Financial statement analysis and common stock valuation

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

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

Analysis of Geographic Areas

Amgen Inc. operates in 2 regions: United States and Rest of world (ROW).

• Area Asset Turnover
• Revenues
• Property, plant and equipment, net

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.

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.

Income Statement
Quarterly Data

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

Analysis of Liquidity Ratios
Quarterly Data

Measures the adequacy of a Amgen Inc. cash resources to meet its near-term cash obligations.

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

Common Stock Valuation Ratios

Relative valuation technique determine the value of Amgen 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.

• Current Valuation Ratios
• 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)

Dividend Discount Model (DDM)

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

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

Analysis of Liquidity Ratios

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

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

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Amgen 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.

Common-Size Income Statement

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