Financial statement analysis and common stock valuation

Analysis of Profitability Ratios

Measures the income of Verizon Communications Inc. relative to its revenues and invested capital.

• Profitability Ratios (Summary)
• Gross Profit Margin
• Operating Profit Margin
• Net Profit Margin
• Return on Equity (ROE)
• Return on Assets (ROA)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing Verizon Communications Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Analysis of Debt

• Total Debt (Carrying Amount)
• Total Debt (Fair Value)
• Weighted-average Interest Rate on Debt
• Interest Costs Incurred
• Adjusted Interest Coverage Ratio

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Verizon Communications 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 Verizon Communications Inc. earnings.

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

Common-Size Income Statement

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

Analysis of Reportable Segments

Verizon Communications Inc. operates in 2 segments: Verizon Consumer Group and Verizon Business Group.

• Segment Profit Margin
• Operating revenues
• Operating income

Common-Size Income Statement
Quarterly Data

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

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Verizon Communications Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to The Firm (FCFF)
• Interest Paid, Net of Tax
• EV to FCFF Ratio, Current
• EV to FCFF Ratio, Historical

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

Income Statement
Quarterly Data

The income statement (statement of earnings) reports on the performance of Verizon Communications Inc., the result of its operating activities.

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Verizon Communications Inc. 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)

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

Measures how efficiently Verizon Communications 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