ratio analysis paper and Powerpoint
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RepublicServices1.xlsxLiquidity
| Republic Services | 2016 | 2017 | 2018 | Republic Services (in millions) | 2016 | 2017 | 2018 | |
| Current Ratio | 0.7 | 0.5 | 0.6 | Current Assets | 1,284.5 | 1,436.8 | 1,564.4 | |
| Current Liabilities | 1,812.0 | 2,634.8 | 2,718.6 | |||||
| WCI | 2016 | 2017 | 2018 | WCI (in thousands) | 2016 | 2017 | 2018 | |
| Current Ratio | 1.1 | 1.5 | 1.3 | Current Assets | 743,392 | 1,176,868 | 1,092,903 | |
| Current Liabilities | 692,177 | 802,599 | 860,709 |
Leverage
| 2016 | 2017 | 2018 | 2016 | 2017 | 2018 | |||
| Debt to Ratio | 62.7% | 62.4% | 63.3% | Total Asset | 20,629.6 | 21,147.0 | 21,617.0 | |
| Stockholder Equity | 7,693.7 | 7,961.1 | 7,929.5 | |||||
| Debt to equity | 99.5% | 94.0% | 96.4% | Total Liabilities | 12,935.9 | 13,185.9 | 13,687.5 | |
| total Long Dept | 7,653.1 | 7,480.7 | 7,646.8 | |||||
| Times interest earned | 421.3% | 449.4% | 479.6% | EBIT | 1,537.3 | 1,668.5 | 1,735.8 | |
| Interest | 364.9 | 371.3 | 361.9 | |||||
| 2016 | 2017 | 2018 | 2016 | 2017 | 2018 | |||
| Debt to Ratio | 49.1% | 47.8% | 48.8% | Total Asset | 11,103,925 | 12,014,681 | 12,627,329 | |
| Stockholder Equity | 5,654,877 | 6,274,070 | 6,460,188 | |||||
| Debt to equity | 64.0% | 62.2% | 64.3% | Total Liabilities | 5,449,048 | 5,740,611 | 6,167,141 | |
| total Long Dept | 3,616,760 | 3,899,572 | 4,153,465 | |||||
| Times interest earned | 8.9769 | 5.0049 | 3.4238 | EBIT | 832,244 | 627,098 | 452,298 | |
| Interest | 92,709 | 125,297 | 132,104 |
Activity
| Republic Services | ||||||||
| 2016 | 2017 | 2018 | 2016 | 2017 | 2018 | |||
| Inventory turnover | x | x | x | COO | 6,150.0 | 6,214.6 | 5,764.0 | |
| Inventory | x | x | x | |||||
| Collection period | 38.7 | 40.2 | 40.1 | Account receivable | 994.8 | 1,105.9 | 1,102.7 | |
| Credit sales per day | 25.7 | 27.5 | 27.5 | |||||
| Total asset turnover | 45.5% | 47.5% | 46.4% | Sales | 9,387.7 | 10,041.5 | 10,040.9 | |
| Total assets | 20,629.6 | 21,147.0 | 21,617.0 | |||||
| WCI | ||||||||
| 2016 | 2017 | 2018 | 2016 | 2017 | 2018 | |||
| Inventory Turnover | x | x | x | COO | 1,957,712 | 2,704,775 | 2,865,704 | |
| Inventory | x | x | x | |||||
| Collection Period | 36.0 | 43.7 | 65.9 | Account receivable | 485,138.0 | 554,458.0 | 609,545.0 | |
| Credit sales per day | 13,487.5 | 12,686.3 | 9,248.9 | |||||
| Total asset turnover | 44.3% | 38.5% | 26.7% | Sales | 4,922,941.0 | 4,630,488.0 | 3,375,863.0 | |
| Total assets | 11,103,925.0 | 12,014,681.0 | 12,627,329.0 |
Profitability
| Republic Services | 2016 | 2017 | 2018 | Republic Services (in millions) | 2016 | 2017 | 2018 | ||
| Gross profit margin | 38.6% | 38.1% | 38.8% | Operating income | $1,537.5 | $1,668.5 | $1,735.8 | ||
| Net profit margin | 6.6% | 12.7% | 10.3% | Net Income | $623.2 | $1,279.0 | $1,037.6 | ||
| Total Assets | $20,629.6 | $21,147.0 | $21,617.0 | ||||||
| Operating margin | 16.4% | 16.6% | 17.3% | Total Liabilities | $12,935.9 | $13,185.9 | $13,687.5 | ||
| Equity | $7,693.7 | $7,961.1 | $7,929.5 | ||||||
| Return on Asset | 3.0% | 6.0% | 4.8% | ||||||
| Return on equity | 8.1% | 16.1% | 13.1% | ||||||
| Sale | $9,387.7 | $10,041.5 | $10,040.9 | ||||||
| Cost of operarion | $5,764.0 | $6,214.6 | $6,150.0 | ||||||
| Gross Profit | $3,623.7 | $3,826.9 | $3,890.9 | ||||||
| WCI | 2016 | 2017 | 2018 | WCI (in thousands) | 2016 | 2017 | 2018 | ||
| Gross profit margin | 42.0% | 41.6% | 41.8% | Operating income | 452,298 | 627,098 | 832,244 | ||
| Net profit margin | 7.3% | 12.5% | 11.1% | Net Income | 247,321 | 577,420 | 547,154 | ||
| Total Assets | 11,103,925 | 12,014,681 | 12,627,329 | ||||||
| Operating margin | 13.4% | 13.5% | 16.9% | Total Liabilities | |||||
| Equity | 5,654,877 | 6,274,070 | 6,460,188 | ||||||
| Return on Asset | 2.2% | 4.8% | 4.3% | ||||||
| Return on equity | 4.4% | 9.2% | 8.5% | ||||||
| Sale | 3,375,863 | 4,630,488 | 4,922,941 | ||||||
| Cost of operarion | 1,957,712 | 2,704,775 | 2,865,704 | ||||||
| Gross Profit | 1,418,151 | 1,925,713 | 2,057,237 |
Priceearnings
| Republic Services | 2020/2021 | Price per share | 100.04 | |
| Price/Earnigs | 30.04 | EPS | 3.33 | |
| WCI | Price per share | 102.75 | ||
| Price/earnings | 48.01 | EPS | 2.14 | |
WACC
| Debt | $14,562.9 | ||||||
| Equity | $8,120.9 | 35.8% | |||||
| Total Cap | $22,683.9 | ||||||
| Debt | $14,562.9 | ||||||
| Equity | $8,120.9 | 64.2% | |||||
| Total Cap | $22,683.9 | ||||||
| Dividends | |||||||
| Cost of Debt | Current market yield for Bond | 2.3% | 2019 | 2018 | |||
| Tax adjustment: | 0.375 | 0.345 | |||||
| 0.375 | 0.345 | ||||||
| tax rate | 17% | 83% | 0.405 | 0.375 | |||
| adj debt cost | 1.9% | 0.405 | 0.375 | ||||
| 1.56 | 1.44 | ||||||
| Cost of Equity | |||||||
| CAPM | Risk free rate | 1% | Growth Model | ||||
| Beta of company | 0.51 | Dividend | 1.56 | ||||
| market rate return | 12% | Current Price | 78.24 | ||||
| Dividend growth rate | 8.33% | ||||||
| K=risk free rate+beta(Market-risk free) | 6.6% | K=D/P+G | 10.33% | ||||
| Weight | Rate | Pro-rata | |||||
| Debt | $14,562.9 | 64.2% | 1.9% | 1.2% | |||
| Equity | $8,120.9 | 35.8% | 6.6% | 2.4% | |||
| $22,683.8 | 3.6% | ||||||
| WACC | 3.6% | ||||||
Working Capital
| Republic Services (in millions) | 2017 | 2018 | 2019 | WCI (in thousands) | 2016 | 2017 | 2018 | ||
| Current Assets | 1,436.8 | 1,564.4 | 1,606.0 | Current Assets | 743,392 | 1,176,868 | 1,092,903 | ||
| Current Liabilities | 2,634.8 | 2,718.6 | 3,064.6 | Current Liabilities | 692,177 | 802,599 | 860,709 | ||
| 2017 | 2018 | 2019 | 2016 | 2017 | 2018 | ||||
| Working Capital | -1,198.0 | -1,154.2 | -1,458.6 | Working Capital | 51,215 | 374,269 | 232,194 |
Capex
| 2019 | 2018 | CapEx=ΔPP&E+Current Depreciation | ||
| PPE | 8,383.50 | 8,020.10 | CapEx=Capital expenditures | |
| ΔPP&E | 363.40 | ΔPP&E=Change in property, plant, and equipment | ||
| Depreciation | 1,040.50 | |||
| Capex | 1,403.90 | |||
| Cash used in investing activities | -1,719.00 |
Free Cash Flow
| 2019 | Republic Services (in millions) | 2019 | 2018 | ||
| EBIT (in millions) | 1,282.1 | Current Assets | 1,606.0 | 1,564.4 | |
| Depreciation | 1,040.5 | Current Liabilities | 3,064.6 | 2,718.6 | |
| S G & A | 81.9 | ||||
| Operating Cash Flow | 2,322.6 | Working Capital | -1,458.6 | -1,154.2 | |
| Capex | 1,403.90 | Change in Working Capital | -304.4 | ||
| Free Cash Flow | 1,223.1 | ||||
| Revenue | 10,299.4 | ||||
| Drivers | Cost of operarion | 6,298.4 | |||
| Revenue | 10% | Gross Profit | 4,001.0 | ||
| Cost of Operation | 8% | ||||
| S G & A | 2% | ||||
| Depreciation | 3% | ||||
| Working capital | 10% | ||||
| Cap ex | 3% | ||||
| Fcast year 1 | Fcast year 2 | Fcast year 3 | Fcast year 4 | Fcast year 5 | |
| Revenue | 11,329.3 | 12,462.3 | 13,708.5 | 15,079.4 | 16,587.3 |
| Cost of Operation | 6,770.8 | 7,278.6 | 7,824.5 | 8,411.3 | 9,042.2 |
| Gross Margin | 4,558.6 | 5,183.7 | 5,884.0 | 6,668.0 | 7,545.1 |
| S G & A | 83.5 | 85.2 | 86.9 | 88.7 | 90.4 |
| Depreciation | 1,071.7 | 1,103.9 | 1,137.0 | 1,171.1 | 1,206.2 |
| Costs | 1,155.3 | 1,189.1 | 1,223.9 | 1,259.7 | 1,296.6 |
| EBIT | 3,403.3 | 3,994.6 | 4,660.1 | 5,408.3 | 6,248.5 |
| Operating Cash Flow | 4,475.0 | 5,098.5 | 5,797.1 | 6,579.4 | 7,454.7 |
| Working Capital | -1,604.5 | -1,764.9 | -1,941.4 | -2,135.5 | -2,349.1 |
| Change in working capital | -145.9 | -160.4 | -176.5 | -194.1 | -213.6 |
| Capex | 1446.0 | 1489.4 | 1534.1 | 1580.1 | 1627.5 |
| Free Cash Flow | 3,174.9 | 3,769.5 | 4,439.5 | 5,193.4 | 6,040.7 |
Terminal Value
| Fcast year 1 | Fcast year 2 | Fcast year 3 | Fcast year 4 | Fcast year 5 | Year (6 add on) | |
| FCF | 3,174.9 | 3,769.5 | 4,439.5 | 5,193.4 | 6,040.7 | 6,221.97 |
| WACC | 6.6% | 3% | ||||
| Discount: | 1 | 2 | 3 | 4 | 5 | $172,832.38 |
| Present Value | $2,978.30 | $3,317.20 | $3,664.92 | $4,021.84 | $4,388.38 | |
| Terminal Value | $125,556.47 | |||||
| $2,978.30 | $3,317.20 | $3,664.92 | $4,021.84 | $129,944.85 | ||
| Sum | $143,927.11 | |||||
| Shares (in millions) | 319,062,963.00 | As of February 7, 2020, the registrant had outstanding 319,062,963 shares of Common Stock | ||||
| Implied Shares | $451.09 | |||||
