Stock Market Briefing: S&P 500 Financial Ratios

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Stock Market Briefing: S&P Financial Ratios July 2, 18 Dr. Ed Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-6 jabbott@ Mali Quintana 48-664-1333 aquintana@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents S&P Leverage Ratios 3 S&P Liquidity Ratios 4 S&P Asset Management Ratios S&P Other Data 6 S&P and Sectors Return on Equity 7-11 S&P Interest Expense - July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

1.3 1.2 1.1 1..9.8.7 Figure 1. S&P LEVERAGE RATIOS Leverage Ratios Debt to Assets (.78) Debt to Equity (.86) Interest Coverage (.47) Net Debt to EBITDA (9.6) 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 S&P Leverage Ratios 17 13 11 9 8 7 6 4 3 2 4 4 3 Figure 2. S&P COMPONENTS OF LEVERAGE RATIOS (dollars per share) Components of Leverage Ratios Left scale Total Debt (.36) Total Assets (39.32) Long Term Debt (7.98) Total Equity (8.1) Right scale Ebitda (261.94) Interest Expense (.2) Cash & Equivalents (23.3) 17 6 4 4 3 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Page 3 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

1. Figure 3. S&P LIQUIDITY RATIOS S&P Liquidity Ratios 1. 1. 1. 1. 17 1. 1. 1. Liquidity Ratios Current Ratio (1.) Quick Ratio (1.1) 1. 1. 1. 1..9.9.9 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19.9 18 Figure 4. S&P COMPONENTS OF LIQUIDITY RATIOS (dollars per share) 17 3 16 1 Components of Liquidity Ratios Left scale Current Assets (1737.41) Current Liabilities (9.) Right scale Inventory (213.66) 8 6 4 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Page 4 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

3. Figure. S&P Asset Management Ratios S&P ASSET MANAGEMENT RATIOS. 3. Asset Management Ratios Fixed Asset Turnover (2.37) Total Asset Turnover (.32). 2.7.4 2..4 17 2..3 2. 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19. 4 Figure 6. S&P COMPONENTS OF ASSET MANAGEMENT RATIOS (dollars per share) 4 4 3 Components of Asset Management Ratios Fixed Assets (29.42) Total Assets (39.32) Sales (31.7) 4 3 17 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Page / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

S&P Other Data 8 7 Figure 7. S&P CAPITAL EXPENDITURES (dollars per share) 22 21 7 6 Annual Capex (left scale) (64.1) Quarterly Capex (right scale) (18.6) 17 Q4 19 6 18 17 16 4 4 3 13 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 4 Figure 8. S&P EFFECTIVE CORPORATE TAX RATE* Tax Rate (24.4) 4 4 4 3 3 17 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 * Derived from S&P Analyst Handbook, where tax rate is income tax as percentage of pretax income. Source: Haver Analytics and Standard & Poor s. Page 6 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

18 Figure 9. S&P and Sectors Return on Equity S&P RETURN ON EQUITY* 18 16 17 16 8 8 6 4 2 Operating ROE (.6) Reported ROE (13.7) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 6 4 2 Figure. S&P CONSUMER DISCRETIONARY RETURN ON EQUITY* 17 - - - Operating ROE (23.2) Reported ROE (24.7) - - - - 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 - Page 7 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

4 Figure 11. S&P and Sectors Return on Equity S&P CONSUMER STAPLES RETURN ON EQUITY* 4 3 3 17 Operating ROE (.1) Reported ROE (23.4) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 3 Figure. S&P ENERGY RETURN ON EQUITY* 3 17 - - Operating ROE (.) Reported ROE (6.7) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 - - Page 8 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

Figure 13. S&P and Sectors Return on Equity S&P FINANCIALS RETURN ON EQUITY* 17 - - - - Operating ROE (9.1) Reported ROE (8.6) - - - 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 - Figure. S&P HEALTH CARE RETURN ON EQUITY* 17 Operating ROE (19.3) Reported ROE (.) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Page 9 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

S&P and Sectors Return on Equity 26 24 Figure. S&P INDUSTRIALS RETURN ON EQUITY* 17 26 24 22 22 18 18 16 16 Operating ROE (23.9) Reported ROE (.6) 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Figure 16. S&P INFORMATION TECHNOLOGY RETURN ON EQUITY* 17 - - Operating ROE (.) Reported ROE (17.) - - - 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 - Page / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

4 3 Figure 17. S&P and Sectors Return on Equity S&P TELECOMMUNICATION SERVICES RETURN ON EQUITY* 4 3 Operating ROE (.4) Reported ROE (32.) 17-93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19-16 Figure 18. S&P UTILITIES RETURN ON EQUITY* 16 17 8 8 6 Operating ROE (.9) Reported ROE (9.) 6 4 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 4 Page 11 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

6 Figure 19. S&P INTEREST EXPENSE (dollars per share) S&P Interest Expense 6 Interest Expense (.2) 4 4 17 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Source: Haver Analytics and Standard & Poor s. 6 Figure. S&P INTEREST EXPENSE MARGIN (percent of sales) (2.) 6 4 4 3 3 2 17 2 1 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 1 Page / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

Figure 21. S&P INTEREST EXPENSE MARGIN (percent of EBITDA) S&P Interest Expense (9.6) 17 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Source: Haver Analytics and Standard & Poor s. Figure 22. S&P INTEREST EXPENSE MARGIN (percent of net income) (22.2) 17 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 Page 13 / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

6 4 Figure 23. S&P INTEREST EXPENSE (dollars per share) S&P Interest Expense Interest Expense* Pre-tax (.2) After-tax (18.92) Net after-tax subsidy (6.) 6 4 17 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 13 16 17 18 19 * After-tax interest expense and net after-tax subsidy are derived using the S&P s effective tax rate for each year Source: Haver Analytics and Standard & Poor s. Page / July 2, 18 / Stock Market Briefing: S&P Financial Ratios www.

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