Financial statement analysis and common stock valuation

Cash Flow Statement

The cash flow statement provides information about Eaton Corp. plc 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 Eaton Corp. plc balance sheet.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

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 Eaton Corp. plc 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 Eaton Corp. plc earnings.

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

Analysis of Profitability Ratios

Measures the income of Eaton Corp. plc 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)

Common Stock Valuation Ratios
Quarterly Data

Relative valuation technique determine the value of Eaton Corp. plc 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.

• 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)

Common-Size Income Statement

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

Income Statement
Quarterly Data

The income statement (statement of earnings) reports on the performance of Eaton Corp. plc, the result of its operating activities.

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

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

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

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

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Eaton Corp. plc during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Analysis of Reportable Segments

Eaton Corp. plc operates in 5 segments: Electrical Americas; Electrical Global; Aerospace; Vehicle; and eMobility.

• Segment Profit Margin
• Segment Return on Assets (Segment ROA)
• Segment Asset Turnover
• Segment Capital Expenditures to Depreciation
• Net sales
• Segment operating profit (loss)
• Identifiable assets
• Capital expenditures for property, plant and equipment
• Depreciation of property, plant and equipment

Enterprise Value (EV)

Enterprise value is total company value (the market value of common equity, debt, and preferred equity) minus the value of cash and short-term investments.

• Current EV
• Historical EV