,528 $15,595 $996 $2,036 $35,174 $35,344 $14,870 $20,474 -$347 $20,127 $20,127 $1,125 $14,335 $13,228 $1,373 $2,266 $32,327 $55,660 $24,475 $31,185 -$267 $30,918 $30,918 $1,314 $14,616 $14,615 $1,251 $3,610 $35,406 $50,289 $23,449 $26,840 -$248 $26,592 $26,592 $1,318 $14,675 $21,509 $568 $6,352 $44,422 $33,592 $17,066 $16,526 -$155 $16,371 $16,371 1276 14616 24560 745 6531 47728 32590 16144 16446 -172 16274 16274 $6.56 $6.56 $9.96 $9.94 $8.50 $8.48 $5.20 $5.20 $5.18 $5.18 3066 3070 $51,935 3106 3111 $70,261 3131 3134 $66,155 3146 3147 $55,669 3144 3144 57896 2010-12 2011-12 2012-12 $13,444 $13,444 $70,102 $29,348 $11,292 $11,292 $79,509 $28,976 $18,550 $18,550 $65,403 $30,781 $112,894 $119,777 $114,734 2013-12 $9,696 $9,696 $50,357 $30,009 $6,836 $6,445 $103,343 $285,525 -$142,820 $142,705 $37,223 $295,557 -$143,476 $152,081 $43,482 $5,039 $5,361 $4,521 $4,732 $325,753 -$153,460 $172,293 $43,217 $2,955 $1,515 $4,045 $19,338 $209,666 $322,560 $20,664 $225,480 $345,257 $21,566 $245,591 $360,325 $76,550 $9,951 $81,846 $6,712 $42,448 $7,833 $387 $11,878 $14,051 $100,552 $13,714 $102,659 $34,820 $96,979 $34,381 $13,388 $30,463 $14,649 $29,921 $15,590 $5,924 $1,767 $18,535 $73,995 $174,547 $5,931 $1,486 $20,552 $73,081 $175,740 $6,298 $1,433 $21,610 $74,852 $171,831 $36,218 $11,943 $1,153 $11,182 $1,101 $22,610 $84,207 $177,465 $148,013 $140,179 $169,517 $162,987 $188,494 $180,218 $180,047 $183,474 -$140,179 $148,013 $322,560 -$162,987 $169,517 $345,257 -$180,218 $188,494 $360,325 -$183,474 $180,047 $357,512 2010-12 $20,474 2011-12 $31,185 2012-12 $26,840 $371,115 -$179,218 $191,897 $39,328 $2,563 $1,831 $5,785 $3,574 $9,191 $254,169 $357,512 $41,927 $8,344 $7,085 $382 $11,820 $23,700 $93,258 2013-12 $16,526 TTM $16,446 $15,595 -$1,934 -$11,931 -$2,888 $8,890 -$15,362 $15,362 -$856 $27,350 $13,228 $1,768 -$10,109 -$1,930 $5,568 -$26,940 -$26,301 -$2,939 $36,771 $14,615 $461 $24,561 -$2,549 -$1,746 $21,509 -$2,701 $5,648 $608 $5,137 $833 $46,140 -$3,268 $2,118 $40,440 -$2,591 $3,195 $39,062 -$32,576 $6,346 -$40,145 -$38,565 -$1,000 -$1,719 -$2,050 $6,882 $136 -$21,972 -$1,886 $468 $7,276 -$20,443 -$3,028 $698 $107 -$28,453 $999 -$40,146 $8,302 -$31,982 $12,496 -$3,240 $1,249 -$4,649 $5,108 -$4,960 $9,146 -$6,877 $12,103 -$9,334 -$9,979 -$744 -$1,467 -$186 $3,725 $9,719 $13,444 -$1,106 -$7,315 -$6,310 -$18,131 -$349 -$2,152 $13,444 $11,292 -$1,492 -$7,682 -$1,604 -$10,630 $201 $7,258 $11,292 $18,550 -$5,000 -$7,450 $1,203 -$8,978 -$170 -$8,854 $18,550 $9,696 -$4,108 -$6,955 $3,969 -$4,325 $124 $2,879 $12,540 $15,419 $27,350 -$26,940 $410 $36,771 -$26,301 $10,470 $46,140 -$32,576 $13,564 $40,440 -$40,145 $295 $39,062 -$38,565 $497 Financial Statements Portfolio Project Part I Please copy and paste the financial statements of Competitor 2 on this sheet Label the statements clearly, stating the years, units etc. Please arrange your statements neatly and provide the source of your information EXXON MOBIL CORPORATION ADR (XOM) CashFlowFlag INCOME STATEMENT Fiscal year ends in December. USD in millions except per share data. Revenue Cost of revenue Gross profit Costs and expenses Sales, General and administrative Depreciation and amortization Interest expense Other operating expenses Total costs and expenses Income before income taxes Provision for income taxes Net income from continuing operations Other Net income Net income available to common shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted EBITDA 2009-12 $310,586 $211,769 $98,817 $14,735 $11,917 $548 $36,840 $64,040 $34,777 $15,119 $19,658 -$378 $19,280 $19,280 $3.99 $3.98 4,832 4,832 $47,242 EXXON MOBIL CORPORATION ADR (XOM) CashFlowFlag BALANCE SHEET Fiscal year ends in December. USD in millions except per share data. Assets Current assets Cash Cash and cash equivalents Short-term investments 2009-12 $10,693 $169 Total cash Receivables Inventories Other current assets Total current assets Non-current assets Property, plant and equipment Gross property, plant and equipment Accumulated Depreciation Net property, plant and equipment Equity and other investments Intangible assets Total non-current assets Total assets Liabilities and stockholders' equity Liabilities Current liabilities Accounts payable Short-term debt Capital leases Income taxes payable Accrued liabilities Other current liabilities Total current liabilities Non-current liabilities Long-term debt Deferred taxes liabilities Pensions and other postretirement benefits Minority interest Other long-term liabilities Total non-current liabilities Total liabilities Stockholders' equity Common stock Additional paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income Total Stockholders' equity Total liabilities and stockholders' equity $10,862 $27,645 $11,553 $5,175 $55,235 $305,906 -$166,790 $139,116 $31,665 $7,307 $178,088 $233,323 $2,476 $8,310 $41,275 $52,061 $7,129 $23,148 $17,942 $4,823 $17,651 $70,693 $122,754 $110,569 $5,503 $276,937 -$166,410 -$116,030 $110,569 $233,323 EXXON MOBIL CORPORATION ADR (XOM) Statement of CASH FLOW Fiscal year ends in December. USD in millions except per share data. Cash Flows From Operating Activities Net income Depreciation & amortization 2009-12 $19,658 $11,917 Investment/asset impairment charges Deferred income taxes Inventory Accounts payable Other working capital Other non-cash items Net cash provided by operating activities Cash Flows From Investing Activities Investments in property, plant, and equipment Acquisitions, net Purchases of investments Sales/Maturities of investments Other investing activities Net cash used for investing activities Cash Flows From Financing Activities Debt issued Debt repayment Common stock issued Repurchases of treasury stock Cash dividends paid Other financing activities Net cash provided by (used for) financing activities Effect of exchange rate changes Net change in cash Cash at beginning of period Cash at end of period Free Cash Flow Operating cash flow Capital expenditure Free cash flow $731 $459 -$1,618 -$2,709 $28,438 -$22,491 $1,545 -$2,768 $571 $724 -$22,419 $1,561 -$1,714 $752 -$19,703 -$8,303 $124 -$27,283 $520 -$20,744 $31,437 $10,693 $28,438 -$22,491 $5,947 STATEMENT Correct 2010-12 2011-12 2012-12 2013-12 TTM $383,221 $486,429 $482,295 $438,255 $441,652 $262,298 $306,802 $336,079 $284,681 $287,312 $120,923 $179,627 $146,216 $153,574 $154,340 $14,683 $14,760 $259 $38,262 $67,964 $52,959 $21,561 $31,398 -$938 $30,460 $30,460 $14,983 $15,583 $247 $75,557 $106,370 $73,257 $31,051 $42,206 -$1,146 $41,060 $41,060 $13,877 $15,888 $327 $37,398 $67,490 $78,726 $31,045 $47,681 -$2,801 $44,880 $44,880 $12,877 $17,182 $9 $65,795 $95,863 $57,711 $24,263 $33,448 -$868 $32,580 $32,580 $12,792 $17,144 $30 $66,091 $96,057 $58,283 $23,084 $35,199 -$1,099 $34,100 $34,100 $6.24 $6.22 $8.43 $8.42 $9.70 $9.70 $7.37 $7.37 $7.85 $7.85 4,885 4,897 $67,978 4,870 4,875 $89,087 4,628 4,628 $94,941 4,419 4,419 $74,902 4,346 4,346 $75,457 2010-12 $7,825 $2 2011-12 $12,664 2012-12 $9,582 2013-12 $4,644 100 100 40.71263 42.38639 $7,827 $32,284 $12,976 $5,897 $58,984 $12,664 $38,642 $15,024 $6,633 $72,963 $9,582 $34,987 $14,542 $5,349 $64,460 $4,644 $33,152 $16,135 $5,377 $59,308 $373,938 -$174,390 $199,548 $35,338 $8,640 $243,526 $302,510 $393,995 -$179,331 $214,664 $34,333 $9,092 $258,089 $331,052 $409,314 -$182,365 $226,949 $34,718 $7,668 $269,335 $333,795 $434,517 -$190,867 $243,650 $36,328 $7,522 $287,500 $346,808 $2,787 $33,969 $7,711 $9,758 $50,034 $62,633 $12,727 $10,422 $12,676 $77,505 $30,920 $15,086 $722 $7,831 $50,728 $64,139 $17,165 $71,724 $12,227 $35,150 $19,367 $5,840 $20,454 $93,038 $155,671 $9,322 $36,618 $24,994 $6,348 $21,869 $99,151 $176,656 $7,928 $37,570 $25,267 $5,797 $27,231 $103,793 $167,932 $6,891 $40,530 $20,646 $6,492 $26,522 $101,081 $172,805 $146,839 $9,371 $298,899 -$156,608 -$151,662 $146,839 $302,510 $154,396 $9,512 $330,939 -$176,932 -$163,519 $154,396 $331,052 $165,863 $9,653 $365,727 -$197,333 -$178,047 $165,863 $333,795 $174,003 $10,077 $387,432 -$212,781 -$184,728 $174,003 $346,808 $9,812 2010-12 $31,398 $14,760 2011-12 $42,206 $15,583 $3,653 2012-12 $47,681 $15,888 2013-12 $33,448 $17,182 TTM $35,199 $17,144 -$1,135 -$1,148 $142 -$2,208 $3,142 -$1,873 $3,624 -$1,124 -$11,168 $56,170 $4,993 -$455 $48,413 $1,196 -$1,574 $55,345 -$26,871 $3,261 -$1,254 $155 $505 -$24,204 $754 -$1,812 -$2,908 -$1,750 $44,914 -$1,755 -$1,644 $48,944 -$30,975 $11,133 -$5,340 $1,674 $1,343 -$22,165 -$34,271 $7,655 -$972 -$33,669 $2,707 -$4,435 -$33,394 $5,709 -$1,649 $1,987 -$25,601 $1,196 -$34,201 $3,197 -$26,137 $1,741 -$7,951 $1,043 -$13,093 -$8,779 $115 -$26,924 -$153 -$2,868 $10,693 $7,825 $3,326 -$1,369 $924 -$22,055 -$9,326 $244 -$28,256 -$85 $4,839 $7,825 $12,664 $1,727 -$4,635 $193 -$21,068 -$10,419 $334 -$33,868 $217 -$3,082 $12,664 $9,582 $361 -$769 $50 -$15,998 -$11,179 $12,059 -$15,476 -$175 -$4,938 $9,582 $4,644 $5,659 $50 -$13,209 -$11,468 -$2,511 -$21,479 $146 $1,474 $4,609 $6,083 $48,413 -$26,871 $21,542 $55,345 -$30,975 $24,370 $56,170 -$34,271 $21,899 $44,914 -$33,669 $11,245 $48,944 -$33,394 $15,550 100 100 39.43424 42.04224 Ratios Portfolio Project Part I NOTE: You may need to add other line items to compute the ratios Chevron You need Operating Leases disclose in the notes to BS (if avaialble) Revenue/Sales Cost of Goods Sold EBIT Depreciation Interest Expense Lease Payments Net Income Available to Common Stockholders Current Assets Current Liabilities Line Items From Financial Statements Units $ Inventories Receivables Net Fixed Assets Total Assets Total Liabilities Common Equity Stock Price per Share Number of Shares Outstanding Earnings Per Share Net Income Operating cash flow EBITDA Shell Revenue/Sales Cost of Goods Sold EBIT Depreciation Interest Expense Lease Payments Net Income Available to Common Stockholders Current Assets Current Liabilities Inventories Line Items From Financial Statements Units Receivables Net Fixed Assets Total Assets Total Liabilities Common Equity Stock Price per Share Number of Shares Outstanding Earnings Per Share Net Income Operating cash flow EBITDA Exxon Revenue/Sales Cost of Goods Sold EBIT Depreciation Interest Expense Lease Payments Net Income Available to Common Stockholders Current Assets Current Liabilities Inventories Receivables Net Fixed Assets Total Assets Total Liabilities Common Equity Stock Price per Share Number of Shares Outstanding Earnings Per Share Net Income Operating cash flow EBITDA Line Items From Financial Statements Units Note: You may estimate the industry average based o om Financial Statements 2009 2010 2011 2012 2013 $171,636 $204,928 $253,706 $241,909 $228,848 $117,510 $135,655 $149,923 $140,766 $134,696 $18,556 $32,105 $47,634 $46,332 $35,905 $12,110 $13,063 $12,911 $13,413 $14,186 $28 $50 $0 $0 $0 $301 $286 $128 $99 $97 $10,483 $19,024 $26,895 $26,179 $21,423 $37,216 $48,841 $53,234 $55,720 $50,250 $26,211 $29,012 $33,600 $34,212 $33,018 $5,529 $5,493 $5,543 $6,144 $17,703 $20,759 $21,793 $20,997 $96,468 $104,504 $122,608 $141,348 $164,621 $184,769 $209,474 $232,982 $72,707 $79,688 $88,092 $96,458 $91,914 $105,081 $121,382 $136,524 $72.76 $76.99 $91.19 $108.31 $6,380 $21,622 $164,829 $253,753 $104,640 $149,113 $110.50 1992 1997 1986 1950 1917 $5.26 $10,483 $19,373 $30,666 $9.53 $19,024 $31,359 $45,168 $13.54 $26,895 $41,098 $60,545 $13.42 $26,179 $38,812 $59,745 $11.18 $21,423 $35,002 $50,091 om Financial Statements 2009 2010 2011 2012 2013 $285,129 $378,152 $484,489 $481,700 $459,599 $228,376 $307,634 $396,502 $396,005 $381,585 $21,562 $36,340 $57,033 $51,540 $34,160 $14,458 $15,595 $13,228 $14,615 $21,509 $542 $996 $1,373 $1,251 $568 $12,518 $20,127 $30,918 $26,592 $16,371 $96,457 $112,894 $119,777 $114,734 $103,343 $84,789 $100,552 $102,659 $96,979 $93,258 $27,410 $29,348 $28,976 $30,781 $30,009 Ratio Category Liquidity Asset Management Debt Management Profitability Market Value Ratios Ratio Category Liquidity Asset Management Debt Management $59,328 $131,619 $292,181 $155,750 $136,431 $60.11 3062.00 $4.08 $12,718 $21,488 $36,020 om Financial Statements 2009 $310,586 $211,769 $35,325 $11,917 $548 $0 $19,280 $55,235 $52,061 $11,553 $27,645 $139,116 $233,323 $122,754 $110,569 $68.19 4,832 $3.99 $19,658 $28,438 $47,242 $70,102 $142,705 $322,560 $174,547 $148,013 $66.78 3066.00 $6.56 $20,474 $27,350 $51,935 $79,509 $152,081 $345,257 $175,740 $169,517 $73.09 3106.00 $9.96 $31,185 $36,771 $70,261 $65,403 $172,293 $360,325 $171,831 $188,494 $68.95 3131.00 $8.50 $26,840 $46,140 $66,155 $50,357 $191,897 $357,512 $177,465 $180,047 $71.27 3146.00 $5.20 $16,526 $40,440 $55,669 Profitability Market Value Ratios Ratio Category Liquidity 2010 $383,221 $262,298 $53,218 $14,760 $259 $0 $30,460 $58,984 $62,633 $12,976 $32,284 $199,548 $302,510 $155,671 $146,839 $73.12 4,885 $6.24 $31,398 $48,413 $67,978 2011 $486,429 $306,802 $73,504 $15,583 $247 $0 $41,060 $72,963 $77,505 $15,024 $38,642 $214,664 $331,052 $176,656 $154,396 $84.76 4,870 $8.43 $42,206 $55,345 $89,087 2012 $482,295 $336,079 $79,053 $15,888 $327 $0 $44,880 $64,460 $64,139 $14,542 $34,987 $226,949 $333,795 $167,932 $165,863 $86.55 4,628 $9.70 $47,681 $56,170 $94,941 2013 $438,255 $284,681 $57,720 $17,182 $9 $722 $32,580 $59,308 $71,724 $16,135 $33,152 $243,650 $346,808 $172,805 $174,003 $101.20 4,419 $7.37 $33,448 $44,914 $74,902 Asset Management Debt Management Profitability Market Value You may estimate the industry average based on 4 leading companies in the same industry Ratio Current Quick Cash Management Inventory Turnover Days Sales Outstanding Fixed Asset Turnover Total Asset Turnover Management Debt Ratio Ratios Formula (Ratio) Units 2009 2010 2011 2012 Correct Correct 1.42 4.74 1.68 5.28 1.58 6.06 1.63 5.57 Correct Correct Correct Correct 31.04 37.65 1.78 1.04 37.31 36.97 1.96 1.11 45.77 31.35 2.07 1.21 39.37 31.68 1.71 1.04 Correct 0.44 0.43 0.42 0.41 Times-Interest-Earned EBITDA Coverage* Correct 3.36 1095.21 5.84 903.36 8.59 0.00 7.54 0.00 Profit Margin on Sales Basic Earning Power Return on Total Assets Return on Common Equity Correct Correct Correct Correct 0.06 0.11 0.06 0.11 0.09 0.17 0.10 0.18 0.11 0.23 0.13 0.22 0.11 0.20 0.11 0.19 Price/Earnings Price/Cash Flow Market/Book Correct Correct Correct 13.83 7.48 1.58 8.08 4.90 1.46 6.73 4.41 1.49 8.07 5.44 1.55 Ratio Current Quick Cash Management Inventory Turnover Days Sales Outstanding Fixed Asset Turnover Total Asset Turnover Management Debt Ratio Times-Interest-Earned Formula (Ratio) Units 2009 2010 2011 2012 Correct Correct 1.14 0.81 1.12 0.83 1.17 0.88 1.18 0.87 Correct Correct Correct Correct 10.40 75.95 2.17 0.98 12.89 67.66 2.65 1.17 16.72 59.90 3.19 1.40 15.65 49.56 2.80 1.34 Correct 0.53 0.54 0.51 0.48 Correct 0.79 1.24 1.97 1.67 EBITDA Coverage Correct 66.46 52.14 51.17 52.88 Profit Margin on Sales Basic Earning Power Return on Total Assets Return on Common Equity Correct Correct Correct Correct 0.04 0.07 0.04 0.09 0.05 0.11 0.06 0.14 0.06 0.17 0.09 0.18 0.06 0.14 0.07 0.14 Price/Earnings Price/Cash Flow Market/Book Correct Correct Correct 14.73 8.57 1.35 10.18 7.49 1.38 7.34 6.17 1.34 8.11 4.68 1.15 Ratio Current Quick Cash Management Inventory Turnover Days Sales Outstanding Fixed Asset Turnover Total Asset Turnover Management Debt Ratio Times-Interest-Earned EBITDA Coverage Formula (Ratio) Units 2009 2010 2011 2012 Correct Correct 1.06 0.84 0.94 0.73 0.94 0.75 1.01 0.78 Correct Correct Correct Correct 26.88 32.49 2.23 1.33 29.53 30.75 1.92 1.27 32.38 29.00 2.27 1.47 33.17 26.48 2.13 1.44 Correct Correct Correct 0.53 3.06 86.21 0.51 4.10 262.46 0.53 4.89 360.68 0.50 5.44 290.34 Profit Margin on Sales Basic Earning Power Return on Total Assets Return on Common Equity Correct Correct Correct Correct 0.06 0.13 1.34 0.00 0.08 0.18 1.28 0.00 0.09 0.18 1.21 0.00 0.10 0.17 1.20 0.00 Price/Earnings Price/Cash Flow Market/Book Correct Correct Correct 17.09 11.59 2.98 11.72 7.38 2.43 10.05 7.46 2.67 8.92 7.13 2.41 2013 *Use the average number based on the 3 companies' ratios Industry Average* Time-Trend Analysis (For Chevron) 2013 1.52 5.18 Liquidity Ratios Liquidity Ratios 1.80 Liquidity Ratios 1.70 1.60 35.87 34.49 1.39 0.90 1.50 1.40 Current Quick 1.30 1.20 1.10 0.41 1.00 0.90 5.63 0.00 0.80 2009 0.09 0.14 0.08 0.14 2010 2011 2012 2013 EBITDA Coverage* More precise formula: EBITDA + Lease Payments)/ (Interest + Principal Payments + Lease Payments) 9.88 6.05 1.42 2013 1.11 0.79 Debt Management Liquidity Ratios Ratios (1) 15.32 39.99 2.40 1.29 10.00 9.00 8.00 0.50 EBITDA Coverage* 1.14 Debt Management Ratios More precise formula: EBITDA + Lease Payments)/(Interest + Principal Payments + Lease Payments) 7.00 6.00 5.00 4.00 3.00 2.00 1.00 Debt Ratio Times-Interest-Earned 8.00 7.00 Debt Ratio Times-Interest-Earned 6.00 More precise formula: 98.01 EBITDA + Lease Payments)/(Interest + Principal Payments + 0.04 Lease Payments) 0.10 0.05 0.09 5.00 4.00 3.00 2.00 1.00 0.00 2009 2010 13.71 5.54 1.25 0.83 0.60 2012 2013 Liquidity Ratios Profitability Ratios 0.25 2013 2011 Profitability Ratios 0.20 Profit Margin on Sales Basic Earning Power Return on Total Assets Return on Common Equity 0.15 0.10 27.16 27.61 1.80 1.26 0.05 0.00 2009 0.50 EBITDA Coverage* 3.58 More precise formula: 8322.44 EBITDA + Lease 13.73 9.96 2.57 2011 2012 2013 Liquidity Ratios Payments)/(Interest + Principal Payments + 0.08 Lease Payments) 0.16 1.30 0.00 2010 Market Value Ratios Market Value Ratios 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2009 Price/Earnings Price/Cash Flow Market/Book 2010 2011 2012 2013 Correct Correct Asset Management Ratios 50.00 45.00 Current Quick 40.00 35.00 30.00 Inv Da Fix Tot 2013 25.00 20.00 15.00 10.00 5.00 0.00 2009 2010 2011 2012 2013 Correct Correct Debt Management Ratios (2) os (1) 1150.00 1100.00 1050.00 Debt Ratio Times-Interest-Earned 1000.00 950.00 900.00 850.00 EBITDA Coverage* 1050.00 Debt Ratio Times-Interest-Earned 1000.00 EBITDA Coverage* 950.00 900.00 850.00 800.00 2009 Correct ofit Margin on Sales sic Earning Power turn on Total Assets turn on Common Equity s Price/Earnings Price/Cash Flow Market/Book 2010 atios Inventory Turnover Days Sales Outstanding Fixed Asset Turnover Total Asset Turnover 2013 Peer-Group Analysis Portfolio Project Part I Correct Peer Comparison 2009 Chevron Shell Liquidity Current Quick $1.42 4.74 $1.14 0.81 31.04 37.65 $1.78 $1.04 10.40 75.95 $2.17 $0.98 $0.44 $3.36 $1,095.21 $0.53 $0.79 $66.46 0.06 0.11 0.06 0.11 0.04 0.07 0.04 0.09 $13.83 $7.48 $1.58 $14.73 $8.57 $1.35 Asset Management Inventory Turnover DSO Fixed Assets Turnover Total Assets Turnover Debt Management Debt Ratio Time-Interest-Earned EBITDA Coverage Profitability Profit Margin on Sales BEP Ratio Return on Total Assets Return on Common Equity Market Value Price/Earnings Price/Cash Flow Market/Book Correct Current Ratios Liquidity Ratios $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 Current Ratios Company A Company B Company C Chevron Shell Exxon $0.60 $0.40 $0.20 $0.00 2009 2010 2011 2012 2013 Correct Liquidity Ratios Quick Ratios 7.00 6.00 5.00 4.00 Quick Ratios Company A Company B Company C Chevron Shell Exxon Liquidity Ratios Quick Ratios 7.00 6.00 5.00 4.00 3.00 Quick Ratios Company A Company B Company C Chevron Shell Exxon 2.00 1.00 0.00 2009 2010 2011 2012 2013 Correct 009 2010 Exxon Chevron 2011 Shell Exxon Chevron $1.06 0.84 $1.68 5.28 $1.12 0.83 $0.94 0.73 $1.58 6.06 26.88 32.49 $2.23 $1.33 37.31 36.97 $1.96 $1.11 12.89 67.66 $2.65 $1.17 29.53 30.75 $1.92 $1.27 45.77 31.35 $2.07 $1.21 $0.53 $3.06 $86.21 $0.43 $5.84 $903.36 $0.54 $1.24 $52.14 $0.51 $4.10 $262.46 $0.42 $8.59 0.06 0.13 1.34 0.00 0.09 0.17 0.10 0.18 0.05 0.11 0.06 0.14 0.08 0.18 1.28 0.00 0.11 0.23 0.13 0.22 $11.72 $7.38 $2.43 $6.73 $4.41 $1.49 Err:509 $17.09 $11.59 $2.98 $8.08 $4.90 $1.46 $10.18 $7.49 $1.38 Correct Inventory Turnover Liquidity RatiosRatios Chevron Shell Exxon 50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 2009 Inventory Turnover Ratios Copmany A Company B Company C 2010 2011 2012 Chevron Shell Exxon 2013 Correct DSO Ratios Liquidity Ratios 80.00 70.00 Chevron Shell Exxon 60.00 50.00 40.00 DSO Ratios Company A Company B Chevron Shell Exxon DSO Ratios Liquidity Ratios 80.00 DSO Ratios Company A Company B Company C 70.00 Chevron Shell Exxon 60.00 50.00 40.00 30.00 Chevron Shell Exxon 20.00 10.00 0.00 2009 2010 2011 2012 2013 Correct Fixed Assets Turnover Liquidity Ratios Ratios $3.50 $3.00 $2.50 $2.00 $1.50 Fixed Assets Turnover Company A Company B Company C EBITD $1,200.00 $1,000.00 Chevron Shell Exxon $200.00 $0.50 2010 2011 2012 $0.00 2009 2013 Correct Total Assets Turnover Liquidity RatiosRatios $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 Total Assets Turnover Company A Company B Company C $0.40 $0.20 $0.00 2009 $600.00 $400.00 $1.00 $0.00 2009 $800.00 2010 2011 2012 2013 Chevron Shell Exxon 2010 Correct Correct 2011 2012 Shell Exxon Chevron Shell Exxon $1.17 0.88 $0.94 0.75 $1.63 5.57 $1.18 0.87 $1.01 0.78 16.72 59.90 $3.19 $1.40 32.38 29.00 $2.27 $1.47 39.37 31.68 $1.71 $1.04 15.65 49.56 $2.80 $1.34 33.17 26.48 $2.13 $1.44 $0.51 $1.97 $51.17 $0.53 $4.89 $360.68 $0.41 $7.54 $0.48 $1.67 $52.88 $0.50 $5.44 $290.34 0.06 0.17 0.09 0.18 0.09 0.18 1.21 0.00 0.11 0.20 0.11 0.19 0.06 0.14 0.07 0.14 0.10 0.17 1.20 0.00 $7.34 $6.17 $1.34 $10.05 $7.46 $2.67 $8.07 $5.44 $1.55 $8.11 $4.68 $1.15 $8.92 $7.13 $2.41 Correct Debt RatioRatios Ratios Liquidity $0.60 0.12 Debt Ratios Copmany A Company B Company C $0.50 $0.40 $0.30 Profit Margin onRati Sal Liquidity 0.10 Chevron Shell Exxon 0.08 0.06 $0.20 0.04 $0.10 0.02 $0.00 2009 2010 2011 2012 0.00 2009 2013 Profit Margin on S Copmany A Company B Company C 2010 2011 2012 Correct Time-Interest-Earned Liquidity RatiosRatios $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 Time-Interest-Earned Copmany A Company B Liquidity BEP RatioRati Rati 0.25 0.20 Chevron Shell Exxon 0.15 BEP Ratios Copmany A Company B Time-Interest-Earned Liquidity RatiosRatios $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2009 Time-Interest-Earned Copmany A Company B Company C Liquidity BEP RatioRati Rati BEP Ratios Copmany A Company B Company C 0.25 0.20 Chevron Shell Exxon 0.15 0.10 0.05 2010 2011 2012 0.00 2009 2013 2010 2011 2012 Correct ReturnLiquidity on Total Asse Rati EBITDA Coverage Ratios Liquidity Ratios $1,200.00 $1,000.00 $800.00 $600.00 EBITDA Coverage Copmany A Company B Company C $400.00 Return on Total A Copmany A Company B Company C 1.40 1.20 Chevron Shell 1.00 0.80 0.60 0.40 $200.00 $0.00 2009 1.60 0.20 2010 2011 2012 2013 0.00 2009 2010 2011 2012 Rati Return onLiquidity Common Eq 0.25 0.20 0.15 0.10 Return on Common Copmany A Company B Company C 0.05 0.00 2009 2010 2011 2012 009 Correct 2013 Chevron Shell Industry Average Exxon $1.52 5.18 $1.11 0.79 $0.83 0.60 $0.00 0.00 35.87 34.49 $1.39 $0.90 15.32 39.99 $2.40 $1.29 27.16 27.61 $1.80 $1.26 $0.00 0.00 $0.00 $0.00 $0.41 $5.63 $0.50 $1.14 $98.01 $0.50 $3.58 $8,322.44 $0.00 $0.00 $0.00 0.09 0.14 0.08 0.14 0.04 0.10 0.05 0.09 0.08 0.16 1.30 0.00 0.00 0.00 0.00 0.00 $9.88 $6.05 $1.42 $13.71 $5.54 $1.25 $13.73 $9.96 $2.57 $0.00 $0.00 $0.00 Correct Profit Margin onRatios Sales Ratios Liquidity Profit Margin on Sales Copmany A Company B Company C Price/Earnings Ratios Liquidity Ratios $18.00 $16.00 $14.00 Chevron Shell Exxon $12.00 $10.00 $8.00 Price/Earnings Copmany A Company B Company C Ch Sh Exx $6.00 $4.00 $2.00 2010 2011 2012 $0.00 2009 2013 Correct 2011 2012 2013 Correct Price/Cash Ratios LiquidityFlow Ratios Liquidity BEP RatioRatios Ratios BEP Ratios Copmany A Company B 2010 $14.00 $12.00 Chevron Shell Exxon $10.00 $8.00 Price/Cash Flow Copmany A Company B Ch Sh Ex Price/Cash Ratios LiquidityFlow Ratios Liquidity BEP RatioRatios Ratios $14.00 BEP Ratios Copmany A Company B Company C $12.00 Chevron Shell Exxon $10.00 $8.00 $6.00 Price/Cash Flow Copmany A Company B Company C Ch Sh Ex $4.00 $2.00 009 2010 2011 2012 $0.00 2009 2013 2010 Correct 2011 2012 2013 Correct ReturnLiquidity on Total Assets Ratios Ratios Return on Total Assets Copmany A Company B Company C Market/Book Ratios Liquidity Ratios $3.50 $3.00 Chevron Shell Exxon $2.50 $2.00 $1.50 Market/Book Copmany A Company B Company C Ch Sh Ex $1.00 $0.50 009 2010 2011 2012 $0.00 2009 2013 Correct Ratios Return onLiquidity Common Equity Ratios Return on Common Equity Copmany A Company B Company C 09 2010 2011 2012 2013 Chevron Shell Exxon 2010 2011 2012 2013 nings Ratios y Ratios arnings any A any B any C 2012 Chevron Shell Exxon 2013 Ratios yFlow Ratios sh Flow any A any B Chevron Shell Exxon Ratios yFlow Ratios sh Flow any A any B any C 2012 Chevron Shell Exxon 2013 ook Ratios y Ratios /Book any A any B any C 2012 Chevron Shell Exxon 2013 Net Cash Flow and Free Cash Flow Portfolio Project Part I Note: The empty rows are left for supporting items that you might need in order to calculate FCF You may add rows if you need more space You may also put the FCF and NCF on a graph You need to calculate FCF and NCF only for the last three years Free Cash Flow and Net Cash Flow Company A (Your Company) 2010 2011 2012 Net Income $19,024 $26,895 $26,179 Depreciation $13,063 $12,911 $13,413 EBIT $32,105 $47,634 $46,332 Tax Rate (Effective) 40.3% 43.30% 43.16% Cash and Equivalents $14,060 $15,864 $21,647 Accounts Receivable $20,759 $21,793 $20,997 Inventories $5,493 $5,543 $6,144 Accounts Payable $19,259 $22,147 $22,776 Accruals $9,753 $11,453 $11,436 NOPAT Capital Expenditures/Operating Long-Term Assets NOWC Net Cash Flow Free Cash Flow Company B Net Income Depreciation EBIT Tax Rate (Effective) Cash and Equivalents Accounts Receivable Inventories Accounts Payable Accruals $19,167 $207,367 $11,300 $32,087 Free Cash Flow and Net Cash Flow 2010 2011 $20,474 $31,185 $15,595 $13,228 $36,340 $57,033 42.07% 43.97% $13,444 $11,292 $70,102 $79,509 $29,348 $28,976 $76,550 $81,846 $24,002 $20,813 NOPAT Capital Expenditures/Operating Long-Term Assets NOWC Net Cash Flow $21,052 $285,525 $12,342 $22,484 2012 $26,840 $14,615 $51,540 46.63% $18,550 $65,403 $30,781 $42,448 $54,531 Free Cash Flow Exxon Mobil Net Income Depreciation EBIT Tax Rate (Effective) Cash and Equivalents Accounts Receivable Inventories Accounts Payable Accruals Free Cash Flow and Net Cash Flow 2010 2011 $31,398 $42,206 $14,760 $15,583 $53,218 $73,504 40.71% 42.39% $7,825 $12,664 $32,284 $38,642 $12,976 $15,024 $0 $33,969 $62,633 $43,536 NOPAT Capital Expenditures/Operating Long-Term Assets NOWC Net Cash Flow Free Cash Flow $31,553 $373,938 -$9,548 $33,408 2012 $47,681 $15,888 $79,053 39.44% 39.44 39.44 39.44 39.44 39.44 $42,346 $47,874 $393,995 $409,314 -$11,175 $39 $44,217 $49,693 $39,498.65 $37,229.06 2013 $21,423 $14,186 $35,905 39.85% $16,253 $21,622 $6,380 $22,815 $10,203 Team 1 2013 $16,526 $21,509 $34,160 50.80% $9,696 $50,357 $30,009 $41,927 $51,331 Net C $60,000 Team 2 $50,000 $40,000 Unit $30,000 $20,000 $10,000 $50,000 $40,000 Unit $30,000 $20,000 $10,000 2013 $33,448 $17,182 $57,720 42.04% $4,644 $33,152 $16,135 $30,920 $40,804 $0 2 Free Cash Flow $44,000.00 $43,000.00 $42,000.00 $41,000.00 $40,000.00 Unit Team 3 $33,455 $434,517 -$17,793 $35,461 $43,265.95 1 $39,000.00 $38,000.00 $37,000.00 $36,000.00 $35,000.00 $34,000.00 1 2 3 60,000 50,000 40,000 30,000 20,000 10,000 Net Cash Flow 50,000 40,000 30,000 20,000 10,000 $0 1 2 3 3 4