Financial Statements |
2016 |
2015 |
2014 |
Total Equity |
$1075 |
$1376 |
$1334 |
Current Assets |
$5,380,636 |
$5,279,525 |
$18,891,137 |
Fixed Assets |
$320,750,485 |
$315,829,479 |
$245,691,848 |
Total Assets |
$342,212,110 |
$336,312,044 |
$264,657,154 |
Net Income |
$76,513 |
$85,375 |
$30,190,056 |
Amount Paid to Shareholders in Cash |
$12,341,213 |
$11,111,185 |
$9,898,166 |
Amount Paid to Shareholders in Stock Buybacks |
$421,915 |
$421,915 |
$421,915 |
Total Amount Distributed with Shareholders |
$123,834,128 |
$11,533,100 |
$10,320,081 |
Short Term Debt |
50 |
0 |
342 |
Long Term Debt |
643 |
349 |
349 |
Cash Flow Statement |
2015 ($) |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
Proceeds from the sale of investments |
540,473,533 |
Payments for the purchase of investments |
(653,026,793) |
Capital return on investments |
|
Dividends received |
8,761,126 |
Interest received |
2,035,499 |
Other income received |
13,950 |
Management fees paid |
(2,784,335) |
Performance fees paid |
(12,800) |
Brokerage expenses on share purchases |
(575,514) |
Interest paid |
(683,116) |
Dividends paid on shorts |
(242,449) |
Payments for administration expenses |
(707,717) |
Income tax paid |
(5,196,425) |
NET CASH USED IN OPERATING ACTIVITIES |
(111,945,041) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
Dividends paid |
(15,650,799) |
Proceeds from shares issued |
66,440,227 |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
50,789,428 |
NET (DECREASE)/ INCREASE IN CASH HELD |
(61,155,613) |
CASH AND CASH EQUIVALENTS AS AT BEGINNING OF THE FINANCIAL YEAR |
93,826,031 |
CASH AND CASH EQUIVALENTS AS AT END OF THE FINANCIAL YEAR |
32,670,418 |
Positive cash flow of Cadence that the company is increasing its liquid assets and using its increased cash flow in reinvesting in its business operations, providing a huge return to its shareholders, paying expenses and generate a safeguard against upcoming financial challenges (Cadence.com. 2016).
Market Value Added (MVA) of Cadence in the year 2014:
MVA+ Capital Invested = Market Value
MVA= $231,197,359- $137,735,570
= $93,461,789
Market Value Added (MVA) of Cadence in the year 2015:
MVA+ Capital Invested = Market Value
MVA= $302,996,147- $280,018,162
= $22,977,985
Market Value Added (MVA) of Cadence in the year 2016:
MVA+ Capital Invested = Market Value
MVA= $330,896,158- $290,210,184
= $40,685,974
From the MVA analysis, it was gathered that the MVA of Cadence has decreased in the year 2015 and then increased in the year 2016. Such increase is because of the reason that it is generating positive returns and having strong leadership along with sound governance (Frattini et al. 2013).
From the financial statement analysis, it was gathered that the company experiences positive ash flow in the year 2015. This is because of the reason that the company is increasing its liquid assets and using its increased cash flow in reinvesting in its business operations, providing a huge return to its shareholders, paying expenses and generates a safeguard against upcoming financial challenges (Golez 2014). Moreover, MVA analysis it was gathered that an increase in MVA of Cadence is for the reason that it is producing positive returns and maintaining strong corporate governance. Financial analysis over three years of the company revealed that the net income of the company has decreased over the past three years. Such decrease is because of the reason that its expenses have increased over the past three years. The company is dealing with increasing overhead costs, specially as the company increased the payment of long term employees ever year (Healy and Palepu 2012). Total assets of Cadence is observed to increase over the years from 2014 to 2016 because of the reason that it is not utilizing its assets efficiently in gaining maximum profits or has made increased investments in its assets hose are not contributing effectively to the bottom line.
Date |
Price |
Return |
Dividend |
Return of dividend |
7/1/2016 |
9.522239 |
3.02% |
||
6/1/2016 |
9.243052 |
0.00% |
||
5/4/2016 |
0.03 |
-3% |
||
5/2/2016 |
9.243052 |
-16.77% |
||
4/1/2016 |
11.105247 |
16.60% |
||
3/1/2016 |
9.524464 |
7.28% |
||
2/3/2016 |
0.03 |
-14% |
||
2/1/2016 |
8.878232 |
23.03% |
||
1/4/2016 |
7.216544 |
-26.14% |
||
12/1/2015 |
9.770547 |
5.45% |
||
11/4/2015 |
0.03 |
36% |
||
11/2/2015 |
9.265686 |
5.15% |
||
10/1/2015 |
8.811746 |
-7.56% |
||
9/1/2015 |
9.532079 |
2.22% |
||
8/5/2015 |
0.03 |
9% |
||
8/3/2015 |
9.32486 |
-3.96% |
||
7/1/2015 |
9.709269 |
-11.48% |
||
6/1/2015 |
10.968424 |
-10.80% |
||
5/7/2015 |
0.03 |
13% |
||
5/1/2015 |
12.29644 |
-6.65% |
||
4/1/2015 |
13.172549 |
3.87% |
||
3/2/2015 |
12.681769 |
-12.64% |
||
2/4/2015 |
0.03 |
-3% |
||
2/2/2015 |
14.517288 |
-5.32% |
||
1/2/2015 |
15.333686 |
-0.89% |
||
12/1/2014 |
15.470857 |
-8.68% |
||
11/5/2014 |
0.03 |
1% |
||
11/3/2014 |
16.94054 |
3.35% |
||
10/1/2014 |
16.391502 |
4.16% |
||
9/2/2014 |
15.736234 |
-3.13% |
||
8/6/2014 |
0.03 |
-4% |
||
8/1/2014 |
16.244801 |
1.53% |
||
7/1/2014 |
16.000385 |
10.07% |
||
6/2/2014 |
14.536044 |
9.40% |
||
5/8/2014 |
0.03 |
-9% |
||
5/1/2014 |
13.28647 |
1.27% |
||
4/1/2014 |
13.120182 |
4.66% |
||
3/3/2014 |
12.535764 |
9.63% |
||
2/5/2014 |
0.03 |
-4% |
||
2/3/2014 |
11.43511 |
2.27% |
||
1/2/2014 |
11.18171 |
8.28% |
||
12/2/2013 |
10.326809 |
10.61% |
||
11/6/2013 |
0.03 |
-7% |
||
11/1/2013 |
9.335901 |
3.99% |
||
10/1/2013 |
8.977975 |
14.16% |
||
9/3/2013 |
7.864202 |
5.45% |
||
8/7/2013 |
0.03 |
-12% |
||
8/1/2013 |
7.457433 |
-2.78% |
||
7/1/2013 |
7.670355 |
1.66% |
||
6/3/2013 |
7.544929 |
-8.00% |
||
5/9/2013 |
0.03 |
-1% |
||
5/1/2013 |
8.201009 |
0.34% |
||
4/1/2013 |
8.173272 |
-0.23% |
||
3/1/2013 |
8.192504 |
0.00% |
||
2/6/2013 |
0.03 |
1% |
||
2/1/2013 |
8.192504 |
-3.30% |
||
1/2/2013 |
8.471679 |
1.84% |
||
12/3/2012 |
8.318345 |
3.21% |
||
11/1/2012 |
8.059594 |
-1.87% |
||
10/31/2012 |
0.03 |
-3% |
||
10/1/2012 |
8.212928 |
-2.94% |
||
9/4/2012 |
8.461397 |
3.50% |
||
8/1/2012 |
0.03 |
3% |
||
8/1/2012 |
8.174894 |
1.42% |
||
7/2/2012 |
8.060293 |
-3.20% |
||
6/1/2012 |
8.326749 |
2.34% |
||
5/10/2012 |
0.03 |
4% |
||
5/1/2012 |
8.136423 |
-11.84% |
||
4/2/2012 |
9.228986 |
-2.89% |
||
3/1/2012 |
9.504054 |
-1.47% |
||
2/1/2012 |
0.03 |
3% |
||
2/1/2012 |
9.64633 |
0.39% |
||
1/3/2012 |
9.608389 |
17.46% |
||
12/1/2011 |
8.18037 |
-13.67% |
||
11/2/2011 |
0.03 |
-15% |
||
11/1/2011 |
9.475991 |
-6.61% |
||
10/3/2011 |
10.146461 |
12.43% |
||
9/1/2011 |
9.024315 |
-25.23% |
||
8/3/2011 |
0.03 |
-11% |
||
8/1/2011 |
12.07014 |
-12.92% |
||
7/1/2011 |
13.860662 |
-7.12% |
||
6/1/2011 |
14.923971 |
-5.65% |
||
5/12/2011 |
0.03 |
8% |
||
5/2/2011 |
15.817904 |
-0.94% |
||
4/1/2011 |
15.968544 |
-3.74% |
||
3/1/2011 |
16.588499 |
4.81% |
||
2/2/2011 |
0.03 |
4% |
||
2/1/2011 |
15.827645 |
1.87% |
||
1/3/2011 |
15.537673 |
7.67% |
||
12/1/2010 |
14.43119 |
17.21% |
||
11/3/2010 |
0.03 |
-7% |
||
11/1/2010 |
12.311989 |
0.15% |
||
10/1/2010 |
12.293448 |
8.51% |
||
9/1/2010 |
11.329805 |
18.49% |
||
8/4/2010 |
0.03 |
-8% |
||
8/2/2010 |
9.561571 |
-8.27% |
||
7/1/2010 |
10.423245 |
11.03% |
||
6/1/2010 |
9.387453 |
-13.57% |
||
5/5/2010 |
0.03 |
-10% |
||
5/3/2010 |
10.861825 |
-13.12% |
||
4/1/2010 |
12.502271 |
-5.69% |
||
3/1/2010 |
13.256317 |
7.07% |
||
2/3/2010 |
0.03 |
6% |
||
2/1/2010 |
12.381251 |
4.71% |
||
1/4/2010 |
11.824618 |
-21.03% |
||
12/1/2009 |
14.973516 |
28.75% |
||
11/4/2009 |
0.03 |
27% |
||
11/2/2009 |
11.629555 |
1.04% |
||
10/1/2009 |
11.509328 |
-5.34% |
||
9/1/2009 |
12.158002 |
8.88% |
||
8/5/2009 |
0.03 |
6% |
||
8/3/2009 |
11.166458 |
2.71% |
||
7/1/2009 |
10.872259 |
13.84% |
||
6/1/2009 |
9.550207 |
12.04% |
||
5/6/2009 |
0.03 |
-12% |
||
5/1/2009 |
8.523999 |
1.96% |
||
4/1/2009 |
8.360489 |
23.57% |
||
3/2/2009 |
6.765821 |
17.82% |
||
2/4/2009 |
0.17 |
-17% |
||
2/2/2009 |
5.742651 |
-18.30% |
||
1/2/2009 |
7.02879 |
-30.82% |
||
12/1/2008 |
10.159715 |
4.65% |
||
11/5/2008 |
0.17 |
47% |
||
11/3/2008 |
9.708572 |
-5.14% |
||
10/1/2008 |
10.234806 |
-49.07% |
||
9/2/2008 |
20.095819 |
-29.72% |
||
8/6/2008 |
0.17 |
98% |
||
8/1/2008 |
28.595158 |
-4.29% |
||
7/1/2008 |
29.876507 |
-5.25% |
||
6/2/2008 |
31.531885 |
-12.24% |
||
5/1/2008 |
35.93148 |
16.71% |
||
4/30/2008 |
0.17 |
14% |
||
4/1/2008 |
30.788292 |
-3.07% |
||
3/3/2008 |
31.764774 |
-2.91% |
||
2/6/2008 |
0.17 |
4% |
||
2/1/2008 |
32.716129 |
12.83% |
||
1/2/2008 |
28.996864 |
-9.47% |
||
12/3/2007 |
32.028873 |
0.49% |
||
11/1/2007 |
31.871138 |
-8.13% |
||
10/31/2007 |
0.17 |
0% |
||
10/1/2007 |
34.692833 |
1.64% |
||
9/4/2007 |
34.132946 |
7.09% |
||
8/1/2007 |
0.17 |
-1% |
||
8/1/2007 |
31.873121 |
-3.94% |
||
7/2/2007 |
33.1819 |
-5.75% |
||
6/1/2007 |
35.205822 |
-1.82% |
||
5/2/2007 |
0.17 |
7% |
||
5/1/2007 |
35.8573 |
16.89% |
||
4/2/2007 |
30.67713 |
4.69% |
||
3/1/2007 |
29.302752 |
1.47% |
||
2/1/2007 |
28.8792 |
3.44% |
||
1/31/2007 |
0.17 |
-1% |
||
1/3/2007 |
27.919729 |
8.20% |
||
12/21/2006 |
0.15 |
-3% |
||
12/1/2006 |
25.803797 |
-3.24% |
||
11/1/2016 |
0.15 |
-7% |
||
11/1/2006 |
26.667381 |
8.38% |
||
10/2/2006 |
24.605515 |
3.10% |
||
9/1/2006 |
23.865053 |
-1.92% |
||
8/2/2006 |
0.15 |
-2% |
||
8/1/2006 |
24.33316 |
-4.05% |
||
7/3/2006 |
25.360125 |
|||
Rate of return |
-0.11% |
|
|
3% |
Type of Debts |
Cost of Debts |
Amount |
Weight |
Tax Rate |
E/V |
D/V |
Common Stock |
0.00% |
1391 |
12.99% |
35.00% |
15% |
85% |
preferred stock |
3.75% |
58 |
0.54% |
|||
Commercial Paper |
0.60% |
198 |
1.85% |
|||
Debt Capital |
1.61% |
9065 |
84.62% |
|||
Total |
|
10712 |
100% |
|
||
|
|
|
|
|
||
WACC |
2% |
The essay is indented to conduct an evaluation on Alcoa stock and computation regarding return rate of the company’s stock is done from July 1, 2006, to July 1, 2016. By taking into account the gathered information from Yahoo Finance, calculation for return rate has been conducted and a negative figure is found with 0.11% (Dumont and Schmit 2013). On the other hand, after consideration of the holding period return initiative that encompasses dividend in computation and the figure is found to be 3% that is positive. Regarding computation, it can be stated that technique of holding period return is an advantageous strategy for obtaining increased return. After computation of weighted average cost of capital that is computed through extracting current information of the company and corporate tax rate taken into regard is 35% as per the US Federal rate. WACC is deemed 2% that is reasonable (Alcoa.com. 2016).
Based on public source, the Acola split news has been famous and it is also deemed that it might further split within publically trading organization. This was acknowledged to be a legacy in aluminum operation and diversification within automotive industry. The organization has attained increased growth through its titanium and aluminum manufacture and from aerospace industry. As mentioned by Aloca’s CEO, it was the appropriate time for attaining split. The company’s business division has attained a superior position and strategy for an organization attaining increased profit and revenue. After the split up of the company, it might add 40% of its profits within the sectors of Alcoa's Aerospace, automotive and transportation and in building construction. After the organization’s decision of splitting Aloca’s shareholders might attain 80.1% shares in fresh shares (Chauhan and Singh 2014). Aloca might acquire 85% of the organization’s shareholding worth $9 billion in the debt form by offering support to Alcoa’s existence within aluminum sector. Such split might facilitate the company in boosting anticipated trading price of a common stock, which further can support in enhancing the company’s liquidity position.
After evaluating the financial situation of Alcoa’s stock, it is gathered that the organization might earn increased profit after the split in two different organizations. Moreover, it was also gathered that recently the organization has authorized shares worth 1.8 billion (Davis and Haegler 2016). Within this division, Aloca will consider the specialty of value added offerings made of aluminum. Conversely, the company’s another division is focused on automotive and aerospace and the transportation industry in attempt to attain increased return and revenue.
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