FAANG revisited – alternative financial ratios visualised III

Two weeks ago I posted a rather heavy story, discussing a lot of financial theory. This time I will focus on the companies and the numbers again.

Before we go on, I have to share something. I really like MOOCs and I already attended a lot of courses at FutureLearn Some were about e.g. modern (online) marketing methods (as my education was about classical marketing), others were not related to AnRep3D at all.

Business Woman working

(Photo by Daniela_oliiver on Pixabay)

 

 

 

 

 

 

 

 

 

 

 

This time I took a course from edX about finding the right markets for ones technological innovations. I think AnRep3D is very innovative after all, but it was designed for the visualisation of financial information in the first place. Yet there are other opportunities out there, I think. This means that during the next period I will show examples of alternative subjects again, as I already did with energy. Of course energy will be an important target market as well and I will blog about it, but I am also thinking of new markets.

Autonomous light bulb

(Photo by ColiN00B on Pixabay)

A bit scary, because I know about Finance and Energy and the other subjects might be less familiar to me. Well, let’s see what comes up. I hope you will like it!

Back to the FAANG companies! We already saw Amazon in the 3D-graph and now we should combine it with Alphabet. Although the name of the holding changed from Google to Alphabet, the stock exchange still refers to it as GOOG, but I put in a label Alphabet.

Google SEO (Photo by Simon on Pixabay)

Of course I had to extract some numbers from the Forms 10-Q. The format is really nice and clear, but still companies have some room for their own structure. It turns out Alphabet only mentions cumulative “Net cash provided by operating activities”, so for Q2 – Q4 calculations were needed.  There is no Q4 of course as this will be covered by form 10-K, so the values for Q3 have to be subtracted for Revenue and Cash Flow. As the balance is a snapshot one has only to be careful to pick the right rows and columns – no calculations needed.

After generating the 3D-graph with the two companies in, I decided to reverse the order again. It seems so logical to enter the values chronologically, but the most recent values are the most interesting. By turning the 3D-graph around, we can see the reversed order, so no information gets lost. The picture below (clickable, as usual) is a composite. In the real 3D-graph the legend (key) is in front of the “buildings” and below ground-level, but to keep the picture more compact I inserted another screenshot.

Amazon Alphabet 3D

 

Double-click the screenshot to see the live 3D-graph in your browser. For manipulation: Clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

For more information, please have a look at our other posts, our website (https://anrep3d.com) or our youtube-channel. Again, the free demo-package (zip) can be downloaded, unpacked in a folder and the .jar file can be started immediately.

Our email-address is info@anrep3d.com  On Twitter we are @AnRep3D and we have a LinkedIn company-page.

That’s all for now. Next time I hope I will be able to add Apple and then we will probably move on, exploring other subjects. Yet Finance will be visited on a regular basis.

Mars rover (Photo by WikiImages on Pixabay)

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FAANG revisited – alternative financial ratios visualised II

Time for a 3D graph! In the previous post I explained how we will use a different set of values to generate this new 3D-graph. Instead of Profit, we will take Cash Flow provided by Operations (The Net Sales or Revenue still being the total height) and where we usually took Equity and Total Assets, now it will be Current Liabilities (width) and Current Assets (depth).

Metaphor for Cash Flow (Photo by Artem Bali on Pexels)

This combination allows us to compare the Cash Flow to both Revenue (sometimes called Net Sales or Total Sales) and Current Liabilities. Looking from another perspective – top or bottom, the shape of a “building” in the 3D-graph actually shows the current ratio (Current Assets / Current Liabilities).

Buildings in Aerial View (Photo by Free-Photos on Pixabay)

If the “ground plan” shows a broad rectangle, the Current Liabilities are much larger than the Current Assets and the Current Ratio will below 1.A deep rectangle means the opposite, indicating that the Current Ratio is above 1. If it is – more or less –  a square, both values are balanced, meaning the Current Ratio is about 1.

This week we will start with Amazon to populate the 3D-graph. Other FAANG companies will be added later. The website Chron has an article on ratios related to Cash Flows and Current Liabilities. Quoting from the article:

“Obtain the operating cash flow from the cash flow statement and divide by the total sales found at the top of the income statement. This number describes the efficiency of the company’s efforts of turning sales into cash. If the company has $200,000 in operating cash flow and $1,000,000 in sales, the calculation is ($200,000 divided by $1,000,000) equals 0.2 times.”

As we use the Total Sales for the total height of the building and the Cash Flow from Operations to create the green roof-part of it (beware, a negative cash flow will add a red roof on top of the Total Sales, leaving Total Sales as the yellow part), we have a visual indication of the ratio. Another part of the article is about the Operating Cash Flow Ratio. Quoting from the article again:

“Find the cash flow from operations on the cash flow statement. Divide that number by the current liabilities on the balance sheet to find the operating cash flow ratio. This number gives analysts an idea of how much cash the company can provide beyond its liability payments. If the company has $900,000 in cash flow from operations as well as $150,000 in current liabilities, the operating cash flow ratio is ($900,000 divided by $150,000) equals 6.0 times.”

In the 3D-graph, this ratio is visual, because the width of the building – and the width of the roof for that matter – represents Current Liabilities and the height of the roof shows the Cash Flow from Operations.

3D-graph Q Front View

Double-click the screenshot to see the live 3D-graph in your browser. For manipulation: Clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Unfortunately Q1 2017, in front of the screenhot (double click and open the real 3D-graph to see all quarters more clearly) shows a negative cash flow. On the other hand both the width of the second buidling (Q2 2017) and the heigth of the green roof are visible and it is clear that the Cash Flow from Operations is about 1/10th of the Current Liabilities.

3D-graph Q Rear View In more recent Quarters, the the ratio is going up. Looking from the rear, we see Q3 2018 and here Cash Flow from Operations is about 1/6th of the Current Liabilities.

 

Finally, we can also see the Current Ratio in the 3D-graph as discussed above. Last quote from the article:

“Find the current assets and current liabilities on the balance sheet. They are line items on the balance sheet. Divide the current assets by the current liabilities to find the current ratio, which is a fast way to calculate a firm’s health. If the company has $600,000 in current assets and $200,000 in current liabilities, the current ratio ($600,000 divided by $200,000)”

This ratio is shown by the top-view or bottom view. From the top we will also see if the Cash Flow from Operations was positive (green) or negative (red), so let’s take the top-view.

3D-graph Q Top View

Again, double-click the screenshot to see the live 3D-graph in your browser. For manipulation: Clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Be aware that the article is about small businesses. Amazon isn’t a small business of course (its amounts are roughly a hundred thousand times higher than in the example), meaning the calculation will be the same, but the interpretation could be different. As a matter of fact you can see the Current Liabilities are much larger than the Cash Flow from Operations. At the same time, the Current Liabilities are well-balanced against the Current Assets.

Amazon

(Photo by SilviaP_Design on Pixabay)  Wrong Amazon, I know, but a picture of a Kindle or an Alexa is so boring).

Then another comment: all the ratios mentioned can be derived in a spreadsheet. AnRep3D doesn’t replace these calculations, but offers the opportunity to spot the interesting ones from a landscape with dozens of firms over dozens of quarters. There is no need to calculate all the ratios beforehand. Looking at more than one hundred buildings first will give a good impression and help to focus your scarce time on the really important companies at a specific moment. Once you have spotted them, it’s time to deep-dive and look into your Excel, which will provide detailed numbers and 2D-graphs.

For more information, please have a look at our other posts, our website (https://anrep3d.com) or our youtube-channel. Again, the free demo-package (zip) can be downloaded, unpacked in a folder and the .jar file can be started immediately.

Our email-address is info@anrep3d.com On Twitter we are @AnRep3D and we are also at LinkedIn.

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FAANG revisited – alternative financial ratios visualised

AnRep3D is able to visualise financial data from companies in time. By now most readers will know, but until now we have been rather conservative in this blog. It’s time to show more of the power of the generator.

Power Station(Photo by stevepb on pixabay)

Often we used the familiar set of Revenue, Profit, Equity and Total Assets (sometimes switching to Gross Profit or EBITDA and in some occasions taking Total Liabilities). Annual Reports were used to get the numbers and this seemed to be a logical choice because of the name of the product. However, there is no reason to avoid quarterly updates. Then, Profit can be replaced by something like Cash Flow from Operations (roof) and by taking Current Liabilities instead of Equity (width) and Current Assets only (depth), we have a completely different set of ratios (like current ratio and cash flow ratio)!

FangOf course we are looking for companies with a healthy cashflow. Why don’t we revisit some of the FAANG companies?

 

(Photo by SarahRichterArt on Pixabay)

 

Amazon, Alphabet (still called GOOG at the stock exchange) and Apple seem to present an ideal set of candidates to follow for a couple of quarters! Let’s see if the results are interesting (I don’t know yet – first we have to visualise).

Google Chrome Logo(Photo by geralt on Pixabay)

 

 

Where do we start? Well, with the form Q10 and probably the period 2017 Q3 to 2018 Q3.iPad

Apple has a broken book-year and will publish the report on the third quarter of 2018 only at the end of January, so we will start with the other ones.

 

(Photo by FirmBee on Pixabay)

Amazon is earlier in the list than Alphabet (it’s G for GOOG is at the end of FAANG), so let’s start with Amazon.

Amazon Parrot

(Photo by alvaroas8a0 on Pixabay)  Sorry, wrong Amazon, but this picture is less boring.

Again, I had to collect data from the Q10 forms and I created a collage from the three important statements (Cash Flow, Income, Balance) for Q2 of 2018 as an example.

Q10 form numbers

The relevant numbers got a red square around them. The others are for checking purposes –  not used in the graph. I will try and generate a graph showing the three companies together for the next posts, adding them one by one.

For more information, please have a look at our other posts, our website (https://anrep3d.com) or our youtube-channel. Again, the free demo-package (zip) can be downloaded, unpacked in a folder and the .jar file can be started immediately. Our email-address is info@anrep3d.com On Twitter we are @AnRep3D and we do have a modest LinkedIn-page as well.

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Automotive 10 – Nissan added, 3D-graph completed

Just before the end of 2018 the all companies we promised are visible in the 3D-graph for automotive! I will try and be concise about the proces.

Nissan BladeGlider

Nissan BladeGlider (Photo by FranckinJapan on Pixabay)

 

 

 

Nissan has very neat annual reports, but the book-year is broken (April 1 to March 31), so again values for a year were taken for the bookyear covering the largest part. The annual report 2013 covers three quarters of 2012 and therefore provided the 2012 numbers. Then all values were in JPY. Converting to USD was done as before, using a site with exchange rates and picking the mid of the book-year (October 1 or closest available) for the P&L and the end of the book-year (March 31 or closest) for the balance. See previous post about PSA for more details.

Datsun 240 Z

Datsun 240Z (Photo by Toby_Parsons on Pixabay)

 

 

Nissan is not a small company, so I put it in between PSA and Ford. Then I decided to adjust the parameters and to reverse the years, by switching the order of the lines within each block. After all we’ve seen enough of the crisis and now it’s time to look forward, starting with the most recent years at the front of the graph. Below two screenshots of the 3D-graph are shown. Both are clickable –  double clicking will bring up the real 3D-graph in your web-browser.Front-view 3D-graph

Oblique view 3D-graph

On double-clicking, the 3D-graph will appear in your web-browser. There are several options to move graph: clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse at the same time will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

For more information, please have a look at our other posts, our website (https://anrep3d.com) or our youtube-channel. Download the free demo-package (zip) can be downloaded, unpack it in a folder and the .jar file can be started immediately. Our email-address is info@anrep3d.com

For now, I wish you a happy new year!

Nissan Navara

Datsun Navara (Photo by Tordinator on Pixabay)

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Automotive 8 – Renault

The previous post would have been the last one in the automotive series, but in the intermezzo we already promised to add Renault and Nissan, because of all the news about Carlos Ghosn. Renault has really nice annual reports, although the most recent years were a little bit comfusing as the consolidated financial information was in separate documents.

Yet it was easy to collect the data and put it in the standard format. The input-file holding the seven companies can be downloaded as a .txt file.

Renault Dauphine

Renault Dauphine (Photo by emkanicepic on Pixabay.com)

After adjusting the space between the “builings” (the graph becomes rather broad now, so the buildings have to be closer to each other) the input-file was processed and the output-file (a .htm file) could be observed in the web-browser. With all the details it is very hard to capture the real 3D-graph in a screenshot. This time we need a couple of them, from different directions. Here the overview is shown.

Overview 3D-graph Automotive 8

 

On double-clicking, the 3D-graph will appear in your web-browser. There are several options to move graph: clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse at the same time will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Yellow Renault 4 (Photo by emkanicepic on Pixabay.com)

If we take a closer look at the graph (the values are sorted according to the most recent revenue, to create a kind of amphitheatre in the graph), Renault is close to PSA and very similar, although it seems PSA suffered more from the crisis than Renault did. Renault shows six years of profit (green roofs), where PSA started out with losses (red roofs). Close-up of 3D graph aut.8

 

In 2012 the loss for PSA was even a heavy one as the red roof is a thick one.

close-up of 3D-graph aut.8

Neither PSA nor Renault is as large as companies like Ford, GM or VW. Combined however (adding the heights, the widths and the depths of their buildings to create a hypothetical RenaultPSA), the are as large as Ford or GM (financially speaking), but still nowhere near VW. Volkswagen is really large and despite of “dieselgate” too much pressure could make it the “Lehman of Europe”.

Renault Twizzy

Renault Twizzy (Photo by Hans on Pixabay.com)

 

 

 

 

Most automotive companies in the 3D-graph are doing rather well – even Tesla, being more of a challenger and a game-changer of course. Looking at the total liabilities (debt) to equity ratio, Renault is doing even better. To be able to see those ratios, the bottom view of the graph is taken.

Bottom view of 3D-graph Aut.8

We can see the ratio of width (equity) and depth (liabilities) easily. Only recent years are shown (for the full view double-click the screenshot and the 3D-graph will appear).

Ford (third from the right, after Volkswagen and General Motors) has a high liabilities-to-equity ratio (about 6). It is higher than GM and much higher than VW. Both Renault and PSA are more like VW.

Ratio-calculations

 

It is easy to derive all kinds of ratios from the input-file after importing it in a spreadsheet. Below an example of the exact Liability-to-Equity ratios (as already observed in the 3D-graph in a more intuitive way.

 

For more information, please have a look at our other posts, our website (https://anrep3d.com ) or our youtube-channel. Again, the free demo-package (zip) can be downloaded, unpacked in a folder and the .jar file can be started immediately. Our email-address is info@anrep3d.com

Renault Oldtimer

Renault Oldtimer (Photo by bernswaelz on Pixabay)

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Automotive 7 – Tesla

Tesla-time! By now you will know how the values (Revenue, [net] Profit, Equity and [total] Assets) will be extracted from the annual reports. One detail probably: it was rather hard to see how the shareholder’s equity was calculated. Like with Ford there was a separate amount for non-controlling interest, but here there was even another one. In the end I decided to take the difference between total assets and total liabilities as equity, instead of checking all the odd values. It doesn’t make a real difference anyway.

Then we have another issue: the acquisition of Solar City at the end of 2016. The influence is not really large and the other automotive companies have e.g. their financial services included, so actually none of the numbers in the graph are purely related to the manufacturing of cars. In the end the values we took the numbers as presented from the annual reports for all the companies (with some checks performed).

In this break I would have liked to put in a colourful picture of a Tesla, but it seems colourful Teslas are hard to find. Yet the picture is nice after all.

Woman sitting in Tesla (Photo by Taneli Lahtinen at Unsplash)

After increasing the number of companies, it was clear that Tesla should be even to the left of Mitsubishi Motors. Previously I called the latter a “dwarf” but how to classify Tesla, especially in 2012? A microbe? A germ cell? Perhaps a germ cell as it grew rapidly afterwards and from 2015 onwards it was more like Mitsubishi Motors (financially, that is). I really had to manipulate the graph (zoom, rotate, translate) for some time to be able to see the 2012 “building” for Tesla. The size of the year-label is an indication of how small the building actually is! For readers who haven’t seen the full graph yet, the screenshots are clickable (double-click)

Tesla in 3D-graph 2012

As already said Tesla grew rapidly and moving to the rear of the graph we can see 2015, 2016 and 2017. Tesla 2015-2017 in 3D-graphInteresting is that the red roof – indicating a loss – is much smaller for 2016 than it was for 2015.

The revenue goes up from year to year as the taller buildings in more recent years clearly show. Normally, the total height of the building is the revenue, and the yellow part represents the total costs, leaving the net profit which is represented by the green roof.

If the costs are higher than the revenue, the height of the building represents the costs. The yellow part is the revenue and the red area is the amount of money to be added to the revenue to cover the costs. In other words: a loss. If no new shares are issued, the equity will suffer from the loss and the building will be narrower than previous ones. Because Tesla was able to attract money from the market, the equity didn’t suffer in 2016. In 2017 however, the equity went down again. Now the waiting is for a green roof!

Tesla car in open field near wood

(Photo by Free-Photos on Pixabay)

If we zoom in even more, we can see Tesla is more like Mitsubishi Motors in the more recent years.

 

 

Tesla in 3D-graph detail

 

On double-clicking, the 3D-graph will appear in your web-browser. There are several options to move graph: clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse at the same time will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

For more information, please have a look at our other posts, our website (https://anrep3d.com ) or our youtube-channel. Again, the free demo-package (zip) can be downloaded, unpacked in a folder and the .jar file can be started immediately. Our email-address is info@anrep3d.com

(Photo by Michelles_Photography on Pixabay)Tesla car in front of Tesla office

 

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Automotive – Intermezzo

I know, I know, this should have been the post in which Tesla would have been added to the graph. Instead of Tesla I put in an intermezzo. I understand it’s a terrible disappointment for all Tesla-fans, waiting for a 3D-graph on the financial status of their favourite company (tongue in cheek). As a consolation I can tell them the Annual Reports have been processed and I am ready to add Tesla the next time (and the fact Tesla Motors being a “dwarf” – just like Mitsubishi Motors – will remain a secret for another week).

Tesla chargers (Photo by JamesQube on Pixabay)

 

Why an intermezzo then? Well, the news about Carlos Ghosn being arrested was all over the media and Ghosn is the CEO of Renault and Chairman of Nissan and Mitsubishi. Allegedly he was also the driving force behind the Nissan Leaf. Of course all kinds of conspiracy theories came up and at the same time there is a large grey area in which successful people operate, as remaining strictly within the boundaries of the law won’t bring success in most cases (for a person, that is – not for a company). This means an investigation will always bring up something.

(Photo by Capri23auto on Pixabay) Renault 4

 

However, this blog is about 3D visualisation of financial data (and energy, for that matter) and not about politics or ethics. It means we won’t discuss the person, but it’s a good reason to extend the automotive series with Renault and Nissan, to see how they went during the period 2012 -2017. Mitsubishi was already in our graph, by the way.

Nissan Figaro (Photo by Capri23auto on Pixabay)

The question is, why did I select the original series of GM, Ford, PSA, Volkswagen, Mitsubishi and Tesla? Well, I just wanted to have American, European and Asian companies in the graph and then Tesla too, as it is completely different. That’s from a financial point of view of course, as the Ford I drive was manufactured in Germany, the only thing about it being American is all the legal disclaimers popping up at different moments (and – in my previous Ford – dialling 911 instead of 112 automatically when it thought I would have a collision). Now, with the extension another European company will be added (Renault) and another one from Asia. At the same time these companies are well-known in Western Europe, whilst e.g. Geely, SsangYong and JiangLing (known for the Landwind) are very rare. Toyota, Kia and Hyundai are not, so maybe we should think about those manufacturers as well or add them later after another intermezzo.

(Photo by John Volante on Unsplash) Honda

 

 

 

That’s it for now. The graph below remains unchanged, but next time it will be updated again.

Five automotive companies in 3D-graph

On double-clicking, the 3D-graph will appear in your web-browser. There are several options to move graph: clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse at the same time will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

For more information, please have a look at our other posts, our website (https://anrep3d.com) or our youtube-channel. Again, the free demo-package (zip) can be downloaded, unpacked in a folder and the .jar file can be started immediately. Our email-address is info@anrep3d.com

Toyota SUV

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