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5-Minute QuickScan

5 Minute QuickScan
Date:
Basic Quality Standards Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Decision
Company Name Ticker .OB or .PK? Mkt Cap < $500M ? Recent IPO? 3 to 5 years Positive EBIT? 3 to 5 years of positive Cash Flow from Operating Activities? 5 years of ROE > 10%? 5 Years of Debt to Equity Ratio < 1? Recent Price to Book Ratio < 2? 3 years of only positive net Tangible Assets? Keep and Conitue to Analyze or Drop Company?
American Greetings Corp AM drop company

Data Input

Stock Ticker AM
Year 2014 2013 2012 2011 2010
Quote
Current Price 0
P/E 8.3656
Market Cap 556,293,060 [in million USD]
Shares Outstanding 0 [in million]
Earnings
Earnings Growth Rate
Company [Next 5 Years] 0 [in decimal]
Financials
Income Statement
2014 2013 2012 2011 2010
Total Revenue (Sales) 2,010,969 1,969,666 1,868,739 1,695,144 1,592,568
Gross Profit 0 0 0 0 0
Operating Income 144,406 136893 94,165 149565 174,702
Net Income 65,107 50522 49,918 57198 87,018
Interest Expense, Supplemental 36,020 27363 17,896 53073 25,389
Diluted Normalized EPS 0 0 0 0 0
Balance Sheet
2014 2013 2012 2011 2010
Total Inventory 248,577 254761 242,447 208945 179,730
Total Current Assets 633,417 609809 661,906 640959 700,924
Total Assets 1,535,695 1602443 1,583,463 1549464 1,532,402
Total Current Liabilities 418,943 415362 368,596 305,081 342,545
Total Long Term Debt 472,729 539114 286,381 225181 232,688
Total Liabilities 0 0 0 0 0
Retained Earnings (Accumulated Deficit) 113,729 86695 1,238,396 1210110 1,171,008
Total Equity 329,326 327447 681,877 727458 748,911
2014 2013 2012 2011 2010
Total Common Shares Outstanding 0 0 0 0 0
Cash Flow Statement
2014 2013 2012 2011 2010
Cash from Operating Activities 0 0 0 0 0
Capital Expenditures (Ignore the negative sign) 0 0 0 0 0
Fundamentals
Key Ratio [10 Year Summary]
Avg P/E Book Value/ Share
2014 8.3656 3,274,470
2013 4.9 21.33
2012 2.93 19.74
2011 4.5 18.53
2010 5 16.11
2009 1.57
2008 4.48
2007 4.61
2006 4.21
2005 5.23

Value Indicators

Value Indicators Worksheet
1 ROIC - ROIC > 12% since most businesses lends between 8% and 12%
Year 2014 2013 2012 2011 2010
Net Income 65,107.0 50,522.0 49,918.0 57,198.0 87,018.0
Interest 36,020.00 27,363.00 17,896.00 53,073.00 25,389.00
Long-Term Debt 472,729.00 539,114.00 286,381.00 225,181.00 232,688.00
Total Equity 329,326.0 327,447.0 681,877.0 727,458.0 748,911.0
Invested Capital 802,055.0 866,561.0 968,258.0 952,639.0 981,599.0
ROIC 0.13 0.09 0.07 0.12 0.11
2 Equity Growth Rates:
Year 2014 2013 2012 2011 2010
BVPS 3274470 21.33 19.74 18.53 16.11
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
20.23 54.89 406.28 153513.77
3 EPS Growth Rates:
Year 2014 2013 2012 2011 2010
EPS 0.00 0.00 0.00 0.00 0.00
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
0.00 0.00 0.00 0.00
4 Sales Growth Rates
Year 2014 2013 2012 2011 2010
Sales (Revenue) 2,010,969.00 1,969,666.00 1,868,739.00 1,695,144.00 1,592,568.00
Sales Growth Rates:
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
0.060 0.059 0.037 0.021
5 Operating Cash Flow (OCF) and Free Cash Flow (FCF) growth rates
Year 2014 2013 2012 2011 2010
OCF 0.00 0.00 0.00 0.00 0.00
CAPEX 0.00 0.00 0.00 0.00 0.00
FCF 0.00 0.00 0.00 0.00 0.00
OCF Growth Rates:
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
0.000 0.000 0.000 0.000
FCF Growth Rates:
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
0.000 0.000 0.000 0.000
6 Gross Margin (>40% is sign of durable competitive advantage; <20% is indicator of highly competitive industry).
Year 2014 2013 2012 2011 2010
Sales 2010969 1969666 1868739 1695144 1592568
Gross Profit 0.00 0.00 0.00 0.00 0.00
Gross Margin 0.00 0.00 0.00 0.00 0.00
7 Operating Margin (>= industry or sector average). (Industry: … ...%; Average of competitors: … …%)
Year 2014 2013 2012 2011 2010
Sales 2010969 1969666 1868739 1695144 1592568
Operating Profit 144,406.00 136,893.00 94,165.00 149,565.00 174,702.00
Operating Margin 0.07 0.07 0.05 0.09 0.11
8 Net Margin (> 20% => competitive advantage; <10% sign of competition)
Year 2014 2013 2012 2011 2010
Sales 2010969 1969666 1868739 1695144 1592568
Net Income 65107.00 50522.00 49918.00 57198.00 87018.00
Net Margin 0.03 0.03 0.03 0.03 0.05
9 Free Cash Flow Margin (>= 10% indicator of competitive advantage; must not be < 3%).
Year 2014 2013 2012 2011 2010
Sales 2010969.00 1969666.00 1868739.00 1695144.00 1592568.00
Free Cash Flow 0.00 0.00 0.00 0.00 0.00
FCF Margin 0.00 0.00 0.00 0.00 0.00
10 Short-Term Financial Health
10.1 Current Ratio ≥ 2
Year 2014 2013 2012 2011 2010
Current Assets 633,417.00 609,809.00 661,906.00 640,959.00 700,924.00
Current Liabilities 418,943.00 415,362.00 368,596.00 305,081.00 342,545.00
Current Ratio 1.51 1.47 1.80 2.10 2.05
10.2 Quick Ratio ≥ 1.5
Year 2014 2013 2012 2011 2010
Current Assets 633,417.0 609,809.0 661,906.0 640,959.0 700,924.0
Inventory 248,577.0 254,761.0 242,447.0 208,945.0 179,730.0
Current Liabilities 418,943.0 415,362.0 368,596.0 305,081.0 342,545.0
Quick Ratio 0.92 0.85 1.14 1.42 1.52
10.3 Interest Coverage Ratio ≥ 5 minimum; but preferably ≥ 10 (except utilities ≥ 2)
Year 2014 2013 2012 2011 2010
EBIT 144,406.00 136,893.00 94,165.00 149,565.00 174,702.00
Interest Expense 36,020.00 27,363.00 17,896.00 53,073.00 25,389.00
Interest Coverage 4.0 5.0 5.3 2.8 6.9
10.4 Operating Cash Flow Ratio ≥ 1
Year 2014 2013 2012 2011 2010
OCF 0.00 0.00 0.00 0.00 0.00
Current Liabilities 418,943.00 415,362.00 368,596.00 305,081.00 342,545.00
OCF Ratio 0.00 0.00 0.00 0.00 0.00
11 Long-Term Financial Health
11.1 Leverage Ratio: Debt to Total Asset Ratio ≤ 0.50 except utilities for which 1.0 is acceptable
Year 2014 2013 2012 2011 2010
Long-Term Debt 472,729.0 539,114.0 286,381.0 225,181.0 232,688.0
Total Assets 1,535,695.0 1,602,443.0 1,583,463.0 1,549,464.0 1,532,402.0
Debt to Assets Ratio 0.31 0.34 0.18 0.15 0.15
11.2 Debt to Equity Ratio ≤ 1
Year 2014 2013 2012 2011 2010
Long-Term Debt 472,729.0 539,114.0 286,381.0 225,181.0 232,688.0
Total Equity 329,326.0 327,447.0 681,877.0 727,458.0 748,911.0
Debt - Equity Ratio 1.44 1.65 0.42 0.31 0.31
11.3 How long will it take the company to pay off its long-term debt using Cash Flow from Operations? 3 years or less.
Year 2014 2013 2012 2011 2010
Long-Term Debt 472,729.0 539,114.0 286,381.0 225,181.0 232,688.0
OCF 0.0 0.0 0.0 0.0 0.0
How long to payoff Debt 0.0 0.0 0.0 0.0 0.0
12 Growth in Retained Earnings
Year 2014 2013 2012 2011 2010
Retained Earnings 113729 86695 1238396 1210110 1171008
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
-0.44 -0.58 0.03 0.03
13 CAPEX Per Share
Year 2014 2013 2012 2011 2010
CAPEX 0 0 0 0 0
Common Stock Outstanding 0 0 0 0 0
CAPEX per Share 0 0 0 0 0
4-year Growth rate 3-year Growth rate 2-year Growth rate 1-year Growth rate
0.00 0.00 0.00 0.00

PE Ratio Valuation

Estimating Intrinsic Value (P-E Ratio Approach), comparing with Price and Making Purchase Decision based on Margin of Safety
Step 8
Step 8A: Gathering Data
P/E Ratios
Year Latest Year -1 Year -2 Year -3 Year -4 Year -5 Year -6 Year -7 Year -8 Year -9 Year -10
P/E Ratio 8.3656 8.3656 4.9 2.93 4.5 5 1.57 4.48 4.61 4.21 5.23
Average P/E Ratio 4.92 **(Check the formula for average)
Analysts Estimate of EPS Growth Rate: 0 (see MSN Moneycentral Analysts Estimates)
Latest (full year) EPS = 0.00
k = 0.15 (may try different numbers based on what you know about the company's moat, financial health and historical ROA).
Current Price = 0
Step 8B: Using the Data
EPS at end of last year, EPS0 = 0.00
1. Average EPS growth rate = 0.00 (use the EPS growth rate over the longest period (3-, 4- or 5- year period) you can find)
2. Average Equity growth rate = 20.23 (use the BVPS growth rate over the longest period (3-, 4- or 5- year period) you can find)
3. Analysts estimate of EPS growth rate = 0 (see above)
Equity Growth Rate to use for Calculations = 0.00 (This the lowest of the three numbers above)
Average P/E over 5 years or 10 years = 4.92
k, the required rate of return = 0.15
Step 9: Estimating what the business is worth
1. Estimate EPS ten years from now, EPS10 = EPS0 (1+g)10 0.00
2. Multiply EPS10 by P/E and call that V10; that is V10 = (EPS10.)x(P/E). 0.00 This gives you the intrinsic value ("Sticker Price") ten years from now.
3. Calculate today’s supposed intrinsic value, V0 = V10 x [1/(1+k)10)] 0.00
Purchase Decision
Step 10: Current Price = 0.00
Current Price/Intrinsic Value = 0.00
Margin of Safety 0.00
Decision: Buy if margin of Safety is greater 50%.
Consider buying or put on Watch List if Margin of Safety is between 20% and 50%.
Put on Watch List if Margin of Safety is less than 20%.

FCF Valuation

Estimating Intrinsic Value Using Free Cash Flow Approach
1 Data
OCF = 0.0 Capital Expenditure = 0.0
a. Latest FCF 0.0
b. Rate of Growth of FCF over the next 10 years (use lower of 10% or company's 5-year growth rate) 0.10
c. Terminal Growth Rate (Rate of growth of FCF from year 11 in perpetuity - use average GDP growth rate) 0.03
d. Discount rate 0.15
e. Number of shares outstanding (undiluted) 0.00
Number of shares outstanding from last year 0 (for use in calculating F-Score)
Number of shares outstanding two years ago 0
2 Estimates
a. Estimates of FCF from year 1 to year 10
b. Estimate of intrinsic value in year 10
c. Estimate of intrinsic value today
Year: 0 1 2 3 4 5 6 7 8 9 10 11
FCF0 FCF1 FCF2 FCF3 FCF4 FCF5 FCF6 FCF7 FCF8 FCF9 FCF10 FCF11
FCF 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
PV of FCF 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Intrinsic Value in Year 10 0.0
Intrinsic Value $0
Intrinsic Value per share $0.00
3 Current market price $ - 0
4 Ratio of current price to intrinsic value 0.00
Margin of Safety = 0.00
5 Purchase or sale decision
Buy if Margin of Safety is 50% or more.
Consider buying or putting on Watch List if Margin of Safety is between 20% and 50%.
Put on Watch List if Margin of Safety is less than 20%.

Piotroski F Score

Piotroski Screening (F-Score) Criteria
Criterion Score
1 The return on assets for the last fiscal year (Y1) is positive 1
2 Cash from operations for the last fiscal year (Y1) is positive 0
3 The return on assets ratio for the last fiscal year (Y1) is greater than the return on assets ratio for the fiscal year two years ago (Y2) 1
4 Cash from operations for the last fiscal year (Y1) is greater than income after taxes for the last fiscal year (Y1) 0
5 The long-term debt to assets ratio for the last fiscal year (Y1) is less than the long-term debt to assets ratio for the fiscal year two years ago (Y2) 1
6 The current ratio for the last fiscal year (Y1) is greater than the current ratio for the fiscal year two years ago (Y2) 1
7 The average shares outstanding for the last fiscal year (Y1) is less than or equal to the average number of shares outstanding for the fiscal year two years ago (Y2) 1
8 The gross margin for the last fiscal year (Y1) is greater than the gross margin for the fiscal year two years ago (Y2) 0
9 The asset turnover for the last fiscal year (Y1) is greater than the asset turnover for the fiscal year two years ago (Y2) 1
TOTAL 6
F-Score of 8 or 9 => strong company; low probability of bankruptcy.
F-Score between 0 and 2 => weak company; high probability of failing.

Altman Z Score

Altman Z Score:
Current Assets 633,417
Current Liabilities 418,943
Total Aseets 1,535,695
Operating Income 144,406
Market Cap 556,293,060
Total Liabilities 0
Retained Earnings 113,729
Sales 2,010,969
Ratios Score
X1 = Working Capital / Total Assets 0.1396592422 0.1675910907
X2 =Retained Earnings/Total Asets 0.074057023 0.1036798323
X3 = Operating Income/Total Assets 0.0940329948 0.3103088829
X4 = Market Capitalization / Liabilities 0 0
X5 = Sales / Total Assets 1.3094846307 1.3094846307
Total 0
Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
Z < 1.8 => High probability of bankruptcy
1.8 < Z < 2.7 => caution; moderate probability of bankruptcy
2.7 < Z < 2.99=> proceed with caution
Z > 3 => safe; bankruptcy unlikely.