Financial statement analysis and common stock valuation

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Chevron Corp. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Chevron Corp. earnings.

• Balance-Sheet-Based Accruals Ratio
• Cash-Flow-Statement-Based Accruals Ratio

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Chevron Corp. 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

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

Dividend Discount Model (DDM)

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

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.

Income Statement

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

Analysis of Solvency Ratios
Quarterly Data

Examines Chevron Corp. 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 Capital
• Debt to Assets
• Financial Leverage
• Interest Coverage

Analysis of Reportable Segments

Chevron Corp. operates in 2 segments: Upstream and Downstream.

• Segment Profit Margin
• Segment Return on Assets (Segment ROA)
• Segment Asset Turnover
• Segment sales and other operating revenues
• Segment net income (loss)
• Segment assets

Analysis of Short-term (Operating) Activity Ratios

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

Analysis of Debt

• Total Debt (Carrying Amount)
• Total Debt (Fair Value)
• Weighted-average Interest Rate on Debt
• Interest Costs Incurred
• Adjusted Interest Coverage Ratio

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing Chevron Corp. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Cash Flow Statement
Quarterly Data

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