Company of choice - 3M
Page 1
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Analysis of financial (
Current Ratio,
Quick Acid-Test) Ratio)
for the company (3M)
Also attach a Line graph of three-year trend data from 2019-2022
Page 2- a script to read for a minute or less video explaining all the work on page 1
Additional resources are attached, I also attached the the pre recorded work from the other 3 members of my team
Company Research Report Rubric Advanced (100%) Proficient (85%) Basic (70%) Developing (55%) Unacceptable (0%) Points Earned Demonstrate an understanding of how the financial ratios are calculated (20 pts). Complete and accurate financial analysis regarding financial ratio calculations, including detailed explanations and supporting examples. There is no confusion regarding the way in which any of the ratios are calculated. Largely accurate and mostly complete financial analysis, but may lack supporting examples or clear detail. (student supplied 3 accurate, calculations and supporting documentation) Minor errors and/or omissions in the financial analysis or explanations and does not provide adequate supporting examples or clear detail. (student supplied 1-2 accurate calculations and supporting documentation) Substantial confusion associated with the financial analysis or explanations. (student supplied calculations but all were inaccurate and there was no supporting documentation) Required elements missing or significantly flawed. Explain how financial ratios provide the firm with strategic information and insight on its forensic/financial health (45 pts). Complete and accurate analysis regarding the strategic significance and financial health implications of financial ratios, including detailed explanations and supporting examples. There is no confusion regarding the analysis and explanations. Largely accurate and mostly complete financial analysis, but may lack supporting examples or clear detail. (student supplied 3 accurate, calculations and supporting documentation) Minor errors and/or omissions in the financial analysis or explanations and does not provide adequate supporting examples or clear detail. (student supplied 1-2 accurate calculations and supporting documentation) Substantial confusion associated with the financial analysis or explanations. (student supplied calculations but all were inaccurate and there was no supporting documentation) Required elements missing or significantly flawed. Present financial ratios and analysis in an analytical manner that incorporates tables and line charts (32.50 pts). All of the analysis is presented in a logical manner and effectively incorporates and references all tables and line charts to support financial analysis. The primary objectives and conclusions of the analysis are clearly stated and supported. Most of the analysis, tables and charts are presented in an analytical manner, but lacks clearly stated objectives or conclusions. Minor errors or omissions in the presentation of analysis and does not clearly state objectives or support for the conclusions of the analysis. Substantial confusion associated with the way in which the analysis, tables, and charts are presented. Required elements missing or significantly flawed. Format the report in a professional and business-like manner that meets the specified length and formatting requirements (15 pts). Complete and accurate formatting of financial analysis and tables, including APA and specified length requirements. Most of the formatting of financial analysis, tables, and charts is complete (no more than 2 errors) and accurate, but deviates from specified length requirements by less than one page. Minor errors or omissions in the formatting of the analysis, tables, and charts (no more than 3 errors), but may significantly deviate from specified length requirements (+/- one page or more) Substantial errors or omissions associated with the formatting of the analysis, tables, and charts. Required elements missing or significantly flawed. Effectively communicate, in a recorded video, financial analysis in a professional manner that is designed for a business audience (37.50 pts). Effective communication that integrates ethical reasoning, including supporting examples, and leaves no confusion regarding the overall assessment of the financial results to a business audience. Effective communication that integrates ethical reasoning and explanations, but may lack 3 or more substantial supporting examples or clear detail. Minor errors in communication of financial results or the integration of ethical reasoning and does not provide adequate supporting examples or clear detail (no more than 2). Substantial confusion regarding the communication of financial results or the integration of ethical reasoning. Required elements missing or significantly flawed. 160 120 100 80 60 50 40 30 20 15 Percent shares traded 18 12 6 Target Price Range 2025 2026 2027 COLGATE-PALMOLIVE NYSE-CL 77.12 33.2 33.526.0 2.02 2.4% TIMELINESS 4 Raised 12/2/22 SAFETY 1 Raised 10/11/02 TECHNICAL 4 Lowered 11/18/22 BETA .65 (1.00 = Market) 18-Month Target Price Range Low-High Midpoint (% to Mid) $67-$99 $83 (10%) 2025-27 PROJECTIONS Ann’l Total Price Gain Return High 100 (+30%) 9% Low 85 (+10%) 5% Institutional Decisions 1Q2022 2Q2022 3Q2022 to Buy 651 664 624 to Sell 753 688 700 Hld’s(000) 652084 657703 654554 High: 47.4 55.5 66.5 71.3 71.6 75.4 77.3 77.9 76.4 86.4 85.6 85.6 Low: 37.4 43.6 52.6 59.8 50.8 61.4 63.4 57.4 58.6 58.5 74.0 67.8 % TOT. RETURN 11/22 THIS VL ARITH.* STOCK INDEX 1 yr. 5.8 -4.6 3 yr. 21.8 40.0 5 yr. 19.8 49.4 CAPITAL STRUCTURE as of 9/30/22 Total Debt $8248 mill. Due in 5 Yrs $2000 mill. LT Debt $8219 mill. LT Interest $400 mill. (Total int. cov.: 18.6x) (93% of Cap’l) Leases, Uncapitalized Annual rentals $156 mill. Pension Assets-12/21 $82.0 mill. Oblig. $805.0 mill. Pfd Stock None Common Stock 835,214,210 shs. MARKET CAP: $64.4 billion (Large Cap) CURRENT POSITION 2020 2021 9/30/22 ($MILL.) Cash Assets 888 832 938 Receivables 1264 1297 1425 Inventory (FIFO) 1673 1692 2073 Other 513 576 842 Current Assets 4338 4397 5278 Accts Payable 1393 1479 1541 Debt Due 267 51 29 Other 2744 2521 2922 Current Liab. 4404 4051 4492 ANNUAL RATES Past Past Est’d ’19-’21 of change (per sh) 10 Yrs. 5 Yrs. to ’25-’27 Sales 2.0% 1.5% 5.0% ‘‘Cash Flow’’ 2.5% 5.0% 5.5% Earnings 2.0% 5.0% 6.5% Dividends 5.5% 3.5% 3.0% Book Value -14.5% - - 45.0% Cal- Full endar Year QUARTERLY SALES ($ mill.) Mar.31 Jun.30 Sep.30 Dec.31 2019 3884 3866 3928 4015 15693 2020 4097 3897 4153 4324 16471 2021 4344 4260 4414 4403 17421 2022 4399 4484 4455 4437 17775 2023 4450 4500 4600 4575 18125 Cal- Full endar Year EARNINGS PER SHARE A Mar.31 Jun.30 Sep.30 Dec.31 2019 .65 .68 .67 .75 2.75 2020 .83 .74 .81 .75 3.14 2021 .80 .80 .75 .18 2.55 2022 .66 .72 .74 .13 2.25 2023 .70 .75 .75 .20 2.40 Cal- Full endar Year QUARTERLY DIVIDENDS PAID B ■ Mar.31 Jun.30 Sep.30 Dec.31 2018 .42 .42 .42 .42 1.68 2019 .42 .43 .43 .43 1.71 2020 .43 .44 .44 .44 1.75 2021 .44 .45 .45 .45 1.79 2022 .45 .47 .47 .47 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 11.94 13.55 15.29 15.51 15.73 17.43 18.26 18.94 19.05 17.96 16.76 17.67 18.01 18.36 1.85 2.10 2.27 2.64 2.57 2.97 3.10 2.91 2.89 2.05 3.18 3.17 3.37 3.38 1.46 1.69 1.83 2.19 2.16 2.47 2.58 2.38 2.36 1.52 2.72 2.59 2.75 2.75 .63 .70 .78 .86 1.02 1.14 1.22 1.33 1.42 1.50 1.55 1.59 1.66 1.71 .46 .57 .68 .58 .56 .56 .60 .73 .83 .77 .65 .63 .51 .39 1.16 2.05 1.74 2.98 2.70 2.47 2.34 2.51 1.26 d.34 d.27 d.07 d.12 .14 1025.3 1018.1 1002.8 988.33 989.70 960.04 935.73 919.95 906.71 892.74 906.71 874.70 862.91 854.70 20.6 20.5 19.8 16.1 18.6 17.3 19.6 25.1 28.0 44.1 25.8 27.9 24.2 25.1 1.11 1.09 1.19 1.07 1.18 1.09 1.25 1.41 1.47 2.22 1.35 1.40 1.31 1.34 2.1% 2.0% 2.2% 2.5% 2.5% 2.7% 2.4% 2.2% 2.2% 2.2% 2.2% 2.2% 2.5% 2.5% 17085 17420 17277 16034 15195 15454 15544 15693 25.9% 25.4% 26.4% 27.3% 28.4% 27.6% 28.0% 27.2% 425.0 439.0 442.0 449.0 443.0 475.0 511.0 519.0 2472.0 2241.0 2180.0 1384.0 2441.0 2299.0 2400.0 2367.0 32.1% 32.4% 33.8% 44.0% 30.8% 29.8% 26.2% 23.4% 14.5% 12.9% 12.6% 8.6% 16.1% 14.9% 15.4% 15.1% 820.0 352.0 917.0 850.0 1033.0 1231.0 452.0 141.0 4926.0 4749.0 5644.0 6269.0 6250.0 6566.0 6354.0 7333.0 2189.0 2305.0 1145.0 d299.0 d243.0 d60.0 d102.0 117.0 34.8% 32.6% 33.1% 24.3% 41.9% 36.5% 39.5% 32.7% NMF 97.2% NMF - - - - - - - - NMF 54.6% 37.3% 64.1% - - - - - - - - NMF 52% 62% 66% 108% 62% 67% 66% 68% 2020 2021 2022 2023 © VALUE LINE PUB. LLC 25-27 19.38 20.73 21.30 21.80 Sales per sh 25.90 3.81 3.24 2.95 3.10 ‘‘Cash Flow’’ per sh 4.85 3.14 2.55 2.25 2.40 Earnings per sh A 4.10 1.75 1.79 1.83 1.87 Div’ds Decl’d per sh B■ 2.10 .48 .67 .70 .70 Cap’l Spending per sh .75 .87 .72 .75 1.25 Book Value per sh C 5.40 849.89 840.48 835.00 832.50 Common Shs Outst’g D 830.00 24.0 31.2 Bold figures are Value Line estimates Avg Ann’l P/E Ratio 22.5 1.23 1.71 Relative P/E Ratio 1.25 2.3% 2.2% Avg Ann’l Div’d Yield 2.3% 16471 17421 17775 18125 Sales ($mill) 21500 27.5% 31.7% 26.5% 27.0% Operating Margin 30.0% 539.0 556.0 570 585 Depreciation ($mill) 620 2695.0 2166.0 1880 2000 Net Profit ($mill) 3400 21.6% 24.3% 25.0% 25.0% Income Tax Rate 25.0% 16.4% 12.4% 10.6% 11.0% Net Profit Margin 15.8% d66.0 346.0 380 420 Working Cap’l ($mill) 625 7334.0 7194.0 8250 8000 Long-Term Debt ($mill) 7000 743.0 609.0 640 1025 Shr. Equity ($mill) 4500 34.4% 28.9% 21.0% 22.0% Return on Total Cap’l 29.5% NMF NMF NMF NMF Return on Shr. Equity 75.5% NMF 80.0% NMF NMF Retained to Com Eq 37.0% 61% 78% 81% 78% All Div’ds to Net Prof 51% Company’s Financial Strength A Stock’s Price Stability 100 Price Growth Persistence 25 Earnings Predictability 65 (A) Diluted earnings. Excludes nonrec. gains/(losses): ’09, ($0.27); ’10, ($0.26). In- cludes n/r gain/(loss): ’08, ($0.11); ’15, $0.08; ’17, ($0.31). EPS may not sum due to round- ing. Next egs. report due late January. (B) Dividends historically paid in mid-February, mid-May, mid-August, and mid-November. ■ Div’d reinvestment plan available. (C) Inc. intang. In ’21: $5,746 mill., $6.84/sh. (D) In mill., adjusted for stock split. BUSINESS: Colgate-Palmolive Company is the second-largest domestic maker of toiletries, and other household products. Major brands: Ajax, Fab, Murphy, Palmolive cleansers; Colgate tooth- paste; Irish Spring, Palmolive, Sanex, Softsoap soaps; Mennen shave cream; Hill’s pet food brands—Science Diet and Prescription Diet. 70% of ’21 sales came from overseas (45% from emerging markets). Walmart accounted for 12% of ’21 sales. 6.2%. Has about 33,800 employees. ESOP controls 7.6% of common equiv- alent shares. Off./dir. own less than 1% of stock; Vanguard, 9.1%; BlackRock, 7.7%; State St., 5.9% (3/22 proxy). Chair./Pres./CEO: Noel R. Wallace. Inc: DE. Address: 300 Park Ave., New York, NY 10022. Tel.: 212-310-2000. Internet: www.colgatepalmolive.com. The difficult operating backdrop has been weighing on Colgate-Palmolive. Operating and logistical expenses contin- ued to soar over the past few months owing to inflationary pressures, supply- chain issues, and elevated commodity pric- ing. Plus, the strength of the U.S. dollar erased some of the gains from overseas markets. While the company benefited from a surge in demand for many of its cleaning products during the height of the COVID-19 pandemic, this tailwind has tapered over the past several quarters, thereby hurting year-to-year comparisons. The company will probably post lack- luster results for 2022. Earnings per share may well decline nearly 12% for the full year. The top line, supported by higher selling prices and a decent product mix, ought to eke out a 2% gain. That said, organic revenues, which exclude the for- eign currency drag and modest benefit from the Red Collar Pet Foods acquisition, will likely increase at a mid- to upper- single-digit clip for the full year. Things may begin to improve next year. Productivity enhancements, cost controls, and pricing initiatives should help counter the aforementioned operating headwinds. Consequently, we believe reve- nues will climb another 2% in 2023, while share earnings rebound 5%-10%. Colgate has been widening its foot- print. Product innovation ought to remain a key