Financial statement analysis and common stock valuation

Dividend Discount Model (DDM)

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

Analysis of Profitability Ratios

Measures the income of AutoZone 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
Quarterly Data

Measures how efficiently AutoZone Inc. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Total Asset Turnover
• Equity Turnover

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about AutoZone Inc. 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 AutoZone Inc. balance sheet.

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to AutoZone Inc. 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

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

Statement of Comprehensive Income

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

Balance Sheet: Assets

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

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

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

Analysis of Reportable Segments

AutoZone Inc. operates in 2 segments: Auto Parts Stores and Other.

• Segment Profit Margin
• Segment Return on Assets (Segment ROA)
• Segment Asset Turnover
• Net sales
• Gross profit
• Segment assets