Financial statement analysis and common stock valuation

Analysis of Geographic Areas

Take-Two Interactive Software Inc. operates in 2 regions: United States and International.

• Area Asset Turnover
• Net revenue
• Fixed assets, net

Analysis of Revenues

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

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

Enterprise Value to EBITDA (EV/EBITDA)

To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.

• Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
• EV to EBITDA Ratio, Current
• EV to EBITDA Ratio, Historical

Income Statement

The income statement (statement of earnings) reports on the performance of Take-Two Interactive Software Inc., the result of its operating activities.

Balance Sheet: Assets

The assets reports major classes and amounts of resources owned or controlled by Take-Two Interactive Software Inc..

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

Evaluates revenues and output generated by the Take-Two Interactive Software Inc. assets. Operating performance ratios describe the relationship between the Take-Two Interactive Software Inc. 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

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

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

Cash Flow Statement

The cash flow statement provides information about Take-Two Interactive Software 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 Take-Two Interactive Software Inc. balance sheet.