Financial statement analysis and common stock valuation

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Lam Research 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)

Balance Sheet: Assets
Quarterly Data

The assets reports major classes and amounts of resources owned or controlled by Lam Research Corp..

Common Stock Valuation Ratios
Quarterly Data

Relative valuation technique determine the value of Lam Research Corp. 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)

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Lam Research Corp. 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 Lam Research Corp. balance sheet.

Analysis of Liquidity Ratios
Quarterly Data

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

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

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 Short-term (Operating) Activity Ratios
Quarterly Data

Evaluates revenues and output generated by the Lam Research Corp. assets. Operating performance ratios describe the relationship between the Lam Research Corp. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Income Statement
Quarterly Data

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

Common-Size Income Statement
Quarterly Data

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

Analysis of Liquidity Ratios

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

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

Analysis of Solvency Ratios
Quarterly Data

Examines Lam Research 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 Capital
• Debt to Assets
• Financial Leverage

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Lam Research Corp. 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