Decreased is mainly due to that major sales of McDonald comes from Europe which is at depreciation now. When this cases to happen growth return can be expected. In general companies results are slightly negative.

Companies balance sheet is average and have worsening equity level, which have drooped to 41% at Q3. Before it was around 45% which was more comfortable level. It was because share repurchase and dividends were over Net Income and due to that Equity has decreased. On the other hand due to increased Net income in past five year return on asset has increased. Liquidity is just ~1 which is not good. This might be just one time thing, because it was always around 1,2. In general companies balance structure is average.

Share value:

Companies share book value is ~13,8$. Current market price is ~87$ which shows that market is paying ~73$ more, or more then 13,5 years of Net Income, which is 5,4 bn.$ which is a bit over then average but still in normal zone. Share profitability (Share market price/Net income before Depreciation) is 6,2% which is a bit lower then average. In general share value is a bit high.

Company has anounced that they increase dividends to 0,77$/share quarterly dividends  or 3,08$/quarter) before tax or 3,55% investment yield, which is quite good. Payout ratio would be around 60%, which is a bit high.  5 year analysis show stable EPS and dividend growth, which is good. Company can be treated as long term stable growth stock. Investment is good for investment, but not to big.

Coca-cola main income is from its original North America.  There company sale almost 1/2. Since US economy is recovering further growth can be expected. In 2010 companies acquired bottling segments has 2,2 bn.$ or ~17% of total group sales.  In general companies results are slightly positive.

Companies balance sheet has issues with equity level. Which has droped quite a lot from good 51% at Y2008 and Y2009 to only 38% now. Another issue is Return on equity. It is stable 27%. But knowing that Equity level has decreased quite a lot that is a bad thing. Major decrease was in Y2010, since then equity level has not improved due to increased level of profit sharing with companies shareholders trough share repurchase and dividends. If at Y2008-2009 68-69% of Net Income was spent on Dividends then in 2010-2011 it increased to 75% and 84% so company is basically paying out everything that it earns and not leaving a lot in the company, which is not good for companies long term growth. At first 9 month of Y2012 this level stays at high 80%. On the other hand its not over 100% like in some other companies. At Y2010 company has acquired major bottler CCE with its quite large amount of debts. Although this has increased companies diversification but its ratios has worsened. It would be nice to see company accumulating more equity and deceasing debt level to return into stable balance sheet like it was at Y2009. In general companies balance structure is bit risky.

Share value:

Companies share book value is ~7,4$. Current market price is ~37$ which shows that market is paying ~29,7$ more, or more then 15 years of Net Income, which is 8,8 bn.$. This is quite a lot taking into consideration that companies balance structure is a bit risky. Share profitability (Share market price/Net income before Depreciation) is only 5,3% which is lower then average. The only risk lowering factor is stable sector – consumer good production. In general share value is very high.

Company at the moment pays 1,02$/share annual dividends (0,255$/quarter) before tax or 2,7% investment yield, which is average. Payout ratio is around 50%, which is normal and well balanced cash flow management.  5 year analysis show stable EPS and dividend growth, which is good. Company can be treated as long term stable growth stock. Investment is good for portfolio diversification but to pricey for heavier investment unless it would drop below 32$ or so.

Analysis source: Coca-cola 2012 3Q financial results

British petroleum - although companies share value has increased from ~38$ to ~43$ compared to Q1 its results remain very good. 2Q results were negative due to 4,8 bn.$ impairment due to stooped Alaska project. Even tough companies share profitability remains very good 12,7%. When this impairment effect cases profitability will be even hither. Due to good profitability and divined yield with low payout ratio this share earns highest 5 star rating.

Chevron – another oil company with comparably low share market price. Although its share value has also increased from 99$ to 117$ its profitability remain very good 11,5% with stong balance and good dividend yield 3,1% (payout only 27%) share earns highest 5 star rating.

Intel – largest computer processor producer in the world. Its results are positive with growing sales ans earnings. Balance sheet is strong. Since companies share value has decreased from 26$ to 23$ its figures has increased further. Profitability is just over 10%. Company is a strong 4 star rating.

Exxon Mobile – major oil company with acceptable balance sheet and positive results. Share price has increased from 82$ to 92$ but still its profitability remains very good 10,4%. Company is a strong 4 star rating.

Vodaphone – UK mobile pone giant, but with major market in Europe its results are negative, buts due to that companies share price is very close to is balance equity/share value, just 0,6 years of net income in difference,  but its profitability is not so great only 7,7%. Equity level is acceptable but liquidity ratio is just below <1. Due to that is a weak 4 star rating. 

Microsoft – Companies results are quite flat. Company is hardly competing in new mobile an tablet markets but remain a strong leader in its windows market. But companies share price is a bit price pricing over 10 years of net earnings on equity/share top. With dividend yield of 3,1% and quite goo  share profitability of 6,7% makes company a strong 3 star rating.

McDonald’s – largest fast food chain in the world. Companies results are a bit negative with falling sales and profit, although balance sheet is quite good. Companies share evaluation is very high almost 15 years of net income on top of equity/share. But due to still acceptable 5,4% profitability and quite good dividend yield of 3,4% it earns a 3 star rating.

Wal-Mart – US retail giant. Companies results are positive an growing, but companies balance sheet is a bit risky with >1 liquidity ratio. Also companies share evaluation is quit high +11 years of earnings. Profitability is average 6,4% but dividend yield is only 2,2%. So company finishes 3 star rating.

Procter & Gamble – large US consumer good producer. Companies results are a bit positive, but its <1 liquidity makes its balance a bit risky. Companies share price is very high with 15 years of Net income on top of equity/share. Although its dividend yield is quite good 3,2% buts its payout ratio is very high 72% with share profitability only 4,5%. Due to that it earns only 2 star rating.

Jonson & Jonson – Another well known US company that share price is very high. Companies results are average while balance sheet is acceptable. Share price is 15 year of Net income on top of equity/share and as PG dividend yield is quite good 3,5% payout ratio is very high 78% with share profitability only 4,6%. Due to that it earns only 2 star rating.

Coca-Cola – largest soft drink producer. Company is very over evaluated. Share price is 16,3 years of Net income on top of equity/share and its profitability is 5%. Dividend yield is 2,7% with acceptable 54% payout ratio. Companies results are good – sales and profit are increasing, but equity level is quite low 38% so balance sheet is a bit risky. Due to that company earns a low 2 star rating.

Apple – with its “I must have” iPhone an iPad products company is the largest in the world by market capitalization. Although companies latest results were negative they should improve with its newly launches iPad and iPhone. Balance sheet is very strong with large cash reserve, but companies share evaluation is quite high with 13 years of Net income on top of equity/share and share profitability of quite good 6,4% makes it attractive, but dividend yield is very low 1,6% so due to that is a weak 2 star rating.

Google – largest internet marketing company. Companies results are good and balance sheet is strong, but share price is very high with 16,5 years of Net Income on top of equity/share and low share profitability of 4,5%. With no dividend this share earned only 1 star rating.

IBM – due to very low equity only 18% company is of investment list. Also its share price is quite high 14 years of Net income on top of equity/share and dividend yield is only 1,6%. So company earns a 1 star rating.

 Facebook – a no go share that can be evaluate only by expectations. So company earns a 1 star rating.

Voting results are that Coca-Cola and McDonalds are included into analysed companies. Their more detailed analysis will be provided in short time. Also i’m taking a challenge to test my financial analysis of companies and their evaluation by making a virtual 1m.$ portfolio and tracking its performance. Companies analysis will be not each quarter from now. My goal will be to analyse each company at least once a year with more depth and long term view.

Decrease is in all segments. Most in System and Technology -9% least in most profitable segment of Software, which stayed unchanged. In general companies results are average.

Balance structure continues to be unacceptable due to very low equity, which remain 18%, due to very aggressive dividend (0,9 bn.$) and share repurchase (2 bn.$) which is ~60% ouf of Net income before depreciation (5 bn.$) and this level can be considered as quite high. Due to low equity high return on equity is generated, which is around 60-70%.

Even if we take into consideration part of companies activity as financial equity remains to low. Liquidity is just above acceptable 1 level and is around 1,2.  In general companies balance structure is aggressive.

Share value:

Companies share basic value is ~18$ (unchanged compared with Q1). Current market price is ~205$  (Δ+5%/197$) which shows that market is paying ~187$ more or 10,1 years (10,0 years) of Net income before Depreciation earnings which is 21 bn.$ (Δ+0,5%/20,9$), which is a lot taking into consideration that companies balance structure is very aggressive. Share profitability (Share market price/Net income before Depreciation) is 9,0% (9,1%) which is a bit better then average.

Company at the moment pays 3$/share annual dividends (0,75$/quarter) before tax or 1,5% (1,7%) investment yield, which is low. Since no growth is predicted dividend level should stay the same. In general share evaluation is to high and has decreased further due to increased share price, also balance structure is very aggressive. 

Analysis source: IBM 2012 2Q financial results

Previous analysis: IBM 2012 1Q financial analysis

Main sales comes from US which increased by 3,8% Bigest growth comes from Walmart International increased by 6,4%  In general companies results are positive.

While companies results shows good results balance sheet is quite different. Equity level is floating around 35% which is acceptable level for retailer but ~50% would be comfortable. Another thing is liquidity ratio below 1, which has dropped to 0,82 at Q2, this is a bit woring. Altough this is a way to maximise profit by using long pyment defer as a way to finance woring capital, but this is not good for long term companies stability. Altoug this ratio below 1 is normal to all supermarkets as this is they key thing in their business that large deffer payment from your suppliers that will fund your expatiation while your costumers pay you instantly that way funding your inventory storage. Inventory turnover is 32 days, account payables 38 both in line. This differences makes to ~10 bn.$ in working capital surplus which fund companies long term asset like competitors chain acquisition ect.

Low equity level allows to have good return on asset. Its around 20-25% at first 3 quarters and around 30% at Q4 with sale season time. Companies paid 1,4 bn.$/Q in dividends and spend 1,6 bn.$ in share repurchase which is ~1/2 of total companies earnings which is very normal level. Other 1/2 is left in the company for further expantion.  In general companies balance sheet can be treated as a bit risky.

Share value:

Companies share basic value has decreased to ~20,8$ (Δ+2%/20,4$ compared with Q1). Current market price is ~74$  (Δ+17,5%/63$) which shows that market is paying 53$ more or 7,2 years (5,8 years) of Net income before Depreciation earnings which is 25,2 bn.$ (24,7 bn.$). Companies shares market evaluation has worsened due to increase of share value, but still remains reasonable. Share profitability (Share market price/Net income before Depreciation) is 10,0% (11,6%) which is remains quite good, but decreased.

Company pays 0,3975$/share/quarter dividend or ~2,2% (2,5%) dividend yield which is average, with dividend payout ratio ~22% which is also a good level. Company has increased its dividend payment by 9+% compared to last year. Companies cash flow management can be considered as well balanced. In general share evaluation and profitability remains reasonable for long term investments, but figures has decreased due to 17% increased share value, also taking into comsideration a bit risky balance sheet.

Analysis source: Walmart 2012 2Q financial results

Previous analysis: Walmart 2012 1Q financial analysis

Companies main sales goes to Assia-Pacific region. Since this region will continue to show largest growth that is a good news. Compared to previous year sales in Assia-Pacific is up. Sales are down in Americas, so company is losing at this market. Surprisingly sales in Europe are also up dispute recession in EU.

Main 2/3 of companies revenue and profit comes from PC area, which is up both in revenue and profit.

According to http://www.cpubenchmark.net Intel share in CPU market remains ~80% which is a good thing as company continues to hold on to its main market leader position and even growing it. In general companies results are positive.

Companies Equity level remains strong and is up a little bit to 67%. Equity has finally showed stable increase. Previously it has decreased due to quite aggressive share repurchase spending in Y2011 in total 12,3 bn.$. Not in 2012 1 half year these spending are much more balance and only reach 1,2 bn.$ Dividend payment is 2,1 bn.$/half-year. In total its 3,3 bn.$ or 36% from earned 9,2 bn.$ in half-year which is good level. Equity level of ~80% was quite strong, so its decrease in order to increase earning per share is quite responsible. Good thing it did not continued.

Other companies ratios are also good. Liquidity ratio is over 2,5. Cash and investments holds ~9 bn.$ which is ~1/8 of total companies asset. Inventory and account receivables turnover is around 30 days which is good. Companies investments into long term property (equipments, plants ect.) is 2-3 bn.$/quarter which is good because this will bring profit in the future. In general companies balance structure is strong.

Share value:

Companies share basic value has decreased to ~9,7$ (Δ+3%/9,4$ compared with Q1). Current market price is ~26$  (Δ-7%/28$) which shows that market is paying 16,5$ more or 4,6 years (5,1 years) of Net income before Depreciation earnings which is 18,1 bn.$ (Δ+1%/17,9$). Companies shares market evaluation is quite good. Share profitability (Share market price/Net income before Depreciation) is 13,7% (12,8%) which is quite good.

Company pays 0,225$/share/quarter dividend or ~3,4% (3,2%) dividend yield which is good, with dividend payout ratio ~25% which is also a good level. Company has increased its dividend payments up from 0,21$ to 0,225$ or by +8% compared to last year. Companies cash flow management can be considered as well balanced. In general share evaluation and profitability is quite good and has improved since last review due to decrease of share price.

Analysis source: Intel 2012 2Q financial results

Previous analysis: Intel 2012 1Q financial analysis

Growth is defiantly driven by user number increase which continue to grow almost in a straight line, about by +6% compared to Q1 and reached almost 1 bn. Mobile active users. This growth will come to a halt one way or another, because of market fill-up effect which can be seen in US/Canada figures where growth is only from 183 m. to 186 m. or by just +1,6%. Mobile user growth shows even larger increase from 488 m. to 543 m. of increase by +11%. In general companies results hard to evaluate and bases more on expectations of the future growth.

Companies balance structure is quite good with strong equity base which after IPO has even increased further up to 89%. Most of IPO 6,7 bn.$ was not spent, but ~6 bn.$ went to short term investments. ~0,9 bn.$ went to property and equipment purchase, 0,6 bn.$ went to acquisition of patents from IBM. Also 1,1 bn.$ of these funds will be used for Instagram and face.com. So company id not spent all of their money, but sure have places were to put them. Liquidity has gone up to 12. High  equity lead to other issue – low return on equity, so company need to show ability to generate more revenue and profit for increased equity. In general companies balance structure is strong. 

Share value:

Companies share basic value is ~6,2$. Present market value of the share is 19$ or 12,8$ more then its basic value. Net income before Depreciation is hard to evaluate due to increase of expenses after IPO, but previously 1,5 bn.$/year level can be taken as a base for calculation, that leads to 8,5 years, which is quite a reasonable number taking into consideration that present increase of expenses may lead to visible growth in the future, but that is only an expectation. This figure is a lot better then 21 years at 38$ IPO time, due to share losing 1/2 of its value since then. Share profitability (Share market price/Net income before Depreciation) is just 3,7% which is still a very low level if using base 1,5 bn.$ Net income. It is due to companies IPO that largely increased its equity, but company does not yet showed its ability to generate more profit by now. In general share value is more reasonable then previously, but companies evaluation is mainly based on expectations, not actual figures.

Analysis source: Facebook 2012 2Q financial report

Previous analysis: Facebook 2012 1Q (IPO) financial analysis

Income structure shows that companies main product Windows Revenue has decreased from 4,7 bn.$ to 4,1 bn.$, this is defiantly not a good sign, but hopes are in newly launching Windows8. Net income has also drooped from this vital segment from 2,9 bn.$ to 2,4 bn.$. This could signal that company is losing its market to net Apple iPad and other tablets, but company is launching its own tablet at the end of this year, so things could turn. Growth came from companies Business and server segments, this segment is the one that keeps companies small growth. Also surprisingly Entertainment segment is also increased its sales, but still remains a loss segments for Microsofts. Online services is very tiny – 0,7 bn.$ so Microsoft goal to compete with Google is far from reach also 6.2 bn.$ write-off was from this segment

According to http://www.netmarketshare.com Windows share in desktop computers remain hard 92% and almost remain unchanged. But Desktop computers are losing ground to mobile technologies as Mobile device market is dubbing each year.  In general companies results are average.

Major change in balance is a decrease of Goodwill, other remain mainly unchanged. Equity level has decreased to 54% and is in good level. Return on asset was negative this quarter.

Liquidity ratio remains good 2,6 due to large Cash and short term investment reserve – 63 bn.$ (~1/2 of total asset) which has increased from ~59 bn.$ since last quarter.

Last 4 quarter Divident payments was 6,4 bn.$, share repurchase for 3,1 bn.$ in total Capital spending were 9,5 bn.$, that’s 37% of 26 bn.$  generated Net income before depreciation and goodwill write-off, which is a good level.  In general balance structure is acceptable.

Share value: 

Companies share basic value has decreased to ~7,8$ (Δ-5%/8,2$ compared with Q1) due to write-offs.  Current market price is~31$  (Δ-3,1%/32$) which shows that market is paying 23,2$ more or 7,5 years (7,7 years) of Net income before Depreciation earnings which is 26 bn.$, excluding 6,2 bn.$ write-off. Share evaluation remains quite high. Share profitability (Share market price/Net income before Depreciation) is 10,0% (Δ+0,1%/9,7%) which is a bit better then average and has increased a little bit due to reduced share number.

Company announced that it will remain paying 0,2$/share a quarter dividend. Dividend yield is ~2,6% (2,5%) dividend yield which is a bit low. Dividend growth is not projected as companies generated profit is not growing and even decreasing a little bit. In general companies share value is a bit pricey and company further growth is questionable. 

Analysis source: Microsoft  2012 2Q Financial Results

Previous analysis: Microsoft 2012 1Q financial analysis

Companies sales by geography show source of this decrease. Although sales in US has increased by 3% and sales in Europe has decrease by -6% due to Europe decline, Apple lose of positions in Asia was the main reason. There sales has drooped more then 20%. This fastest growing market in the world was companies main drive in past, but now it seems that Apple is losing in Asia to Samsung.

iPhone sales has declined by -28% compared to Q1. It seams that iPhone has reached it peak and iPad increase does not overweight that, so it is possible that we will see sale slowing down or even decreasing in the future unless Apple will come up with something new. Either way Apple will defiantly have a significant market share in coming future. iPod and Mac are slowly perishing as products of the past.

According to http://www.netmarketshare.com Apple share in mobile and tabled marked has increased from 60% to 65% and is better then its main competitors Google Android which has increased only from 19% to 20%. But never the less big battle is projected in the future at this marked between Google and Apple. In general companies results are  negative due to visible slowdown or even decrease.

Balance sheet continue to be very strong. Equity level has increased a bit to 69%. High equity and profit decrease in past few quarters leads to visible decline in return on equity, which is drooped to 28%. It is even lower then previous courtiers before “the big jump” in Q4 where it was 35%-40%. So that is bad news for the company. Company paid it first dividends 2,65$/share or 2,5 bn.$ for the company. Dividend payout ratio is ~25% which is a good level. Also Apple will start repurchasing its shares, these expenses will be visible only in next quarter.

No other major changes at the balance sheet. In general companies balance structure is good.

Share value: 

Companies share basic value is ~119$ (Δ+9,4%/109$ compared with Q1).  Current market price is ~648$  (Δ+6,2%/610$). which shows that market is paying ~529$ more or 12,3 years (11,4 years) of Net income before Depreciation earnings, which shows that companies shares are over evaluated. Share profitability (Share market price/Net income before Depreciation)  is 7,1% (7.2%) which is  average. Main figures has decreased due to faster increase of share value then its profit and taking into consideration that companies profit show slowdown or even decrease this is not a good news. Company announced that it will pay 2,65$/share/quarter dividend or ~1,6% (1,7%) dividend yield which is a bit low due to high share price.  In general companies share is over evaluated.

Analysis source: Apple 2012 2Q financial results

Previous analysis: Apple 2012 1Q financial analysis

After acquisition of Motorola Google income became a bit more diversified. Although Motolola is just ~10% of Google income, but its a start. Income from Google website and google network has increased by ~20% compared to previous year. Main companies revenue source 2/3 is still from Google.com website.

According to http://www.netmarketshare.com Google share in search engine market stays stable around 80% so Google continues to be #1 without any notable competition. And in Mobile devices Google share is even larger ~90%.

Company is competing in its competitors fields: 1) Google+ competing with Facebook; 2) Chrome with Microsoft Explorer and 3) Android mobile + Motorola acquisition competing with Apple IPhone/IPad. As Mobile device market is almost dubbing each year this is were the main battle will be fought.

At mobile operating system Google Android has increased its share a bit from 19% to 20%, but Apple (iOS) stays on top with its market share increased from 60% to 65%. So Google at the moment is behind Apple and the gap is even widening.

Company is gaining ground in new segments and is firmly holding its main search market. In general companies results are positive.

Balance structure continues to be very strong even after Motorola integration who had quite a lot of debts. Equity level has decreased only to 75% which is a very good ratio. ROE has drooped to 17% and should be monitored closely in the future. Liquidity level 3,8 very good due to large cash and equivalent reserves which drooped a bit at Q2 from 49 bn.$ to 43 bn.$ due to acquisition of Motorola, but still this is equals of 1/2 of total companies asset. Motorola acquisition is visible in Fixed asset increase from 20 bn.$ to 32 bn.$. In general companies balance structure remains strong.

Share value: 

Companies share basic value is ~198$ (Δ+4,2% from 190$ compared with Q1).  Current market price is ~673$  (Δ+11,1% compared to past analysis time 606$) shows that market is paying 475$ more or 11,7 years (10,6 years) of Net income before Depreciation earnings, which quit a lot. Due to high share market value increase in past quarter its price got even more over evaluated.  Share profitability (Share market price/Net income before Depreciation) is 6,0% (6,5%) which is also low. In general share is over evaluated and got even more over evaluated since 1Q analysis.

Analysis source: Google Second Quarter 2012 Financial Results

Previous analysis: Google 2012 1Q financial analysis