Financial statement analysis and common stock valuation

Common-Size Income Statement

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

Income Statement

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

Analysis of Geographic Areas

Eaton Corp. plc operates in 5 regions: United States; Canada; Latin America; Europe; and Asia Pacific.

• Area Asset Turnover
• Net sales
• Long-lived assets

Common-Size Income Statement
Quarterly Data

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

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Eaton Corp. plc 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 Eaton Corp. plc balance sheet.

Balance Sheet: Assets
Quarterly Data

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

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Eaton Corp. plc 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

Analysis of Short-term (Operating) Activity Ratios

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

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.

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

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