Ration Analysis of M&S

Marks & Spenser Inc.
First Investment Inc. RATIOS
1994
Short term solvency ratios
Current Ratio 1.35
Quick Ratio 0.76
Cash Ratio 0.10
Net Working Capital to Current Liabilities 0.35
Asset Utilization or Turnover ratios

Average Collection Period 69.62
Inventory Turnover Ratios 5.94
Receivable Turnover 5.17
Fixed Asset Turnover 5.13
Total Asset Turnover 1.43
Financial Leverage ratios

Total Debt Ratio (TD/TA) 0.60
Debt/Equity 1.48
Equity Ratio (TE/TA) 0.40
Long-term Debt Ratio (LTD/TA) 0.13
Times Interest Earned Ratio (EBIT/TI) 5.63
Profitability ratios
Operating Profit Margin 0.07
Net Profit Margin 0.04
ROA (NI/TA) 0.05
ROE (NI/TE) 0.13
ROEWGW (NI/TEWGW): This accounts for Goodwill 0.12
Market value ratios
Price/Earnings Ratio 2.11
Retain Earning 3,000.50
Earning Per Share 3.34
Intel Corporation Ratios Financial

Cynthia Statements
Kenyon and Michael Davis_x000D_FIN 135, September 23, 2011
FINANCIAL STATEMENTS
Balance Sheet
Three Years Ended December, 1994, 1993, and 1985
(In Millions, Except Par Value) 1994
Assets
Current Assets:
Cash and cash equivalents 315 6%
Short-term marketable securities 57 1%
Accounts receivable, less allowances 2,594 50%
Inventories 2,257 43%
Total current assets 5,223 56%
Long term marketable securities 1,005 11%
Property, plant and equipment, net 2,616 28%
Other long-term assets 526 6%
Total assets 9,369
Liabilities and stockholders' equity

Current Liabilities 1,994
Accounts payable 1,697
Accrued expenses 1,465
Dividend Payable 73
Short-term Borrowing 645
Total current liabilities 3,880
Long-term Borrowing 1,195
Other non-current liabilities 519
Total Liabilities 5,594
Stockholders' equity:
Common Stock 465
Others Stock related Adjustments 310
Retained earnings 3,001
Total stockholders' equity 3,776
Total liabilities and stockholders' equity 9,369

Cynthia Statements
Income Statement
Three Years Ended December, 1994, 1993, and 1985
(In Millions, Except Per Share Data) 1994
Net revenue 13,413
Employee compensation, including benefit 5,332
Material, Supplies, Services, and other Cost 6,967
Taxes, except those on income (148)
Depreciation 376
Operating expenses 12,527
Other Income 186
Income before Interest & Tax (EBIT) 1,072
Finance charges 190
Income before taxes 881
Provision for taxes 382
Net income 499

Cynthia Statements
nvestment Inc. RATIOS
1993 1985
1.28 1.81
0.72 1.09
0.12 0.41
0.28 0.81
64.60 61.56
5.83 5.47
5.57 5.85
4.90 5.99
1.39 1.44 3,500.00
3,000.00
0.59 0.50
1.43 1.00 2,500.00
0.41 0.50
0.11 0.08 2,000.00
8.45 69.67
$, millions
1,500.00
0.08 0.10
1,000.00
0.05 0.06
0.07 0.08
500.00
0.17 0.17
0.15 0.15
0.00
Price/Earnings Ratio Reta
1.41 1.35
2,683.60 1,384.50
3.21 1.87

Cynthia Statements
ANCIAL STATEMENTS
Balance Sheet
1993 1985
397 9% 290
25 1% 353
2,077 46% 1,063
1,986 44% 1,137
4,485 54% 2,843
870 10% 241
2,361 28% 1,037
609 7% 180
8,324 4,301
1,993 1,985
1,392 677
1,363 711
73 59
665 121
3,492 1,567
917 364
492 221
4,902 2,152
464 456
275 308
2,684 1,385
3,423 2,149
8,324 4,301

Cynthia Statements
Income Statement
1993 1985
11,575 6,214
4,710 2,441
5,691 3,063
(114) (125)
334 188
10,621 5,568
184 72
1,139 718
135 10
1,004 707
419 352
585 355

Cynthia Statements
First Investment Inc.
RATIO COMPARISON
1994 1993 1985

Solvency
Current Ratio Current Assets/Current Liabilities 1.35 1.28 1.81
Quick Ratio (Acid Test) Current Assets - Inventory/Current Liabilities 0.76 0.72 1.09
Cash Ratio Cash/Current Liabilities 0.10 0.12 0.41
Net. Capital to Current Liabilities Networking Capital/Current Liabilities 0.35 0.28 0.81
Cash as a % of Current Assets 0.06 0.09 0.10
Efficiency
Average Collection Period Accounts Receivable/(Sales / 360) 69.62 64.60 61.56
Inventory Turnover Total Revenues/Inventory 5.94 5.83 5.47
Receivable Turnover Total Revenues/Accounts Receivable 5.17 5.57 5.85
Fixed Asset Turnover Total Revenues/Fixed Assets 5.13 4.90 5.99
Total Asset Turnover Total Revenues/Total Assets 1.43 1.39 1.44
Financial Leverage Ratios

Total Debt Ratio Total Debt/Total Assets 0.60 0.59 0.50
Debt-Equity Ratio Total Debt/Total Equity 1.48 1.43 1.00
Equity Ratio Total Equity/Total Assets 0.40 0.41 0.50
Long-term Debt Ratio (LTD/TA) Long-term Debt / Total Assets 0.13 0.11 0.08
Times Interest Earned EBIT/Total Interest Payments 5.63 8.45 69.67
Profitability
Operating Profit Margin (OPM) Gross Profits/Net Operating Income 7% 8% 10%
Net Profit Margin (NPM) Net Profits/Net Operating Income 4% 5% 6%
Return on Total Assets (ROA) Net Income/Total Assets 5% 7% 8%
Return on Equity (ROE) RETURN ON EQUITY 13% 17% 17%
Intel Corporation Ratio Comparison Cynthia Kenyon and Michael Davis_x000D_FIN 135, October 5, 2011
Marks & Spencer
FORECAST - PESSIMIST
INTRINSIC VALUATION MODEL - TWO-STAGE EARNINGS
2016 2017
### 2018
### 2019
###
Prior year cash flows (mil) #REF! #REF! #REF! #REF!

10-year growth rate (.00) 20.00% 20.00% 20.00% 20.00%
Cash flow #REF! #REF! #REF! #REF!
Discount Rate (.00) 0.15 0.15 0.15 0.15
Discount Factor (mult.) 0.869565 0.756144 0.657516 0.571753
Discounted value per annum #REF! #REF! #REF! #REF!
Sum of present value of cash flows #REF!
Residual value
Cash flow in year 10 #REF!
Growth rate (.00) (g) 0.04
Capitalization rate (k-g) 0.11
Value at end of year 10 #REF!
1
Discount factor year 10 0.24718
Present value of residual #REF!

Market value (mil) #REF!
Number of shares (mil) #REF!
Intrinsic value per share #REF!
Intrinsic / Market #REF!
Input discount & growth rates

First 10 year growth rate 20.00%
0
2nd period growth rate 0.04
Discount rate 0.15
Owners cash flow (mil) #REF!
- PESSIMISTIC
O-STAGE EARNINGS GROWTH PROJECTIONS
2020
### 2021
### 2022
### 2023
### 2024
### 2025
#REF! #REF! #REF! #REF! #REF! #REF!

20.00% 20.00% 20.00% 20.00% 20.00% 20.00%
0.15 0.15 0.15 0.15 0.15 0.15
0.497177 0.432328 0.375937 0.326902 0.284262 0.247185
Marks & Spencer
FORECAST
INTRINSIC VALUATION MODEL - TWO
2016 2017
### 2018
###
Prior year cash flows (mil) #REF! #REF! #REF!

10-year growth rate (.00) 25.00% 25.00% 25.00%
Cash flow #REF! #REF! #REF!
Discount Rate (.00) 0.15 0.15 0.15
Discount Factor (mult.) 0.869565 0.756144 0.657516
Discounted value per annum #REF! #REF! #REF!
Residual value
1

Total Intrinsic Value (mil) #REF!

First 10 year growth rate 25.00%
Growth Rate Year 11 in perpetuity 0.04
Discount rate 0.15
Owners cash flow (mil) #REF! 0
CAST - MOST LIKELY
EL - TWO-STAGE EARNINGS GROWTH PROJECTIONS
2019
### 2020
### 2021
### 2022
### 2023
### 2024
###

25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
0.15 0.15 0.15 0.15 0.15 0.15
0.571753 0.497177 0.432328 0.375937 0.326902 0.284262
NS
2025
#REF!
25.00%
#REF!
0.15
0.247185
#REF!
Marks & Spencer
FORECAST - OPTIMIST
INTRINSIC VALUATION MODEL - TWO-STAGE EARNINGS
2014 2015 2016

### 2017
###
Prior year cash flows (mil) #REF! #REF! #REF! #REF!

10-year growth rate (.00) #REF! #REF! #REF! #REF!
Cash flow #REF! #REF! #REF! #REF!
Discount Rate (.00) 0.15 0.15 0.15 0.15
Discount Factor (mult.) 0.869565 0.756144 0.657516 0.571753
Discounted value per annum #REF! #REF! #REF! #REF!
Residual value
Cash flow in year 10 #REF! 1

Market value (mil) #REF!

First 10 year growth rate #REF!
2nd period growth rate 0.04
Discount rate 0.15
0
Owners cash flow (mil) #REF!
T - OPTIMISTIC
O-STAGE EARNINGS GROWTH PROJECTIONS
2018
### 2019
### 2020
### 2021
### 2022
### 2023

0.15 0.15 0.15 0.15 0.15 0.15
0.497177 0.432328 0.375937 0.326902 0.284262 0.247185
Marks & Spencer
DuPont Analysis 1985
Sales
$13,413 Net Income
Cost of Goods Sold $689
$0
Income Operating Expenses
Statement $12,527 Sales
Other Inc./Exp. $13,413
$186
Taxes
$382 Sales
$13,413
Current Assets
$5,223 Total Assets
Balance Net Fixed Assets $9,369
Sheet $4,147
Current Liabilities
$3,880 Total Liabilities
Long-term Debt $5,594
$1,714
Stockholders Equity
$3,776
ont Analysis 1985
Net Profit Margin

M&S
5.14%
Return on Assets (ROA)
M&S
7.36%
T.A. Turnover
M&S
143.16%
Return on Equity
(ROE)
M&S
18.26%
Total Liab. & Equity
M&S
$9,369
Financial Leverage Mult.

(FLM)
M&S
2.48
Stockholders Equity
M&S
$3,776
Marks & Spencer
Sales
$11,575 Net Income
$0
$184
Taxes
$419 Sales
$11,575
Current Assets
$4,485 Total Assets
Sheet $3,839
Current Liabilities
$1,409
Stockholders Equity
$3,423
ont Analysis 1993
Net Profit Margin

M&S
6.22%
Return on Assets
(ROA)
M&S
8.65%
T.A. Turnover
M&S
139.06%
Return on Equity
(ROE)
M&S
21.03%
M&S
$8,324
Financial Leverage
Mult. (FLM)
M&S
2.43
Stockholders Equity
M&S
$3,423
Marks & Spencer
Sales
$6,214 Net Income
$0
$72
Taxes
$352 Sales
$6,214
Current Assets
$2,843 Total Assets
Sheet $1,458
Current Liabilities
$585
Stockholders Equity
$2,149
nt Analysis 1994
Net Profit Margin

M&S
5.88%
Return on Assets
(ROA)
M&S
8.50%
T.A. Turnover
M&S
144%
Return on Equity
(ROE)
M&S
17.01%
M&S
$4,301
Financial Leverage
Mult. (FLM)
M&S
2.00
Stockholders Equity
M&S
$2,149
Marks & Spencer
The Buffett Model

INSTRUCTIONAL INFO
EPS ACGR (from Value Line) #REF!
Average ROE (8 Years) ! This is the average ROE from the
Initial EPS Rate of Return @ Curent Price #REF! ! Equal to 2010 EPS divided by curre
VALUE RELATIVE TO GOVERNMENT BONDS #REF! ! Most recent EPS divided by yield o
Projected ACRR as Equity Bond
Average Dividend Payout Ratio #REF! ! From Value Line, last Dividend %
Average % of Earnings Retained #REF! ! 1 minus average dividend payout
Average ROE in R/E over the last 10 Years #VALUE! ! Average ROE times 59%
Future Book (Equity) Value in 10 Years #VALUE! ! Book Value times 1.1324% to the
Projected EPS in 10 Years #VALUE! ! Future book value times 10%
Average P/E Ratio #REF! ! Average P/E from Value Line
VALUE RELATIVE TO GROWING GOV'T BONDS #VALUE! ! Projected EPS times average P/E r
ACRR @ Current Price #REF!
Projected ACRR Using Average EPS

Last Year EPS #REF! ! From Value Line
Projected EPS in 10 Years #REF! ! 10 year ACGR times last years EPS
Projected Share Price in 10 Years #REF! ! Projected EPS in 10 Years times av
ACGR @ Current Price #REF!
November 2011 ACGR - Average Compounded Growth Rate in E

Yield on T-Bonds: 1.50% ACRR - Average Compounded Rate of Return
Share Price: #REF!
Shares Outstanding:
Book (Equity) Value per Share:

Cynthia Statements
Cynthia Statements
Cynthia Statements
Marks & Spencer
he Buffett Model
INSTRUCTIONAL INFORMATION
This is the average ROE from the Value Line
Equal to 2010 EPS divided by current share price

Most recent EPS divided by yield on treasury bonds
From Value Line, last Dividend %

1 minus average dividend payout ratio
Average ROE times 59%
Book Value times 1.1324% to the 10th
Future book value times 10%
Average P/E from Value Line
Projected EPS times average P/E ratio
10 year ACGR times last years EPS

Projected EPS in 10 Years times average P/E ratio
ACGR - Average Compounded Growth Rate in EPS from Value Line

ACRR - Average Compounded Rate of Return

Cynthia Statements
Cynthia Statements
Cynthia Statements
Marks & Spencer
Graham Analysis
Variables Values
Current Price #REF!

AAA Yield 3.50%
Average P/E over last 3 years #REF!
Average P/E over last 8 years
Net Current Assets per Share #REF!
Total Debt per Share #REF!
Group A Values
#1 Earnings / Price #REF!
#2 Price / Earnings #REF!
#3 Price / Book #REF!
#4 Dividends / Price
#5 Price / Net Current Assets Per Share #REF!
Group B Values
#6 Current Ratio 1.81
#7 Total Debt / Equity 1.00
#8 Total Debt / Net Current Assets #REF!
#9 Growth for last 10 years 4.50%
Growth for last 5 years #REF!
#10 Number of earnings decline 0
This Graham Analysis is based on Results

my presentation in class related to Group Total Points
the Graham model. Virtually no Group A #REF!
stock is likely to pass this con- Group B #REF!
servative criteria but it is still worth Does Company Pass the Graham Model?
looking at. #REF!

Cynthia Statements
Cynthia Statements
Cynthia Statements
Cynthia Statements
Graham Analysis
Points
#REF!
#REF!
#REF!
1.0
#REF!
Points
0.5
0.5
#REF!
#REF!
1.0

Cynthia Statements
Cynthia Statements
Cynthia Statements
Cynthia Statements
Marks & Spencer
Projected ROE Based on P/E Ratios
The Kuhle ROE Model

Projections for 10 Year Period
Reinvested Dividends
Year Equity Value Per Share Earnings Dividends Paidout High P/E
1 #VALUE! #VALUE! #VALUE! #VALUE!
#VALUE! ### #VALUE! ###
Price Appreciation (Low P/E) #VALUE! Price Appreciation (High P/E)

Rate of Return on Appreciation #VALUE! Rate of Return on Appreciation
Annualized #VALUE! Annualized
With Reinvested Dividends #VALUE! With Reinvested Dividends
Annualized #VALUE! Annualized
This model is intended to present a projection o

Input Variables return on equity over a projected 10 year perio
assuming re-invested dividends. If dividends ar
must receive the ROE rate on all dividends that
Current Price #REF! ROE's are based on the low and high P/E ratios
Average ROE from Value Line
Initial Book Value
Payout Ratio
P/E High
P/E Low
OE Based on P/E Ratios
Kuhle ROE Model

ns for 10 Year Period
Reinvested Dividends
Low P/E Retained Earnings
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
#VALUE! #VALUE!
Price Appreciation (High P/E) #VALUE!

Rate of Return on Appreciation #VALUE!
#VALUE!
With Reinvested Dividends #VALUE!
#VALUE!
This model is intended to present a projection of the annual compounded
eturn on equity over a projected 10 year period. This projection is made

assuming re-invested dividends. If dividends are re-invested the investor
must receive the ROE rate on all dividends that are re-invested. The
ROE's are based on the low and high P/E ratios from the Value Line.
Microsoft (MSFT)
RATIOS
2012
Short term solvency ratios
Current Ratio 2.60
Quick Ratio 2.57
Cash Ratio 1.93
Net Working Capital to Current Liabilities 1.60
Asset Utilization or Turnover ratios

Average Collection Period 77.06
Inventory Turnover Ratios 64.84
Receivable Turnover 4.67
Fixed Asset Turnover 7.54
Total Asset Turnover 0.61
Financial Leverage ratios

Total Debt Ratio (TD/TA) 0.45
Debt/Equity 0.12
Equity Ratio (TE/TA) 0.55
Long-term Debt Ratio (LTD/TA) 0.09
Times Interest Earned Ratio (EBIT/TI) 22,267.00
Profitability ratios
Gross Profit Margin 0.76
Net Profit Margin 0.314
ROA (NI/TA) 0.1400
ROE (NI/TE) 0.2558
Market value ratios

Price/Earnings Ratio 10.4000

Cynthia Statements
FINANCIAL STATEMENTS
Balance Sheet
Three Years Ended December 25, 2010
(In Millions, Except Par Value) 2012
Assets
Current Assets:
Cash and cash equivalents 6,938
Short-term investments 56,102
Accounts Receivable, Net 15,780
Inventories 1,137
Deferred Income Taxes 2,035
Other 3,092
Total current assets 85,084

Long Term Assets:
Property, plant and equipment, net 8,269
Equity and other investments 9,776
Goodwill 13,452
Intangible Assets 3,170
Other long term assets 1,520
Total assets 121,271
Liabilities and stockholders' equity

Current Liabilities
Accounts Payable 4,175
Short term debt 0
Current Portion long term debt 1,231
Accrued compensation 3,875
Income Taxes 789
Short term unearned revenue 18,653
Securities lending payable 814
Other 3,151
Total current liabilities 32,688
Long-term debt 10,713

Long term unearned revenue 1,406
Deferred Income Taxes 1,893
Other long-term liabilities 8,208
Total Liabilities 54,908
Stockholders' equity:
outstanding8,239and8,328 65,797
Retained Earnings (856)
Accumulated other comprehensive income 1,422

Cynthia Statements
Total stockholders' equity 66,363
Total liabilities and stockholders' equity 121,271

Cynthia Statements
Income Statement
Three Years Ended December 25, 2010
(In Millions, Except Per Share Data) 2012
Net revenue 73,723
Cost of revenue 17,530
Gross margin 56,193
Research and development 9,811
Sales and marketing 13,857
General and administrative 4,569
Goodwill impairment 6,193
Integration and restructuring 0
Total 34,430
Operating income 21,763
Other Income 504
Income before taxes 22,267
Provision for taxes 5,289
Net Income 16,978
Net income 16,978
Basic earnings per common share 2.02

Dilluted earnings per common share 2.00
Weighted average common shares outstanding:
Basic 8,396
Dilluted 8,506

Cynthia Statements
IOS
2013 2014
2.71 2.50
2.66 2.45
2.06 1.88
1.71 1.50
80.86 81.03
40.17 32.64
4.45 4.44
7.18 5.95
0.55 0.50
0.45 0.48
0.13 0.13
0.55 0.52
0.09 0.12
27,052.00 27,820.00
0.74 0.69
0.289 0.254
0.1535 0.1281
0.2769 0.2459
11.20 14.00

Cynthia Statements
TATEMENTS
Sheet
2013 2014
3,804 8,669
73,218 77,040
17,486 19,544
1,938 2,660
1,632 1,941
3,388 4,392
101,466 114,246
9,991 13,011
10,844 14,597
14,655 20,127
3,083 6,981
2,392 3,422
142,431 172,384
4,828 7,432
0 2,000
2,999 0
4,117 4,797
592 782
20,639 23,150
645 558
3,597 6,906
37,417 45,625
12,601 20,645
1,760 2,008
1,709 2,728
10,000 11,594
63,487 82,600
67,306 68,366
9,895 17,710
1,743 3,708

Cynthia Statements
78,944 89,784
142,431 172,384

Cynthia Statements
atement
2013 2014
77,849 86,833
20,249 26,934
57,600 59,899
10,411 11,381
15,276 15,811
5,149 4,821
0 0
0 127
30,836 32,140
26,764 27,759
288 61
27,052 27,820
5,189 5,746
21,863 22,074
21,863 22,074
2.61 2.66
2.58 2.63
8,375 8,299
8,470 8,399

Cynthia Statements

Ration Analysis of M&S

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Marks & Spenser Inc.

First Investment Inc. RATIOS

Asset Utilization or Turnover ratios

Financial Leverage ratios

Intel Corporation Ratios Financial

Liabilities and stockholders' equity

Intel Corporation Ratios Financial

Intel Corporation Ratios Financial

Intel Corporation Ratios Financial

Intel Corporation Ratios Financial

Intel Corporation Ratios Financial

1994 1993 1985

Financial Leverage Ratios

Prior year cash flows (mil) #REF! #REF! #REF! #REF!

Present value of residual #REF!

Input discount & growth rates

#REF! #REF! #REF! #REF! #REF! #REF!

Prior year cash flows (mil) #REF! #REF! #REF!

Present value of residual #REF!

Input discount & growth rates

#REF! #REF! #REF! #REF! #REF! #REF!

2014 2015 2016

Prior year cash flows (mil) #REF! #REF! #REF! #REF!

Present value of residual #REF!

Input discount & growth rates

#REF! #REF! #REF! #REF! #REF! #REF!

DuPont Analysis 1985

Net Profit Margin

Return on Assets (ROA)

Financial Leverage Mult.

DuPont Analysis 1993

Net Profit Margin

DuPont Analysis 1994

Net Profit Margin

The Buffett Model

Projected ACRR Using Average EPS

November 2011 ACGR - Average Compounded Growth Rate in E

Book (Equity) Value per Share:

Intel Corporation Ratios Financial

This is the average ROE from the Value Line

Equal to 2010 EPS divided by current share price

From Value Line, last Dividend %

10 year ACGR times last years EPS

ACGR - Average Compounded Growth Rate in EPS from Value Line

Intel Corporation Ratios Financial

Current Price #REF!

This Graham Analysis is based on Results

Intel Corporation Ratios Financial

Intel Corporation Ratios Financial

Projected ROE Based on P/E Ratios

The Kuhle ROE Model

Price Appreciation (Low P/E) #VALUE! Price Appreciation (High P/E)

This model is intended to present a projection o

Kuhle ROE Model

Price Appreciation (High P/E) #VALUE!

This model is intended to present a projection of the annual compounded

eturn on equity over a projected 10 year period. This projection is made

Asset Utilization or Turnover ratios

Financial Leverage ratios

Market value ratios

Intel Corporation Ratios Financial

Total current assets 85,084

Liabilities and stockholders' equity