Financial Condition Analysis: Sony Corp (6758)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
SONY CORP Japan/
TSE
Technology – Computer Hardware – Consumer Electronics JPY5865.00
@ 31 Jul 2018
COMPANY PROFILE Sony Corp is engaged in the development, design, manufacture, and sale of various kinds of electronic equipment, instruments and devices for consumer, professional and industrial markets as well as game consoles and software.

Sony is a conglomerate with consumer electronics roots and various well-known brand names, such as Walkman in portable audio players, Vaio in PCs, Xperia in smartphones, Cybershot in digital cameras, and PlayStation in video game consoles. It currently has nine main business units, operating electronic appliances, games, devices and semiconductors, entertainment content, and financial services.

Stock Code 6758
Financial Condition Analysis Below
It is important to analyze the financial condition of the company you want to invest in because if a company goes bankrupt, the chances are high that you will lose all your investment. Even if the company does not go bankrupt, the deterioration in financial condition will cause more and more investors to avoid the company and valuation will drop. Weak financial condition also limits the opportunities that a company has to grow its business.
In order to determine the financial condition of the company, we usually use the Z score, which was introduced by Edward Altman,  a Professor of Finance at New York University. This score is a composite measure of a firm’s financial condition and has been proven to be able to predict with high accuracy whether a firm will go into bankruptcy within the next two years.

Sony Corp Altman Z-Score

Z-score has been deteriorating since 2000. The main reasons for this are:
* lower working capital
* lower retained earnings as a proportion of total assets
* lower EBIT as a proportion of total assets
* higher level of borrowings
* lower revenue as a proportion of total assetsThe latest Z-Score of the company as at Mar 2017 was 0.7, which is in the distressed zone.
The various components that go into the Z-Score are shown below:

Sony Corp Sales Turnover

This is the Revenue Turnover ratio and it reflects the amount of revenue the company is able to generate from the use of its assets.  Companies that have difficulty generating revenue cannot generate consistent cash flow to pay its bills.
The amount of revenue generated from assets has been on a downtrend since 1999.

Sony Corp Retained Earnings

The more profits are retained within the firm, the greater the buffer of reserves for the company to weather difficult times.
The level of retained earnings relative to assets has been on a downtrend since 2008. Currently, retained earnings are at 5.6% of total assets.

Sony Corp ROA

This measures the ability of the company to generate EBIT (earnings before interest and taxes) from its assets.
EBIT as a % of assets has been erratic. Currently, EBIT is at 1.5% of total assets.

Sony Corp Total Borrowings

This is an indication of the level of borrowings of the firm. A high level of borrowings will affect survivability as it may not have enough cash flows to meet its debt obligations.
The level of borrowings has been on an uptrend since 1999.

Sony Corp Working Capital

Working capital is essential to the operations of the company and a low level of working capital may result in liquidity problems. Working capital relative to total assets has been on a downtrend since 1998.
Financial condition analysis is an important part of stock analysis because an investor will make a loss on a stock if it goes bankrupt. The financial condition of a company is also important because investors will attribute a discount to the theoretical fair valuation of the company depending on how bad the financial condition is. ProThinker uses multiple valuation indicators to value a stock and then attribute a discount when necessary depending on the financial condition.
The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Charts are from ProThinker Stock Report. Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from gurufocus and/or 4-traders.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

Financial Condition Analysis: Steel Authority of India (500113)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
STEEL AUTHORITY OF INDIA LTD India/
BOM
Basic Materials – Steel – Steel INR74.70
@ 17 Jul 2018
COMPANY PROFILE Steel Authority Of India Ltd is a steel manufacturing company. It produces flat products such as HR coils, HR sheets, CR coils, Galvanised Plain/Corrugated Sheets and Long products comprising Rails, Structurals, Wire-rods and Merchant Products.

Steel Authority of India Ltd is an India-based steelmaker. The company primarily produces flat steel products (including plates, sheets, coils, and galvanized plain), long steel products (rails, structural, wire rods, and merchant products), electric-resistance-welded pipes, and silicon steel sheets. Flat and long products account for the majority of the company’s sales. The company runs five integrated steel plants and three alloy steel plants. It generates most of its revenue from the Indian domestic market. The company’s products are used in automotive, construction, engineering, and defense. The Indian government owns a majority stake in the company.

Stock Code 500113
Financial Condition Analysis Below
It is important to analyze the financial condition of the company you want to invest in because if a company goes bankrupt, the chances are high that you will lose all your investment. Even if the company does not go bankrupt, the deterioration in financial condition will cause more and more investors to avoid the company and valuation will drop. Weak financial condition also limits the opportunities that a company has to grow its business.
In order to determine the financial condition of the company, we usually use the Z score, which was introduced by Edward Altman,  a Professor of Finance at New York University. This score is a composite measure of a firm’s financial condition and has been proven to be able to predict with high accuracy whether a firm will go into bankruptcy within the next two years.

Steel Authority of India Altman Z-Score

Z-score has been deteriorating since 2010. The main reasons for this are:
* lower working capital
* lower retained earnings as a proportion of total assets
* lower EBIT as a proportion of total assets
* higher level of borrowings
* lower revenue as a proportion of total assetsThe latest Z-Score of the company as at Mar 2018 was 0.6, which is in the distressed zone.
The various components that go into the Z-Score are shown below:

Steel Authority of India Sales Turnover

This is the Revenue Turnover ratio and it reflects the amount of revenue the company is able to generate from the use of its assets.  Companies that have difficulty generating revenue cannot generate consistent cash flow to pay its bills.
The amount of revenue generated from assets has been on a downtrend since 2005.

Steel Authority of India Retained Earnings

The more profits are retained within the firm, the greater the buffer of reserves for the company to weather difficult times.
The level of retained earnings relative to assets has been erratic. Currently, retained earnings are at 23.3% of total assets.

Steel Authority of India ROA

This measures the ability of the company to generate EBIT (earnings before interest and taxes) from its assets.
EBIT as a % of assets has been on a downtrend since 2005. Currently, EBIT is at 2.0% of total assets.

Steel Authority of India Total Liabilities

This is an indication of the level of borrowings of the firm. A high level of borrowings will affect survivability as it may not have enough cash flows to meet its debt obligations.
The level of borrowings has been on an uptrend since 2008.

Steel Authority of India Working Capital

Working capital is essential to the operations of the company and a low level of working capital may result in liquidity problems. Working capital relative to total assets has been on a downtrend since 2009.
Financial condition analysis is an important part of stock analysis because an investor will make a loss on a stock if it goes bankrupt. The financial condition of a company is also important because investors will attribute a discount to the theoretical fair valuation of the company depending on how bad the financial condition is. ProThinker uses multiple valuation indicators to value a stock and then attribute a discount when necessary depending on the financial condition.
The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Charts are from ProThinker Stock Report. Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from gurufocus and/or 4-traders.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

 

 

Financial Condition Analysis: Vedanta Ltd (500295)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
VEDANTA LTD India/
BOM
Basic Materials – Metals & Mining – Industrial Metals & Minerals INR210.60
@ 16 Jul 2018
COMPANY PROFILE Vedanta Ltd along with its subsidiaries is a diversified natural resource company engaged iron ore mining, non-ferrous metals (copper and aluminium production) and commercial power generation.

Vedanta Ltd, formerly known as Sesa Sterlite, is focused on zinc, lead, silver, aluminium, copper, iron ore, oil and gas, and commercial power. The company has operations across India, South Africa, Namibia, Ireland and Australia. The copper division has smelting and mining operations across India and Australia, and as the largest custom copper smelter and copper rods producer in India, it contributes more than half of the group’s revenue. Vedanta is also the largest aluminum producer in India, with operations in Korba, Jharsuguda, and Lanjigarh, generating roughly a fourth of group revenue. The company has iron ore mines in Goa, and is engaged in exploration, mining, and processing of iron ore, pig iron, and metallurgical coke and power generation.

Stock Code 500295
Financial Condition Analysis Below
It is important to analyze the financial condition of the company you want to invest in because if a company goes bankrupt, the chances are high that you will lose all your investment. Even if the company does not go bankrupt, the deterioration in financial condition will cause more and more investors to avoid the company and valuation will drop. Weak financial condition also limits the opportunities that a company has to grow its business.
In order to determine the financial condition of the company, we usually use the Z score, which was introduced by Edward Altman,  a Professor of Finance at New York University. This score is a composite measure of a firm’s financial condition and has been proven to be able to predict with high accuracy whether a firm will go into bankruptcy within the next two years.

Vedanta Altman Z-Score

Z-score has been deteriorating since 2008. The main reasons for this are:
* lower working capital
* lower retained earnings as a proportion of total assets
* lower EBIT as a proportion of total assets
* higher level of borrowings
* lower revenue as a proportion of total assetsThe latest Z-Score of the company as at Mar 2018 was 1.5, which is in the distressed zone.
The various components that go into the Z-Score are shown below:

Vedanta Sales Turnover

This is the Revenue Turnover ratio and it reflects the amount of revenue the company is able to generate from the use of its assets.  Companies that have difficulty generating revenue cannot generate consistent cash flow to pay its bills.
The amount of revenue generated from assets has been on an uptrend since 2014.

Vedanta Retained Earnings

The more profits are retained within the firm, the greater the buffer of reserves for the company to weather difficult times.
The level of retained earnings relative to assets has been on a downtrend since 2009. Currently, retained earnings are at 19.3% of total assets.

Vedanta ROA

This measures the ability of the company to generate EBIT (earnings before interest and taxes) from its assets.
EBIT as a % of assets has been on a downtrend since 2008. Currently, EBIT is at 13.7% of total assets.

Vedanta Total Liabilities

This is an indication of the level of borrowings of the firm. A high level of borrowings will affect survivability as it may not have enough cash flows to meet its debt obligations.
The level of borrowings has been on an uptrend since 2008.

Vedanta Working Capital

Working capital is essential to the operations of the company and a low level of working capital may result in liquidity problems. Working capital relative to total assets has been on a downtrend since 2015.
Financial condition analysis is an important part of stock analysis because an investor will make a loss on a stock if it goes bankrupt. The financial condition of a company is also important because investors will attribute a discount to the theoretical fair valuation of the company depending on how bad the financial condition is. ProThinker uses multiple valuation indicators to value a stock and then attribute a discount when necessary depending on the financial condition.
The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Charts are from ProThinker Stock Report. Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from gurufocus and/or 4-traders.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

 

Financial Condition Analysis: Suzlon Energy Ltd (532667)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
SUZLON ENERGY LTD India/
NSE
Industrials – Industrial Products – Diversified Industrials INR7.40
@ 15 Jul 2018
COMPANY PROFILE Suzlon Energy Ltd is a wind turbine manufacturer. It operates in North and South America, Asia, Australia, Europe, and Africa. The Company’s products include onshore turbines and offshore turbines.

Suzlon Energy Ltd is an India-based company that provides renewable energy solutions. The company’s products comprise wind turbine generators and related components, as well as solar energy solutions. In addition, the company provides services that support the operation of wind turbine generators. Wind power products and related services account for the majority of the company’s sales. The company generates almost all its revenue from India, Europe, and North America.

Stock Code 532667
Financial Condition Analysis Below
It is important to analyze the financial condition of the company you want to invest in because if a company goes bankrupt, the chances are high that you will lose all your investment. Even if the company does not go bankrupt, the deterioration in financial condition will cause more and more investors to avoid the company and valuation will drop. Weak financial condition also limits the opportunities that a company has to grow its business.
In order to determine the financial condition of the company, we usually use the Z score, which was introduced by Edward Altman,  a Professor of Finance at New York University. This score is a composite measure of a firm’s financial condition and has been proven to be able to predict with high accuracy whether a firm will go into bankruptcy within the next two years.

Suzlon Energy Altman Z-Score

Z-score has been improving since 2013. The main reasons for this are:
* higher EBIT as a proportion of total assets
* higher revenue as a proportion of total assets

However, the latest Z-Score of the company as at Mar 2018 was 0.8, which is in the distressed zone.

The latest shareholders’ equity of the company is negative, which is not a good sign. It means that the company has incurred accumulated losses in the past that has totally wiped out its shareholders’ equity.
We use the Altman Z-Score formula for non-listed companies instead. Altman Z-Score formula for listed companies uses Market Cap instead of Book Value of equity and therefore does not penalize companies for having negative shareholders’ equity.
The various components that go into the Z-Score are shown below:

Suzlon Energy Sales Turnover

This is the Revenue Turnover ratio and it reflects the amount of revenue the company is able to generate from the use of its assets.  Companies that have difficulty generating revenue cannot generate consistent cash flow to pay its bills.
The amount of revenue generated from assets has been on an uptrend since 2011.

Suzlon Energy Retained Earnings

The more profits are retained within the firm, the greater the buffer of reserves for the company to weather difficult times.
The level of retained earnings relative to assets has been on a downtrend since 2005. Currently, retained earnings are at 1.2% of total assets.

Suzlon Energy ROA

This measures the ability of the company to generate EBIT (earnings before interest and taxes) from its assets.
EBIT as a % of assets has been erratic. Currently, EBIT is at 10.7% of total assets.

Suzlon Energy Total Liabilities

This is an indication of the level of borrowings of the firm. A high level of borrowings will affect survivability as it may not have enough cash flows to meet its debt obligations.
The level of borrowings has been on an uptrend since 2008.

Suzlon Energy Working Capital

Working capital is essential to the operations of the company and a low level of working capital may result in liquidity problems. Working capital relative to total assets has been on a downtrend since 2006.
Financial condition analysis is an important part of stock analysis because an investor will make a loss on a stock if it goes bankrupt. The financial condition of a company is also important because investors will attribute a discount to the theoretical fair valuation of the company depending on how bad the financial condition is. ProThinker uses multiple valuation indicators to value a stock and then attribute a discount when necessary depending on the financial condition.
The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Charts are from ProThinker Stock Report. Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from gurufocus and/or 4-traders.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

Financial Condition Analysis: Gold Fields Ltd (GFI)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
GOLD FIELDS LTD South Africa/
JSE
Basic Materials – Metals & Mining – Gold ZAR48.63
@ 10 Jul 2018
COMPANY PROFILE Gold Fields Ltd is engaged in underground and surface gold and copper mining and related activities, including exploration, development, extraction, processing and smelting. It operates in South Africa, Australia, Ghana, and Peru.

Gold Fields Inc is a globally diversified gold miner and producer with eight operating mines in Australia, Ghana, Peru, and South Africa. The majority of group revenue is generated in the Australian mines, largely the St Ives and Granny Smith sites, with Ghana the second- largest contributor of revenue. The company is involved in underground and surface gold and copper mining and related activities, including exploration, development, extraction, processing, and smelting. In Peru, the company also produces copper, and it has other precious metal exploration interests in Africa, Eurasia, Australasia, and the Americas.

Stock Code GFI
Financial Condition Analysis Below
It is important to analyze the financial condition of the company you want to invest in because if a company goes bankrupt, the chances are high that you will lose all your investment. Even if the company does not go bankrupt, the deterioration in financial condition will cause more and more investors to avoid the company and valuation will drop. Weak financial condition also limits the opportunities that a company has to grow its business.
In order to determine the financial condition of the company, we usually use the Z score, which was introduced by Edward Altman,  a Professor of Finance at New York University. This score is a composite measure of a firm’s financial condition and has been proven to be able to predict with high accuracy whether a firm will go into bankruptcy within the next two years.

Gold Fields Altman Z-Score

Z-score has been deteriorating since 2002. The main reasons for this are:
* lower working capital
* lower EBIT as a proportion of total assets
* higher level of borrowings
* lower revenue as a proportion of total assets

The latest Z-Score of the company as at Dec 2016 was 1.5, which is in the distressed zone.

The various components that go into the Z-Score are shown below:

Gold Fields Sales Turnover

This is the Revenue Turnover ratio and it reflects the amount of revenue the company is able to generate from the use of its assets.  Companies that have difficulty generating revenue cannot generate consistent cash flow to pay its bills.
The amount of revenue generated from assets has been on an uptrend since 2012.

Gold Fields Retained Earnings

The more profits are retained within the firm, the greater the buffer of reserves for the company to weather difficult times.
The level of retained earnings relative to assets has been on an uptrend since 2011. Currently, retained earnings are at 24.6% of total assets.

Gold Fields ROA

This measures the ability of the company to generate EBIT (earnings before interest and taxes) from its assets.
EBIT as a % of assets has been erratic. Currently, EBIT is at 6.9% of total assets.

Gold Fields Total Liabilities

This is an indication of the level of borrowings of the firm. A high level of borrowings will affect survivability as it may not have enough cash flows to meet its debt obligations.
The level of borrowings has been on an uptrend since 2002.

Gold Fields Working Capital

Working capital is essential to the operations of the company and a low level of working capital may result in liquidity problems. Working capital relative to total assets has been on an uptrend since 2008.
Financial condition analysis is an important part of stock analysis because an investor will make a loss on a stock if it goes bankrupt. The financial condition of a company is also important because investors will attribute a discount to the theoretical fair valuation of the company depending on how bad the financial condition is. ProThinker uses multiple valuation indicators to value a stock and then attribute a discount when necessary depending on the financial condition.
The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Charts are from ProThinker Stock Report. Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from gurufocus and/or 4-traders.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.