Financial statement analysis and common stock valuation

Analysis of Solvency Ratios

Examines Palo Alto Networks Inc. capital structure in terms of the mix of its financing sources and the ability of the firm to satisfy its longer-term debt and investment obligations.

• Solvency Ratios (Summary)
• Debt to Equity
• Debt to Equity (including Operating Lease Liability)
• Debt to Capital
• Debt to Capital (including Operating Lease Liability)
• Debt to Assets
• Debt to Assets (including Operating Lease Liability)
• Financial Leverage
• Interest Coverage
• Fixed Charge Coverage

Analysis of Debt

• Total Debt (Carrying Amount)
• Total Debt (Fair Value)
• Weighted-average Interest Rate on Debt

Cash Flow Statement

The cash flow statement provides information about Palo Alto Networks Inc. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Palo Alto Networks Inc. balance sheet.

Enterprise Value to EBITDA (EV/EBITDA)

To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.

• Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
• EV to EBITDA Ratio, Current
• EV to EBITDA Ratio, Historical

Analysis of Long-term (Investment) Activity Ratios
Quarterly Data

Measures how efficiently Palo Alto Networks Inc. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Total Asset Turnover
• Equity Turnover

Income Statement

The income statement (statement of earnings) reports on the performance of Palo Alto Networks Inc., the result of its operating activities.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Palo Alto Networks Inc. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Palo Alto Networks Inc. earnings.

• Balance-Sheet-Based Accruals Ratio
• Cash-Flow-Statement-Based Accruals Ratio

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.

Common-Size Income Statement

Income statement components (revenues and expenses) shown as percentage of total sales.

Common Stock Valuation Ratios

Relative valuation technique determine the value of Palo Alto Networks Inc. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.

• Current Valuation Ratios
• Historical Valuation Ratios (Summary)
• Price to Earnings (P/E)
• Price to Operating Profit (P/OP)
• Price to Sales (P/S)
• Price to Book Value (P/BV)

Analysis of Short-term (Operating) Activity Ratios

Evaluates revenues and output generated by the Palo Alto Networks Inc. assets. Operating performance ratios describe the relationship between the Palo Alto Networks Inc. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Receivable Collection Period
• Average Payables Payment Period