Financial statement analysis and common stock valuation

Common Stock Valuation Ratios
Quarterly Data

Relative valuation technique determine the value of Texas Instruments 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.

• 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 Profitability Ratios

Measures the income of Texas Instruments 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)

Analysis of Long-term (Investment) Activity Ratios

Measures how efficiently Texas Instruments Inc. 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

Texas Instruments Inc. operates in 6 regions: United States; China; Rest of Asia; Europe, Middle East and Africa; Japan; and Rest of world.

• Area Asset Turnover
• Revenue
• Property, plant and equipment

Analysis of Profitability Ratios
Quarterly Data

Measures the income of Texas Instruments 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)

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

• Rates of Return
• Variance and Covariance
• Systematic Risk (β) Estimation
• Expected Rate of Return

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Texas Instruments 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 Texas Instruments Inc. earnings.

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

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Texas Instruments 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

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Texas Instruments Inc. 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 Liquidity Ratios

Measures the adequacy of Texas Instruments Inc. cash resources to meet its near-term cash obligations.

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

Balance Sheet: Assets

The assets reports major classes and amounts of resources owned or controlled by Texas Instruments Inc..

Analysis of Revenues

• Revenues as Reported