Financial statement analysis and common stock valuation

Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

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.

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Oracle 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 Oracle Corp. balance sheet.

Income Statement

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

Analysis of Liquidity Ratios
Quarterly Data

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

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

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.

Analysis of Profitability Ratios

Measures the income of Oracle Corp. 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-Size Balance Sheet: Liabilities and Stockholders’ Equity

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

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

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

• Short-term Activity Ratios (Summary)
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Receivable Collection Period
• Average Payables Payment Period

Dividend Discount Model (DDM)

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

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

Common-Size Income Statement
Quarterly Data

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

Balance Sheet: Assets

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