The version 1 of the Interactive thread had some active participation from Ali Arshad and kakaballi - with a few hopping in and quickly taking a Beeline for the exit. Ali corrected quite a few errors and Arshad provided some guidance on balance sheet. Next post summarizes results.
Re: Interactive thread - case studies
P/E price to earnings
Earnings yield E/P*100
Div yld div/P*100
payout ratio Div/E
Operating income = net income + taxes + interest
Re: Interactive thread - case studies
Above was income statement. Now to cash flow statement.
Operating cash flow OCF = Net Inc + depreciation + amortization + taxes + interest + payables - receivables
Free cash flow FCF = OCF - CAPITAL EXPENDITURE (CAPEX)
If OCF > Net income quality of earnings probably good.
If Price to FCF < 16 you are probably getting a good deal.
Re: Interactive thread - case studies
Now on to balance sheet.
Assets = liabilities + Equity
Assets - what company owns
Liabilities - what company owes
Equity - what shareholders own.
Liabilities include short term debt long term debt pension obligations taxes due and other stuff that Arshad/Ali know more abt.
Re: Interactive thread - case studies
My rule of thumb
P/E less than 15
Div yld > 2.5%
Payout ratio < 0.5
OCF > NET INC
Total cash in hand + FCF > Total debt + underfunded pension obligations. ( old companies have lot of underfunded pension obligations that can bankrupt them potentially)
Re: Interactive thread - case studies
So let us look at INTEL Corp. ticker symbol INTC
MARKET CAP $120B
Income statement
Revenue. $54b
Op Inc. $17.3B
Net Inc. $12.9B
EPS. $2.39
P. $21.9
P/E. 10.2 (21.9/2.3)
Div. $0.78
Payout ratio. 78/2.39 = 0.33
Re: Interactive thread - case studies
I will wait for questions corrections before proceeding.
Re: Interactive thread - case studies
Several sent message that above is clear. And wanted to proceed to the Cash Flow Statement. Patience, dear readers!
Re: Interactive thread - case studies
Congrats to all the readers. Our staff believes the Interactive part 1 thread and the income statement analysis of Intel has provided enough background for each of you to do your own analysis. Knock yourselves out!