Stock Analysis on Net

Raytheon Co. (NYSE:RTN)

$22.49

This company has been moved to the archive! The financial data has not been updated since February 12, 2020.


The Company Profile

Basic information about Raytheon Co.


Financial Statements

Income Statement

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

Statement of Comprehensive Income 

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

Balance Sheet: Assets 

The assets reports major classes and amounts of resources owned or controlled by Raytheon Co..

Balance Sheet: Liabilities and Stockholders’ Equity

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.

Cash Flow Statement

The cash flow statement provides information about Raytheon 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 Raytheon Co. balance sheet.


Common-Size Financial Statements

Common-Size Income Statement 

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

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

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


Analysis of Financial Ratios

Analysis of Liquidity Ratios 

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

Analysis of Short-term (Operating) Activity Ratios 

Evaluates revenues and output generated by the Raytheon Co. assets. Operating performance ratios describe the relationship between the Raytheon Co. level of operations and the assets needed to sustain operating activities.

Analysis of Reportable Segments

Raytheon Co. operates in 5 segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint.

Analysis of Geographic Areas

Raytheon Co. operates in 2 regions: United States and All other.


Relative Valuation

Common Stock Valuation Ratios

Relative valuation technique determine the value of Raytheon Co. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.

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.

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.

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Raytheon Co. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Raytheon Co. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.


Discounted Cash Flow (DCF) Valuation

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.

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Raytheon Co. common stock issue as the present value of all future dividends.

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.


Operating Profit Margin
since 2005

Raytheon Co. profitability ratio calculated as operating income divided by revenue.

Return on Equity (ROE)
since 2005

Raytheon Co. profitability ratio calculated as net income divided by shareholders’ equity.

Current Ratio
since 2005 

Raytheon Co. liquidity ratio calculated as current assets divided by current liabilities.

Debt to Equity
since 2005

Raytheon Co. solvency ratio calculated as total debt divided by total shareholders’ equity.

Price to Earnings (P/E)
since 2005

The P/E ratio tells analyst how much an investor in Raytheon Co. common stock pays per dollar of current earnings.

Price to Operating Profit (P/OP)
since 2005 

Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit.

Price to Book Value (P/BV)
since 2005

The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return.

Price to Sales (P/S)
since 2005

An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative.


Analysis of Components of Financial Statements


Financial Reporting Quality

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Raytheon 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 Raytheon Co. earnings.