The biggest risk to any investment is the complete loss of that investment through bankrupcy. That's why we look at leverage risk first. In addition we want to make sure that a corporation can fund it's near term liabilities without having to go to the credit markets.
The table below shows amounts invested for growth in past years.
| Reinvestment ( values in Millions ) | 2009 | 2008 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|
| + R&D investment | -- | -- | -- | -- | -- |
| + Working capital investment | ($369) | $6,100 | ($5,427) | $120 | ($203) |
| + Fixed Capital investment | $1,993 | $1,968 | $1,648 | $1,407 | $899 |
| + Acquisitions | -- | -- | -- | -- | -- |
| - R&D amortized | -- | -- | -- | -- | -- |
| - Fixed capital depreciation | -- | -- | -- | $938 | $932 |
| = Reinvested | $1,624 | $8,068 | ($3,779) | $589 | ($236) |
| Free cash flow to firm calculation( values in Millions ) | 2009 | 2008 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|
| Adjusted EBIT | $8,864 | $7,439 | $7,873 | $6,605 | $6,695 |
| Marginal tax rate | 35 % | 35 % | 35 % | 35 % | 35 % |
| Adjusted EBIT after tax | $5,762 | $4,835 | $5,117 | $4,293 | $4,352 |
| - Reinvestment expense (gain) | $1,624 | $8,068 | ($3,779) | $589 | ($236) |
| = Free cash flow to firm (FCFF) | $4,138 | ($3,233) | $8,896 | $3,704 | $4,588 |
| Return on investment | 2009 | 2008 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|
| Return on equity (ROE) | 27.52 % | 28.37 % | 35.35 % | 31.06 % | 30.57 % |
| Return on capital (ROC) | 18.51 % | 23.62 % | 28.07 % | 24.52 % | 25.46 % |
| Adjusted return on equity | 23.23 % | 23.62 % | 30.24 % | 26.14 % | 27.29 % |
| Adjusted return on capital | 18.51 % | 23.62 % | 28.07 % | 24.52 % | 25.46 % |
See the adjustment section below for details on how the adjustments were made.
| Past growth rates | 2 years | 4 years | 6 years | 10 years | all |
|---|---|---|---|---|---|
| EBIT (adjusted) | 6.08 % | 6.72 % | 6.68 % | 7.60 % | 6.22 % |
| Net income | 6.67 % | 7.82 % | 6.71 % | 9.12 % | 7.27 % |
| Revenue | 33.96 % | 34.99 % | 27.64 % | 17.82 % | 11.36 % |
| Earnings ( values in Millions ) | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996 | 1995 | 1994 | 1993 | 1992 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $92,970 | $95,832 | $28,857 | $24,088 | $23,104 | $21,742 | $21,044 | $19,564 | $17,545 | $19,889 | $19,805 | $18,813 | $18,868 | $18,673 | $18,018 | $16,181 | $13,957 | $5,127 |
| Cost of sales | $11,088 | $11,374 | $10,406 | $8,164 | $8,195 | $7,674 | $7,762 | $7,105 | $6,044 | $6,204 | $6,009 | $5,562 | $6,015 | $6,738 | $6,940 | $6,168 | $5,160 | $3,219 |
| Gross profit | $81,882 | $84,458 | $18,451 | $15,924 | $14,909 | $14,068 | $13,282 | $12,459 | $11,501 | $13,685 | $13,796 | $13,251 | $12,853 | $11,935 | $11,078 | $10,013 | $8,797 | $1,908 |
| Sales, general and administrative | $11,358 | $11,774 | $10,945 | $9,431 | $8,739 | $7,890 | $7,488 | $7,001 | $6,149 | $8,551 | $9,001 | $8,211 | $7,852 | $8,020 | $7,052 | $6,297 | $5,707 | $1,602 |
| Restructuring | $273 | $249 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Other expenses | $63,611 | $64,048 | $583 | $185 | $178 | $562 | $711 | $353 | $10 | $1,443 | $813 | $73 | -- | -- | -- | $104 | -- | $9 |
| Operating income | $6,640 | $8,387 | $6,923 | $6,308 | $5,992 | $5,616 | $5,083 | $5,105 | $5,342 | $3,691 | $3,982 | $4,967 | $5,001 | $3,915 | $4,026 | $3,612 | $3,090 | $297 |
| Other income | $498 | $666 | $236 | $195 | $23 | $24 | $8 | -- | $130 | $99 | $98 | $257 | $946 | $518 | $160 | -- | $16 | -- |
| Net interest expense (income) | -- | -- | -- | $27 | $5 | $39 | $2 | ($10) | ($36) | $102 | $77 | $58 | $47 | $48 | $27 | $18 | $24 | $312 |
| Income before taxes | $7,138 | $9,053 | $7,159 | $6,476 | $6,010 | $5,601 | $5,089 | $5,115 | $5,508 | $3,688 | $4,003 | $5,166 | $5,900 | $4,385 | $4,159 | $3,594 | $3,082 | ($15) |
| Taxes | $2,040 | $1,632 | $1,892 | $1,498 | $1,818 | $1,375 | $1,148 | $1,523 | $1,691 | $1,222 | $1,388 | $1,665 | $1,926 | $1,104 | $1,342 | $1,174 | $997 | -- |
| Minority interest | $164 | $134 | $46 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Income before extraordinary items | $5,262 | $7,555 | $5,313 | $4,978 | $4,192 | $4,226 | $3,941 | $3,592 | $3,817 | $2,466 | $2,615 | $3,501 | $3,974 | $3,281 | $2,817 | $2,420 | $2,085 | ($15) |
| Equity in net income of unconsolidated entities | $1,562 | ($1,748) | $668 | $102 | $680 | $621 | $406 | $384 | $152 | ($289) | ($184) | $32 | $155 | $211 | $169 | $134 | $91 | -- |
| Cumulative effect of accounting change | -- | -- | -- | -- | -- | -- | -- | $926 | -- | -- | -- | -- | -- | -- | -- | -- | -- | $171 |
| Net income | $6,824 | $5,807 | $5,981 | $5,080 | $4,872 | $4,847 | $4,347 | $3,050 | $3,969 | $2,177 | $2,431 | $3,533 | $4,129 | $3,492 | $2,986 | $2,554 | $2,176 | ($186) |
| Current Assets | ||||||||||||||||||
| Cash and equivalent | $11,199 | $9,151 | $4,701 | $2,440 | $4,701 | $6,707 | $3,362 | $2,260 | $1,866 | $1,819 | $1,611 | $1,648 | $1,737 | $1,433 | $1,167 | $1,386 | $998 | $6 |
| Short term investments | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Accounts receivable | $4,430 | $3,758 | $3,090 | $2,587 | $2,281 | $2,244 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | $391 |
| Inventory | $2,650 | $2,354 | $2,187 | $1,641 | $1,379 | $1,420 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | $212 |
| Deferred taxes | $478 | $118 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Prepaid expenses | $305 | $288 | -- | $1,623 | $1,778 | $1,849 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | $80 |
| Other assets | $2,517 | $1,882 | $2,198 | $150 | $111 | $61 | $120 | $85 | $68 | $4,801 | $4,869 | $4,732 | $4,232 | $4,477 | $4,283 | $3,819 | $3,436 | $12 |
| Total current assets | $21,579 | $17,551 | $12,176 | $8,441 | $10,250 | $12,281 | $3,482 | $2,345 | $1,934 | $6,620 | $6,480 | $6,380 | $5,969 | $5,910 | $5,450 | $5,205 | $4,434 | $701 |
| Current Liabilities | ||||||||||||||||||
| Accounts payable | $8,859 | $6,657 | $6,205 | $5,055 | $4,493 | $4,403 | $4,058 | $3,692 | $3,679 | $3,905 | $3,714 | $3,141 | $3,249 | $2,972 | $3,103 | $2,564 | $2,217 | $682 |
| Debt payments | $8,811 | $6,373 | $465 | $3,268 | $4,546 | $6,021 | $2,906 | $2,655 | $3,899 | $4,816 | $5,373 | $4,462 | $3,074 | $3,397 | $2,923 | $2,083 | $1,672 | $622 |
| Accrued Expenses | -- | -- | -- | $567 | $797 | $709 | $922 | $994 | $851 | $600 | $769 | $1,037 | $1,056 | $1,037 | $1,322 | $1,530 | $1,282 | -- |
| Tax payable | $478 | $118 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Other liabilities | $360 | $573 | $6,318 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Total current liabilities | $18,508 | $13,721 | $12,988 | $8,890 | $9,836 | $11,133 | $7,886 | $7,341 | $8,429 | $9,321 | $9,856 | $8,640 | $7,379 | $7,406 | $7,348 | $6,177 | $5,171 | $1,304 |
| Working capital | $3,071 | $3,830 | ($812) | ($449) | $414 | $1,148 | ($4,404) | ($4,996) | ($6,495) | ($2,701) | ($3,376) | ($2,260) | ($1,410) | ($1,496) | ($1,898) | ($972) | ($737) | ($603) |
| Non cash working capital | $683 | $1,052 | ($5,048) | $379 | $259 | $462 | ($4,860) | ($4,601) | ($4,462) | $296 | $386 | $554 | ($73) | $468 | ($142) | ($275) | ($63) | $13 |
| Investment in working capital | ($369) | $6,100 | ($5,427) | $120 | ($203) | $5,322 | ($259) | ($139) | ($4,758) | ($90) | ($168) | $627 | ($541) | $610 | $133 | ($212) | ($76) | -- |
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