Financial statement analysis and common stock valuation

Analysis of Revenues

• Revenues as Reported

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• FCFE Growth Rate (g)

Analysis of Solvency Ratios

Examines Eaton Corp. plc 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 Equity (including Operating Lease Liability)
• Debt to Capital
• Debt to Capital (including Operating Lease Liability)
• Debt to Assets
• Debt to Assets (including Operating Lease Liability)
• Financial Leverage
• Interest Coverage
• Fixed Charge Coverage

Analysis of Liquidity Ratios

Measures the adequacy of Eaton Corp. plc 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 Eaton Corp. plc.

Analysis of Debt

• Total Debt (Carrying Amount)
• Total Debt (Fair Value)
• Weighted-average Interest Rate on Debt

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Eaton Corp. plc equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to Equity (FCFE)
• P to FCFE Ratio, Current
• P to FCFE Ratio, Historical

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

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

Income Statement
Quarterly Data

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

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

Evaluates revenues and output generated by the Eaton Corp. plc assets. Operating performance ratios describe the relationship between the Eaton Corp. plc 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

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