Financial statement analysis and common stock valuation

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Sherwin-Williams Co. 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 Sherwin-Williams Co. balance sheet.

Common-Size Income Statement

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

Analysis of Long-term (Investment) Activity Ratios
Quarterly Data

Measures how efficiently Sherwin-Williams Co. 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 Liquidity Ratios

Measures the adequacy of Sherwin-Williams Co. cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.

Analysis of Long-term (Investment) Activity Ratios

Measures how efficiently Sherwin-Williams Co. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
• Total Asset Turnover
• Equity Turnover

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Sherwin-Williams Co. 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 Sherwin-Williams Co. earnings.

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

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Sherwin-Williams Co. 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)

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

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Sherwin-Williams Co. 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.

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)

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Sherwin-Williams Co. 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