Choose a publicly traded company and perform an expanded analysis on the financi
ID: 2792186 • Letter: C
Question
Choose a publicly traded company and perform an expanded analysis on the financial statements. Use the most current 10K statements available on SEC or annual statements in Yahoo Finance. Complete the following for your chosen firm in an Excel spreadsheet: 1.Horizontal and vertical analysis of the income statements for the past three years (all yearly balances set as a percentage of total revenues for that year). 2.Horizontal and vertical analysis of the balance sheets for the past three years (all yearly balances set as a percentage of total assets for that year). 3.Ratio analysis (eight ratios of your choosing) for the past three years PLUS a measurement for the creditworthiness of your firm as measured by Altman’s Z-score. Note that if you used your chosen firm for our ratio-related discussion posts, then you MUST also present industry-average ratios or current year competitor ratios for your ratio analysis. Comparing your firm’s ratios to a close competitor or an industry-average ratio makes your analysis much more meaningful.
Explanation / Answer
Ans:
Vertical Horizontal and Ratio Analysis of Paypal Holding Inc
Balance Sheet
All numbers in thousands
Vertical analysis
Period Ending
12/31/2016
12/31/2015
12/31/2014
12/31/2016
12/31/2015
12/31/2014
Current Assets
Cash And Cash Equivalents
1,590,000
1,393,000
2,201,000
4.80
4.82
10.04
Short Term Investments
3,385,000
2,018,000
29,000
10.23
6.99
0.13
Net Receivables
19,925,000
16,582,000
14,957,000
60.19
57.41
68.24
Inventory
-
-
-
Other Current Assets
833,000
655,000
378,000
2.52
2.27
1.72
Total Current Assets
25,733,000
20,648,000
17,565,000
77.74
71.49
80.14
Long Term Investments
1,539,000
2,348,000
31,000
4.65
8.13
0.14
Property Plant and Equipment
1,482,000
1,344,000
922,000
4.48
4.65
4.21
Goodwill
4,059,000
4,069,000
3,189,000
12.26
14.09
14.55
Intangible Assets
211,000
358,000
156,000
0.64
1.24
0.71
Accumulated Amortization
-
-
-
0.00
Other Assets
79,000
114,000
54,000
0.24
0.39
0.25
Deferred Long Term Asset Charges
-
-
-
0.00
Total Assets
33,103,000
28,881,000
21,917,000
100.00
100.00
100.00
Current Liabilities
Accounts Payable
1,715,000
1,356,000
2,671,000
9.33
8.97
19.54
Short/Current Long Term Debt
15,163,000
12,261,000
10,612,000
82.45
81.08
77.64
Other Current Liabilities
-
-
-
Total Current Liabilities
16,878,000
13,617,000
13,283,000
91.77
90.05
97.18
Long Term Debt
-
-
-
Other Liabilities
-
-
-
Deferred Long Term Liability Charges
1,513,000
1,505,000
386,000
8.23
9.95
2.82
Minority Interest
-
-
-
Negative Goodwill
-
-
-
Total Liabilities
18,391,000
15,122,000
13,669,000
100.00
100.00
100.00
Stockholders' Equity
Misc. Stocks Options Warrants
-
-
-
Redeemable Preferred Stock
-
-
-
Preferred Stock
-
-
-
Common Stock
-
-
-
Retained Earnings
2,069,000
668,000
-
Treasury Stock
-995,000
-
-
Capital Surplus
13,579,000
13,100,000
-
Other Stockholder Equity
59,000
-9,000
8,248,000
Total Stockholder Equity
14,712,000
13,759,000
8,248,000
Net Tangible Assets
10,442,000
9,332,000
4,903,000
All numbers in thousands
Revenue
12/31/2016
12/31/2015
12/31/2014
12/31/2016
12/31/2015
12/31/2014
Total Revenue
10,842,000
9,248,000
8,025,000
100%
100%
100%
Cost of Revenue
-
-
-
Gross Profit
10,842,000
9,248,000
8,025,000
100
100
100
Operating Expenses
Research Development
834,000
792,000
747,000
7.69
8.56
9.31
Selling General and Administrative
7,698,000
6,339,000
5,494,000
71.00
68.54
68.46
Non Recurring
-
48,000
48,000
0.52
0.60
Others
724,000
608,000
516,000
6.68
6.57
6.43
Total Operating Expenses
-
7,787,000
-
84.20
Operating Income or Loss
1,586,000
1,461,000
1,268,000
14.63
15.80
15.80
Income from Continuing Operations
Total Other Income/Expenses Net
45,000
27,000
-7,000
0.42
0.29
-0.09
Earnings Before Interest and Taxes
1,631,000
1,488,000
1,261,000
15.04
16.09
15.71
Interest Expense
-
-
-
Income Before Tax
1,631,000
1,488,000
1,261,000
15.04
16.09
15.71
Income Tax Expense
230,000
260,000
842,000
2.12
2.81
10.49
Minority Interest
-
-
-
Net Income From Continuing Ops
1,401,000
1,228,000
419,000
12.92
13.28
5.22
Non-recurring Events
Discontinued Operations
-
-
-
Extraordinary Items
-
-
-
Effect Of Accounting Changes
-
-
-
Other Items
-
-
-
Net Income
Net Income
1,401,000
1,228,000
419,000
Preferred Stock And Other Adjustments
-
-
-
Net Income Applicable To Common Shares
1,401,000
1,228,000
419,000
Ratio Analysis
12/31/2016
12/31/2015
12/31/2014
Profit Margin
12.92%
13.28%
5.22%
Operating Margin (ttm)
14.63%
15.80%
15.80%
Return on Assets (ttm)
4.52%
4.83%
2.04%
Return on Equity (ttm)
9.84%
11.16%
5.36%
Current Ratio
1.52
1.52
1.32
Quick Ratio
1.48
1.47
1.29
Financial Leverage
2.25
2.1
2.66
Return on Invested Capital
9.84%
10.63%
4.70%
Altman Z score
2.45
2.57
0.79
Balance Sheet
All numbers in thousands
Vertical analysis
Period Ending
12/31/2016
12/31/2015
12/31/2014
12/31/2016
12/31/2015
12/31/2014
Current Assets
Cash And Cash Equivalents
1,590,000
1,393,000
2,201,000
4.80
4.82
10.04
Short Term Investments
3,385,000
2,018,000
29,000
10.23
6.99
0.13
Net Receivables
19,925,000
16,582,000
14,957,000
60.19
57.41
68.24
Inventory
-
-
-
Other Current Assets
833,000
655,000
378,000
2.52
2.27
1.72
Total Current Assets
25,733,000
20,648,000
17,565,000
77.74
71.49
80.14
Long Term Investments
1,539,000
2,348,000
31,000
4.65
8.13
0.14
Property Plant and Equipment
1,482,000
1,344,000
922,000
4.48
4.65
4.21
Goodwill
4,059,000
4,069,000
3,189,000
12.26
14.09
14.55
Intangible Assets
211,000
358,000
156,000
0.64
1.24
0.71
Accumulated Amortization
-
-
-
0.00
Other Assets
79,000
114,000
54,000
0.24
0.39
0.25
Deferred Long Term Asset Charges
-
-
-
0.00
Total Assets
33,103,000
28,881,000
21,917,000
100.00
100.00
100.00
Current Liabilities
Accounts Payable
1,715,000
1,356,000
2,671,000
9.33
8.97
19.54
Short/Current Long Term Debt
15,163,000
12,261,000
10,612,000
82.45
81.08
77.64
Other Current Liabilities
-
-
-
Total Current Liabilities
16,878,000
13,617,000
13,283,000
91.77
90.05
97.18
Long Term Debt
-
-
-
Other Liabilities
-
-
-
Deferred Long Term Liability Charges
1,513,000
1,505,000
386,000
8.23
9.95
2.82
Minority Interest
-
-
-
Negative Goodwill
-
-
-
Total Liabilities
18,391,000
15,122,000
13,669,000
100.00
100.00
100.00
Stockholders' Equity
Misc. Stocks Options Warrants
-
-
-
Redeemable Preferred Stock
-
-
-
Preferred Stock
-
-
-
Common Stock
-
-
-
Retained Earnings
2,069,000
668,000
-
Treasury Stock
-995,000
-
-
Capital Surplus
13,579,000
13,100,000
-
Other Stockholder Equity
59,000
-9,000
8,248,000
Total Stockholder Equity
14,712,000
13,759,000
8,248,000
Net Tangible Assets
10,442,000
9,332,000
4,903,000
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