Financial statement analysis and common stock valuation

Analysis of Solvency Ratios
Quarterly Data

Examines RTX Corp. 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

Analysis of Liquidity Ratios

Measures the adequacy of RTX Corp. cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

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

Common-Size Income Statement

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

Analysis of Reportable Segments

RTX Corp. operates in 3 segments: Collins Aerospace; Pratt & Whitney; and Raytheon.

• Segment Profit Margin
• Segment Return on Assets (Segment ROA)
• Segment Asset Turnover
• Segment Capital Expenditures to Depreciation
• Net sales
• Operating profit (loss)
• Total assets
• Capital expenditures
• Depreciation & amortization

Analysis of Solvency Ratios

Examines RTX Corp. 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

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of RTX Corp. common stock issue as the present value of all future dividends.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• Dividend Growth Rate (g)

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

Balance Sheet: Liabilities and Stockholders’ Equity

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

Analysis of Long-term (Investment) Activity Ratios

Measures how efficiently RTX Corp. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
• Total Asset Turnover
• Equity Turnover

Analysis of Geographic Areas

RTX Corp. operates in 5 regions: United States; Europe; Asia Pacific; Middle East and North Africa; and Other regions.

• Area Asset Turnover
• External net sales
• Long-lived assets

Analysis of Liquidity Ratios
Quarterly Data

Measures the adequacy of a RTX Corp. cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio