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Financial

Analysis
- Group I -

2015

Jonas Vagnoux, Kasra Salarian, Timo Kniepkamp, Sergei Munier

Outline
PART 1: CONTEXT FOR THE ANALYSIS
1) Short Overview
2) SWOT
3) Context of the analysis
PART 2: FINANCIAL STRUCTURE
1) General Financial Situation of Texas Instruments
2) Net debt
3) Working capital
4) Working capital analysis
5) Capital employed and Invested Capital

Pages 1-2

Pages 3-7

PART 3: TREND ANALYSIS AND COMPARATIVE ANALYSIS Pages 7-14


1) Solvency
2) Debt
3) Growth
4) Liquidity
5) Profitability
6) Analysis of return
7) Efficiency
PART 4: FINANCIAL CASH FLOW
1) Cash flow from operating activities
2) Cash flow from investment activities
3) Cash flow from financing activities

Pages 14-16

PART 5: STUDY OF STOCK QUOTES


1) Measuring return
2) Measuring risks
3) CPAM: Beta & standard deviation

Pages 16-18

CONCLUSION AND RECOMMENDATIONS

Page 19

Appendices

Pages 20-32

Bibliography

Page 33

Part I: Texas Instrument Short Overview


Company Background: Texas Instruments Inc. (also referred to as TI) is an American
electronics company focused on the design and manufacture of semiconductors. TI
mainly sells to electronics designers and manufacturers worldwide. Headquartered in
Dallas, Texas, United States, Texas Instruments has become the third largest maker of
semiconductors globally after Intel and Samsung; it is second in place as the largest
supplier of chips for cellular devices after Qualcomm, and the largest producer of DSPs
or digital signal processors and analog semiconductors.
Key Facts:

Operating in 35 countries

Serving more than 100,000 customers worldwide

Innovating for nearly 85 years

More than 100,000 analog ICs and embedded processors, along with software
and tools

Industrys largest sales and support staff

Publicly Trade on the NASDAQ: TXN


TIs technology is involved in most electronic sectors. They focus on developing analog
chips and embedded processors, which account for approximately 80% of their revenue.
Since most devices require an analog chip and some even an embedded chip, TI has been
a moving figure in the electronic component industry. TI also produces DLP (Digital
Light Processing) technology, which powers a range of displays and advanced light
control application spanning industrial, enterprise, automotive and consumer market
segments (including projectors and cinema equipment). Most of all TI is also known for
making high-quality calculators for most educational domains and non-educational
purposes.
Part I: Texas Instrument: Context Overview
SWOT Analysis:
External Analysis
Opportunities
1. Growing the global semiconductor
market

Threats
1. Economic slowdown in US and
Eurozone

2.Presence in mobile processors which is


new growth segment in developing
countries

2. Environmental regulations
3.Exchange rate fluctuations

3. Demand for analog semiconductors


Internal Analysis
Strengths

Weaknesses

1.Strong Market Position

1.Dependence on third party contractors

2. R&D capabilities

2. Competitive sector

3. Expansion into growing countries

3. More of a supplier than end retailer

4. Company has worldwide presence and


customer base of around 100,000
customers.
5. TI has a great brand name among college
graduates which helps them attract the best
talent

Context Analysis:
According to the Income statement from 2006 towards 2015, the company has been
stable other than during the 2008 recession period where it went from approximately 50%
gross profit to 38% gross profit and returned back to its stable point where it got back to
50% gross profit and later on during the 2013-2015 years rose to a strong 58% gross
profit.
The initial goal for this analysis is to gain enough information on the entire company
operations and its outcomes over the past few years, and to reach a consensus on whether
we would want to invest in the company or not.
The International Market: Currently Intel Corp dominates the market, with a market
share of 15,7% with Samsung Electronics right behind it at 10,1% market share and
Qualcomm and Texas Instruments in proximity of each other at 4,3% and 4,0%
respectively. Interestingly enough 3 of the top 4 semiconductor manufacturers are from
the United States. With such a tight market, Texas Instruments is in need of gaining some
market share and, with talks of a merger it may be the solution.
Texas Instruments Future: Texas Instruments had recently acquired in 2011, National
Semiconductor Corp. and hence why it had been absent from the years merger spree.
With its extension in leadership it had been dominating the market so far till Qualcomm
increased its market share and now TI is left with lower market share and less customer
reach. Although, there has been recent talks of Texas Instruments expansion plans by

merging with Maxim Integrated, which would slingshot TI into a much stronger market
position.
In order to diagnosis the company, we will need to evaluate the performance of the
company to determine our financial decision.
In essence we ask ourselves: Is Texas Instruments doing well or is it facing financial
problems?
Part II: Financial Structure
1. General Financial Situation of Texas Instruments
From an investors point of view it is quite important to have a look at the financial
structure of a company, as the mixture of debt and equity directly appeals to the
companys value and risk potential.
16,000.0
14,000.0
12,000.0
10,000.0
Net Sales

8,000.0

EBITDA
Net Income

6,000.0
4,000.0
2,000.0
0.0
2010.0

2011.0

2012.0

2013.0

2014.0

in Million USD

The sales of Texas instrument decreased between 2010 and 2013 by 5%, and increased in
2014 by 7%. This trend has affected the EBITDA, because it decreased by 4% until 2013
but the increase in 2014 has been much stronger. EBITDA grew by 38% in 2014. The Net
income did not decrease over the last 3 years. It has strongly grown. 23% of growth in
2013 and 30% in 2014, meanwhile the sales did not grow as fast, it means that Texas
Instrument enhance its situation.
The negative growth of sales and EBITDA in 2013 can also be explained by an
augmentation of the operating expenses of the company. The operating expenses grew by
3% in 2013, and it is mostly due to the rise of the advertising expenses. The huge drop of
the operating expenses can explain the strong growth of the EBITDA in 2014 over this
year. It fell by 13%. This explains also why the EBITDA growth is much more important
than the sales growth. We can say that, even if Texas Instrument has reduced its Research
and development expenses, and its advertising expenses, TI managed to obtain a growth
of the sales, which is a very good sign for the firm, it means that the company enjoys a
strong position on its market.

R&Dexpenses
2 000,0

Expenses

1 500,0
1 000,0
500,0
0,0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Financial Years

Expenses

Advertising expenses
2 000,0
1 800,0
1 600,0
1 400,0
1 200,0
1 000,0
800,0
600,0
400,0
200,0
0,0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Financial Years

2. Net Debt Situation


2010
-336

2011
6435

2012
5714

2013
4757

2014
4472

Net debt is defined as the difference between medium/long term borrowings and net
treasury. It shows if the company is able to pay back all its long-term liabilities.
Texas Instruments was only in 2010 able to pay back everything. After a huge increase in
2011 it decreases, but in 2014 (increase by 6%) TI is still unable to serve all its debts.
One reason for the increase of Net Debt in 2011 might be the overtaking of National
Semiconductor (a competitor of TI) on 23rd September this year for 6,5 MRD USD.
If this is the case it means that the Net Debt situation is not too dramatic and as the trend
is improving TI might theoretically be able to pay back all its medium/long term
borrowings in a few years.
3. Working Capital & Working Capital Analysis
Working Capital (in million USD):
2010
2011
Current Asset 7.060
7.828
- Current
1.981
3.499
Liabilities
- Net
1.319
-389
Treasury
= Working
3.760
4.718
Capital

2012
8.230
3.430

2013
8.019
2.747

2014
7.768
2.662

-84

627

198

4.884

4.645

4.908

Working Capital is equal to the need of liquidity of a company. It is defined as the cash
situated in the operating cycle, such as account receivables or inventories.
As the Working Capital of TI is constantly positive, TI is able to pay back all its shortterm liabilities.
Optimizing the Working capital means reducing it to a minimum. Therefore TI should

minimize the Accounts Receivable/Inventories and maximize the Accounts Payable for
example. This is obviously not the case as the working capital of TI is increasing over the
last five years. This increasing is a negative sign; therefore TI should start reducing it.
To explain it we can say that the current liabilities of the company decreased between
2012 and 2014, which has contributed to increase the working capital.
But more generally, to decrease the working capital issue, a firm can act on the inventory.
If the inventories decrease, if the accounts payable decrease, or if the accounts receivable
increase, the working capital decrease.
Actually, the inventory decreased by 1% in 2013 and increased by 3% in 2014, so they
nearly stayed stable over the past 3 years, but they have risen a bit. The same for accounts
receivable, they decreased by 2% before increased by 4% in 2014, so they also increased
a little. For the accounts payables, they decreased by 5% in 2013 and increased by 4% in
2014, so globally accounts payables decreased between 2012 and 2014. All these factors
explained why the working capital has a negative trend.
The working capital is constantly positive which is typical for an industrial enterprise as
TI.
Operating Working Capital:
Working Capital on Sales
Working
Capital
/ Annual
Sales
= Working
Capital on
Sales

2010
3.760

2011
4.718

2012
4.884

2013
4.645

2014
4.908

13.966

13.735

12.825

12.205

13.045

0,27

0,34

0,38

0,38

0,38

The Working Capital on Sales represents the percentage of the annual sales stuck into
customer receivables and in inventories, which are not financed by a supplier credit.
The figures show that since 2011 the working capital on sales is remarkably stable.
Working capital always represents the same percentage of the annual sales. It is a positive
sign for company, it means that the company is very stable and can predict easily its
future needs of working capital. It also means that the firm doesnt have to raise
additional debt to finance its sales.
Working Capital Turnover Ratios
Days/receivables:
Total Receivables

2010
1.518

2011
1.545

2012
1.230

2013
1.203

2014
1.246

/ Annual Sales
(*365) = Days sales
outstanding

13.966
40

13.735
41

12.825
35

12.205
36

13.045
35

This represents the amount of time needed to collect revenue after a sale. Again, the ratio
is stable. It increased in 2013 and decreased in 2014, so the trend is that customer pays
more rapidly Texas Instrument, this is a positive sign for the company.
Days/payables:
Total Payables
/ Annual Purchases
(COGS)
(*365) = number of days
of payables

2010
621
6486

2011
625
6795

2012
444
6436

2013
422
5841

2014
437
5618

35

34

25

26

28

The number of days payables represent the time Texas Instrument takes to pays its
suppliers. The ratio is deteriorating since 2012; the firm needs 3 more days to pay its
suppliers.
Days/inventories:
Inventories and work in
progress
/ Annual Sales
(*365) = number of days
of inventory

2010
1.520

2011
1.788

2012
1.757

2013
1.731

2014
1.784

13.966
40

13.735
48

12.825
50

12.205
52

13.045
50

The number of days of inventory represents the number of days of inventory the company
held. It increased from 2010 to 2013 and decreased in 2014. So the trend is positive.
4. Capital Employed Analysis
Capital Employed:
Non Current Assets
+ Working Capital
= Capital Employed

2010
6.341
3.760
10.101

2011
12.669
4.718
17.387

2012
11.791
4.884
16.675

2013
10.919
4.645
15.564

2014
9.954
4.908
14.862

2010
10.437

2011
10.952

2012
10.961

2013
10.807

2014
10.390

Invested Capital:
Equity

+ Net Debt
= Invested Capital

- 336
10.101

6.435
17.387

5.714
16.675

4.757
15.564

4.472
14.862

The capital employed analysis could be treated as a restatement of the balance sheet
(capital employed has to be equal to invested capital). While capital employed (uses of
funds) is the sum of Non Current Asset and Working Capital, Invested Capital (sources of
funds) is the sum of Equity and Net Debt.
The capital employed of TI decreased since 2011. This can be explained by the
decreasing of the non current assets, but it also can be explained by the decreasing of the
net debt since 2012.

Part 3: Trend Analysis and Comparative Analysis


1-Solvency:
Solvency ratio: (After tax net profit + Depreciation)/ (LT liabilities + ST liabilities)
2011
2012
2013
2014
After tax net
2236
1759
2162
2821
profit
Depreciation
1015
1299
1297
1230
LT liabilities
6046
5630
5384
4670
ST liabilities
3499
3430
2747
2662
Solvency ratio
34%
34%
43%
55%
The solvency ratio measures the ability of a firm to cover its debt and obligations. The
solvency ratio should be higher than 20%. The solvency ratio is above 20%, so the
company is healthy, and can stay solvent. This is an important figure for lenders.
2-Debt
A) Debt to equity ratio: Total Liabilities / Total equity
Figures from Bloomberg for Texas Instrument
2011
2012
2013
2014
Total Liabilities 9 545,0
9 060,0
8 131,0
7 332,0
Total Equity
10952
10961
10807
10390
Debt to equity
0.87
0.83
0.75
0.71
The debt to equity ratio helps to compare the total debt of a firm and its total equity. The
total debt of Texas Instrument is quite low in comparison to the equity; the firm doesnt
use much debt financing. The critical level for debt to equity is 2, a company should have
a ratio lower than 2. The lower this ratio is, the more trust it gives to investors, because it
gives more security for them. So borrowing money is not a problem for Texas Instrument.
2011 2012 2013 2014
Intel debt 0.55 0.65 0.59 0.62
to equity
Qualcom
0.35 0.28 0.26 0.24
m debt to
equity

Moreover, the debt to equity is decreasing since 2011, so its a positive trend for the
company. Regarding the competitors, they are doing even better than Texas Instrument.
Especially Qualcomm has a very low debt to equity ratio. So TI can improve its debt to
equity ratio, but still, the situation is very positive.
B) Debt to EBITDA: Total debt / EBITDA
Figures from Bloomberg for Texas Instruments
2011
2012
2013
2014
Total debt
2657
1721
1329
1101
EBITDA
4427
4097
3947
5452
Debt to
0.6
0.4
0.3
0.2
EBITDA
This ratio helps to know how many years a company needs to repay its debt. The critical
value for this ratio is 4, and the lower the ratio is, the better for the company. For TI, the
ratio is largely below the critical value, and is close to 0. Moreover, the trend is good for
the company, because the ratio decreased since 2011.
2011
2012
2013
2014
Intel debt to EBITDA 0.34
0.41
0.63
0.31
Qualcomm debt to
3.14
4.02
3.43
3.22
EBITDA
Regarding the competitors, TI has the best ratio. Qualcomm is close to the critical level.
So finally, from these ratios, we can say that the profitability of Texas Instrument is very
good.
3- Growth
Texas Instrument:
EBITDA
Revenue

2011
4427
13735

2012
4097
12825

2013
3947
12205

2014
5452
13045

Intel:
EBITDA
Revenue

2011
23 541
53 999

2012
22 160
53 341

2013
20 323
52 708

2014
23 896
55 870

Qualcomm:
2011
2012
2013
2014
EBITDA
6 087
6 579
8 247
8 700
Revenue
14 957
19 121
24 866
26 487
In order to study the growth of a company, it can be useful to compare the evolution of
the EBITDA with the Revenue. Revenues decreased between 2011 and 2013, and
increased in 2014. The EBITDA had the same trend over the period, but the increase of
the EBITDA has been stronger. What we can notice is that Intel had the same trend for its
revenues and EBITDA, a negative growth until 2013, and positive in 2014. So the

decreasing can come from external factors that have affected the market. Qualcomms
revenue tough increased until 2013, and dropped in 2014.
4) Liquidity: The liquidity analysis helps us to know the relation between debts and
equity. We will try to answer this question: does the company as enough liquidity to pay
back the debt? We have used the balance sheet to have the right numbers.
Current ratio: Current assets / Current liabilities
The current ratio measures the short-term liquidity (less than 1 year time) and the ability
to pay short-term commitments. The current ratio needs to be a value higher than 1. In
our data, we notice a growth between the 2011 through 2013 fiscal years whereas in 2013
and 2014 it remained the same value. The higher the current ratio, the more capable the
company is of paying its short-term liabilities (debt and payables) and assets (cash,
inventory, receivables). Then we can interpret that the company is getting more liquid as
an asset is liquid the quicker it can be converted in cash. The non-current assets of the
firm are not financed by negative working capital or by short-term borrowings.
Year
Current assets
Current liabilities
TI current ratio
Intel current ratio
Qualcomm
current ratio

2011
7828
3499
2,24
2,2
2,70

2012
8230
3430
2,40
2,4
3

2013
8019
2747
2,92
2,4
3.8

2014
7768
2662
2,92
1,7
3,7

Qualcomm has increased its current ratio each year between 2011 till 2013 (inclusive).
This is a good indication, since it shows that the company is efficient in its operating
cycle. And with this being said, the results shown are much higher than those of TI. The
current ratios for Intel were very similar to TI for the fiscal years between 2011-2012
which suggest TIs gaining market share faster than Intel can keep up with, and as of
2014 Intel has been getting really close to 1 which is a bad indicator because under 1
suggests that the company would be not able to pay off its dues. Year after year TI is
staying above Intel with its ratio, which suggests Intel is having financial struggles.
Acid Test Ratio: (Current assets Inventories) / Current liabilities
As a result of the acid test ratio, we can verify that TI has enough short-term assets to
handle its immediate liabilities without the need to sell any inventory. This indicator is
more compelling to us than the working capital ratio because it also involves the
inventory assets. The quick ratio should be lower than the current ratio. That is the case
for all companies from 2011 through 2014.
Year
Current assets
Inventories

2011
7828
1788

2012
8230
1757

2013
8019
1731

2014
7768
1784

Current liabilities
TI acid test ratio
Intel acid test ratio

3499
1,73%
1,81%

3430
1,89%
2,06%

2747
2,29%
2,06%

2662
2,25%
1,46%

Qualcomm acid
test ratio

2,56%

2,76%

3,50%

3,48%

Over the period of 2011-2012 TI was struggling to keep up with the competition, yet it
kept its quick ratio above 1, which means it still remained stable. In 2012 and 2013, the
company reaching a better position as it increases its quick ratio slowly and also it is
starting to get above Intel. Over the 2011 through 2013 fiscal years, Intel was staying
strong but in 2014 it plummeted heavily. Its ratio is slowly reaching 1. This means that
they are close to being unable to pay their current liabilities and should heavily analyzed
with caution before any further action. Qualcomm currently has the best quick ratios,
which puts them on top.
5) Profitability
We utilize the margin analysis for a trend analysis based on the examination of the
revenues and charges. Margin trends are use for strategic position and risk profile of the
firms. Profitability is the main objective of a company and without it the company can
survive until it runs out of funds. To measure a margin, we will always use sales as the
denominator.
Year
2011
2012
2013
2014
EBITDA
4427
4097
3947
5452
Revenue
13735
12825
12205
13045
TI EBITDA
32,23%
31,95%
32,34%
39,69%
margin

EBITDA margin: (EBITDA / Revenue) x 100


EBITDA margin is a very useful measure of calculation, which aids us in the analysis of
the firms ability to make money. It is why its such an important tool. The EBITDA
margin has increased from 2012 through 2014 (+56%). The company is doing very well
and is generating profits, revenues and cash flows. Investors are looking at operating
profitability as a measure of performance. This can help them to compare companies.
B) Gross margin: Gross profit / Revenue x 100
Gross profit
Revenue
TI Gross
Margin

2011
6940
13735
50,52%

2012
6389
12825
49,82%

2013
6364
12205
52,14%

2014
7427
13045
56,93%

The ratios of the gross margin are quite high. This means that Texas Instruments has used
a great strategy to reach the highest margin in this period. These numbers explain the
proportion of each dollar of revenue that TI retains as gross profit. In this case, in 2014,
TI has retained 0,57 dollars of revenue to go towards selling, general and administrative
expenses, a portion to be distributed to shareholders through dividends and the remaining
profits go to retained earnings.
Operating Margin: (Operating Income / Revenue) x 100
Year
2011
2012
2013

2014

Operating
Income

3412

2798

2650

4222

Revenue

13735

12825

12205

13045

TI Operating
Margin

24,84%

21,82%

21,71%

32,36%

Operating margin measures what proportion of TIs revenue remains after paying out the
variable costs of production (wages, raw materials etc.). As you can see there is an
increase of the operating margin after the 2012 fiscal year. This is explained thanks to an
increase of earnings per dollars of sales. The higher the ratio, the better the companys
operating performance.
Year
2011
2012
2013
Intel
43,95%
41,54%
39,01%
EBITDA margin
Qualcomm
42,09%
34,81%
34,45%
EBITDA margin
Intel Gross Margin
62,51%
62,15%
59,80%
Qualcomm
67,39%
62,89%
60.51%
Gross Margin
Intel
32.72%
27.44%
23.77%
Operating Margin
Qualcomm
34,99%
30,12%
30,36%
Operating Margin
The two companies have a better EBITDA margin than Texas Instruments during the
2011 to 2012 fiscal years, after 2012 Intel maintains the highest EBITDA. The two
competing companies have a higher gross margin than Texas Instruments. TI has the
lowest operating margin; which we can infer that the company does not have a lot of
money left to pay its fixed debt.
6) Analysis of return
Financial leverage: Net debts / Shareholders equity

2014
43,30%
37,49%
63,74%
59,66%
28.00%
33,15%

Year
Net debt
Shareholder equity
TI financial
leverage
Intel financial
leverage
Qualcomm
financial leverage

2011
2657
10,952
24,26%

2012
1721
10,961
15,70%

2013
1329
10,807
12,30%

2014
1101
10,390
10,60%

-17,57%

-17,85%

-22,08%

-13,10%

-73,22%

-79,82%

-81,44%

-81,76%

The leverage effect explains a companys return on equity in regards to its return on
capital employed and its cost of debt. When the financial leverage value is negative, it
means that the company has a lot of cash and only uses its equity to finance the company.
In the case of Qualcomm and Intel, it is seen how much of their equity is used to finance
their company, mostly in Qualcomms case. They should improve their debt to invest and
to improve their sales. If the companies raise debt and invest the borrowed funds it will
generate profit.
Year
2011
2012
2013
2014
Net income
2236
1759
2162
2821
Shareholder equity
10 952
10 961
10 807
10 390
TI ROE
20,42%
16,05%
20,00%
27,15%
Intel ROE
0.28
0.21
0.17
0.21
Qualcomm ROE
0.16
0.18
0.19
0.20
Return on equity (ROE): Net income / Shareholders equity
Return on equity measures the ability of a firm to generate profits from its shareholders
investments in the company. ROE usually needs to be higher than 10%; at this point
shareholders can consider it a good investment. TI didnt use the investors funds
correctly till end of 2012, where an increase in the ROE was visible in the 2013 fiscal
year. There has been an increase in ROE; which means that they have been using the
investors money effectively over the past 2 years.
Return on capital employed (ROCE): Operating profit after tax / Capital employed
Year
2011
2012
2013
2014
Operating profit
after tax
2582
2544
2080
3074
Capital employed 17387
16675
15564
14862
TI ROCE
14,85%
Intel ROCE
28,90%
Qualcomm ROCE 0.20

15,26%
20,21%
0.18

13,36%
16,21%
0.25

20,68%
18,25%
0.30

Return on capital employed includes debts and other liabilities; we reach an


understanding of how the capital is employed. In general, it is more favorable when the

ROCE is high because it means that more dollars of profits are generated by each dollars
of capital employed. We can notice many fluctuations in the ROCE of Texas Instruments,
which means misuse of investments and capital until year 2014, where they reach a better
return on the capital employed.
7-Efficiency
Texas Instruments:
Account receivableturnover
Inventoryturnover
Accountspayableturnover

2010
9,20
9,19
10,44

2011
8,89
7,68
10,87

2012
10,43
7,30
14,50

2013
10,15
7,05
13,84

2014
10,47
7,31
12,86

A) Account receivable turn over: Sales / Account receivables


This ratio measures the efficiency of the use of the firms assets. The turn over is quite
stable over this period. What we can say is that Texas Instrument easily collect money
from its customer, because the ratio is high. It is a good sign for the company, because it
means that the firm can have more cash available.
B) Inventory turn over: Sales / Total inventory
This ratio measures the number of times the company sells its inventory during a year. It
is preferable for a company to have a high inventory turn over, because it means that the
company is able to manage well its inventory. Texas Instrument lost 2 points in this
turnover in 2011, so the ratio has decreased. Since 2011, the ratio is really stable. But as it
was higher in 2011, the firm could improve its inventory efficiency.
C) Account payable turns over: Total purchase / Account payables
This ratio measures the number of times a firm is able to pay its average accounts payable
during a year. The turn over increased in 2012, and decreased in 2013 and 2014. The
higher the ratio is, the less time it takes to the company to pay its suppliers. So its better
for a company to have a high ratio. A high ratio is useful to negotiate credit terms
favorable for a firm. The turnover is quite high, but it has deceased over the last 2 years,
so the company can improve this turnover.
INTEL
Account receivable turn over
Inventory turn over
Accounts payable turnover

2010
15,22
11,61
6,61

2011
14,79
13,18
6,85

2012
13,92
11,27
6,68

2013
14,71
12,63
7,14

2014
12,62
13,08
7,37

QUALCOMM
Account receivable turn over
Inventory turn over
Accounts payable turnover

2010
9,55
13,20
4,32

2011
9,29
12,06
5,03

2012
8,54
12,10
5,47

2013
7,93
13,05
6,32

2014
7,72
12,77
4,90

We can now compare these ratios with the competitors. Intel has a better account
receivable turn over than TI, which means that TI can improve its situation, even if the
situation is quite good. For the inventory turn over, in 2014, TI has the lowest ratio, and
Intel has almost a turn over two times bigger than TI. TI should improve its inventory
policy, because it is a huge gap between companies in the same sector. The efficiency of
the inventory management can be improved in Texas Instrument. For the accounts
payable turn over, Texas Instrument has the highest ratio, and three times higher than
Qualcomms. So this is great for TI, the company can pay supplier very quickly. TI will
be able
Billions of dollars
2010
2011
2012
2013
2014
to get
good
Operating cash flow
3.82
3.25
3.41
3.38
3.89
credit
Investment cash
-1.06
-6.17
-1.04
-0.377
terms.
flow
0.00
3
We can
Financing cash flow
-2.63
2.59
-1.95
-3.17
-3.94
see
that Texas Instruments has a high value for Days / Inventory, compared with that of its
competitors. From 2013, the value is showing a negative trend, but it is not much
prominent. The company should take measures to reduce this ratio.
Part 4: ANALYSIS OF FINANCIAL CASH FLOWS
Table: 3 Types of Net cash flows from Texas Instruments Inc. Cash flow Statement
Operating cash flow is the measure of the amount of cash generated by through regular
business operations. It has to be positive in order to generate a sufficient amount of cash
to maintain or grow its business. Otherwise it should search for an external financing
source.
Formula: Net income + Depreciation & Amortization + Changes in non-cash capital
Investment cash flow shows any gains or losses from investments and changes resulting
from investments in capital assets. It may be negative due to investment expenditures,
which is not harmful when business operations generate positive cash flow.
Formula: Disposal of fixed assets + capital expenditures + increase in investments +
decrease in investments + other investing activities
Financial cash flow represents the companys financial strength according to cash raised
by debt or paid as debt repayments. The financial relation between firm owners and
creditors can be measured by this cash flow. When it is positive, it means that money is
flowing into the company, which increases its assets.

Formula: Dividends paid + change in short term borrowing + increase in LT borrowings


+ Increase capital stocks + Decrease in capital stocks + other financing activities
1) CASH FLOW FROM OPERATION ACTIVITIES
Net operating cash flow has been stable since 2010 with little variations (+/- 15%). The
lowest amount was 3,25B of dollars in 2011 whereas the highest was 3,89B of dollars in
2014. This positive and high cash flow is appreciable for investors.
The maintaining of this high value is due to: the increase in deferred taxes cash flow, the
increase in intangible assets amortization and the increase in account receivables.
However, account receivables and deferred taxes became negative in 2014, showing a
decreasing trend initiated in 2013.
2) CASH FLOW FROM INVESTMENT ACTIVITIES

As well as investments are expenses, values for investment are negative.


We can see a significant decrease in net investing cash flow value between 2010 and
2011 (+483,92%), which assess an increase in expenses. This year recorded a high
amount of expenses from net assets from acquisitions (5,43 billions of dollars). The fact
can be explained by the acquisition of National Semiconductor in September 2011
the period between 2011 and 2013 is the time of an increase in net investing cash flow
value. It is due to:
-the decrease of cash flows from capital expenditure;
-the increase in difference result between purchased and sold investments: positive cash
flow generated by selling of investments became higher than the negative cash flow
generated by purchasing;
-the sale of fixed assets in 2013.
In 2014, the net investment cash flow has increased (-377 millions of dollars in 2013 and
-3 millions of dollars in 2014). The reason is the decrease of sales of investments by
around 1 billion of dollars.

The Price per Earnings Ratio (P/ER ratio)


Year
2014
Market Capitalization
61739510067
/Net Income
2821000000
P/ER
21,88568241
FINANCIAL ACTIVITIES

2013
48193311900
2162000000
22,29107858

2012
37761632956
1759000000
21,46767081

3)
CASH
FLOW
FROM

There is only one positive value (2,59 billions of dollars). The company hadnt any debt
in 2010. But in 2012 the company issued a long-term debt of 4,49 billions of dollars. All
negatives values after this year represent the cash flows generated by the reduction of
debt.
However, the increasing trend of the negative net financial cash flow can be explained by
additional financial operations as the increase in repurchasing of common and preferred
stocks, the increase in common cash dividend paid (592 millions of dollars in 2010 and
1.32 billions of dollars in 2014) and the issuing of new long-term debts (considering the
fact that the amount of cash issued is less and less important every year)
Part 5: Study of the Stock Quotes
As a publicly traded company, Texas Instruments Inc. belongs to the shareholders and
investors. Which means their money is always being analyzed to attain the highest
amount of return with the least amount of risk.

The Price per Earning Ratio (P/E ratio) is a ratio, which indicates a companys risk. The
higher the P/E ratio, the lower the risk of the company. The P/E ratio is not only an
indicator of risk nor does it only correspond to the amount of time waited for your money
back, it is also a multiple that helps you understand how much you need to invest to be
able to
The Price to Book Value Ratio (P/BV ratio)
receive
Year
2014
2013
2012 one
Market Capitalization
61739510067
48193311900
37761632956 dollar
/Account equity
10961,0
10807,0
10390,0 of that
P/BV
5,632653049
4,459453308
3,634420881
companys earnings. Since 2012 2014 the P/ER ratio has been stable and consistent,
keeping a high ratio, which also means the risk has been kept consistently low.
The Price per Book Value (P/BV ratio) is a ratio, which compares a stock's market
value to its book value. Since the market value involves future incomes, the P/BV ratio
will be higher as long as the rate of return on a firms earnings on its common equity is
higher.
Risk (per share)
Return (R)
31/12/2011
-8,215384615% Dividend R=(Pt-Pt-1)+D/Pt- The
Pt (Value of
table
9,790450017%
Time31/12/2012
Share)
Pt-Pt-1
s
1
shows
31/12/2013
46,16380706%
31/12/2010
32,5
0,57
that the
31/12/2014
24,77795491%
31/12/2011
29,11
-3,39
0,72
-8,215384615% P/BV
Average Return (R)
18,12920684%
31/12/2012
30,89
1,78
1,07
9,790450017% has
31/12/2013
43,91
13,02
1,24
46,16380706% been
31/12/2014
53,47
9,56
1,32
24,77795491%
increasing since 2011, which means a decrease in accounting equity.
Return Table (per share)
Average Return: The average return over 4 years is 18,13%

Standard Deviation:

Date

31/12/2011

(R-R)
(R-R)^2
(1/T) (R-E
(R))^2

31/12/2012

31/12/2013
28,0346002
-26,34459146 -8,338756825
2
7,85938809
6,94037499 0,695348654
2
1,96484702
1,735093748 0,173837163
3

31/12/2014
6,648748066
44,20585085
11,05146271

Standard Deviation: 3,863319899%


The standard deviation is an annual rate of return, measuring the investments volatility.
Volatility represents a statistical measure of the dispersion of returns for a given
security or market index. Generally, the higher the volatility is, the riskier the security. At
3,86% of volatility, investors have little risk by buying Texas Instruments shares.
Technical Analysis:
CAPM
Risk-Free Rate (r)
Risk Premium (Rm)
Beta (B)
E(R) = r + (B (Rm -r))

0.43
4.6
1.23
5.5591

By utilizing the Capital Asset Pricing Model, we can tell that Texas Instruments will not
bring in a very high return on investment, and with a beta above 1 (by 23%) it is highly
advised to avoid investing, as it is both low return and high risk.
Standard Deviation
Beta of TI stock x Standard Deviation of S&P500
Standard Deviation of S&P500 1-year period 10.97
10.97 x 1.23 = 13.4931
This analysis of the standard deviation using the markets to find our volatility, clearly
demonstrates the TI stock as being quite volatile (13.49% over the market).

Part VI: Recommendations and Conclusions

After completing our financial analysis we can infer that, other than a few exceptions,
Texas Instruments is a well performing and stable company. This can be seen e.g. in their
diversity and success of their products (semiconductors, digital signal processors and
chips for cellular handsets) as well as in their overtaking of other direct competitors, such
as Maxim Integrated planned to be acquired soon, which in the long run will be a very
strong addition to strengthen TIs market position, as was the acquisition of National
Semiconductor in 2011.
Our following recommendations as well as our conclusions concerning the overall
financial analysis:
-

Regarding the gross profit TI is stable since 2008 with around 50%-58% each
year also since 2013; EBITDA, Net Sales and Net income are constantly
increasing.
TI should consider a reduction in their Net Debt, which has been caused by the
merger with National Semiconductor in 2011, which is still very high.
TI should start to reduce its days of inventory, as they are too high compared to its
competitors (TI 50, Qualcomm & Intel around 50).
TI should start to reduce its working capital by minimizing the Accounts
Receivable/Inventories or maximizing the Accounts Payable.

Concerning the market background:


-

As mentioned in the SWOT-Analysis the global semiconductor market is a


growing one. The demand exists, even though they have to take into consideration
the economic slowdowns in US as well as in Europe. Also the microprocessor
market is in good shape. The release of the financial reports has increased the
stock prices against the previous expectations of analysts. Year after year, Texas
Instruments has shown itself to be a thriving company in a fluctuating market,
which demonstrates the solidity of their business model. TIs profits have also
increased thanks the improvement of their chip manufacturing process.
In its 85 years of existence TI has established a strong global market position and
they have the opportunity to expand into developing countries. It is highly
recommended by our team that TI considers expanding and penetrating into these
growing regions. Nevertheless it is needed to mention that they are situated in a
tough and competitive market segment. So, TI needs to constantly keep staying up
to date by investing in R&D (R&D expenses have been decreasing since 2013,
compared to its competitors TI has been low).

Texas Instruments Inc (TXN US) Adjusted


In Millions of USD except Per Share
12 Months Ending
Revenue
+ Sales & Services Revenue
- Cost of Revenue
+ Cost of Goods & Services
Gross Profit
+ Other Operating Income
- Operating Expenses
+ Selling, General & Admin
+ Research & Development
+ Other Operating Expense
Operating Income (Loss)
- Non-Operating (Income) Loss
+ Interest Expense, Net
+ Interest Expense
- Interest Income
+ Foreign Exch (Gain) Loss
+ Other Non-Op (Income) Loss
Pretax Income (Loss), Adjusted
- Abnormal Losses (Gains)
+ Merger Expense
+ Disposal of Assets
+ Asset Write-Down
+ Impairment of Goodwill
+ Sale of Business
+ Restructuring Expense
+ Insurance Settlement
+ Other Abnormal Items
Pretax Income (Loss), GAAP
- Income Tax Expense (Benefit)
+ Current Income Tax
+ Deferred Income Tax
+ Tax Allowance/Credit
Income (Loss) from Cont Ops
- Net Extraordinary Losses (Gains)
+ Discontinued Operations
+ XO & Accounting Changes

FY 2010
12/31/2010
13 966,0
13 966,0
6 486,0
6 486,0
7 480,0
0,0
3 086,0
1 516,0
1 570,0
0,0
4 394,0
-37,0
--13,0
0,0
-24,0
4 431,0
-120,0
-9,0
----144,0
33,0
--4 551,0
1 323,0
1 511,0
-188,0
0,0
3 228,0
0,0
0,0
0,0

FY 2011
12/31/2011
13 735,0
13 735,0
6 795,0
6 795,0
6 940,0
0,0
3 528,0
1 638,0
1 715,0
175,0
3 412,0
37,0
31,0
42,0
11,0
0,0
6,0
3 375,0
420,0
289,0
----112,0
-61,0
80,0
2 955,0
719,0
838,0
-119,0
0,0
2 236,0
0,0
0,0
0,0

FY 2012
12/31/2012
12 825,0
12 825,0
6 436,0
6 436,0
6 389,0
0,0
3 591,0
1 804,0
1 877,0
-90,0
2 798,0
38,0
77,0
85,0
8,0
0,0
-39,0
2 760,0
825,0
471,0
--90,0
-264,0
--1 935,0
176,0
111,0
65,0
0,0
1 759,0
0,0
0,0
0,0

FY 2013
12/31/2013
12 205,0
12 205,0
5 841,0
5 841,0
6 364,0
0,0
3 714,0
1 858,0
1 522,0
334,0
2 650,0
78,0
85,0
95,0
10,0
0,0
-7,0
2 572,0
-182,0
7,0
-----189,0
--2 754,0
592,0
542,0
50,0
0,0
2 162,0
0,0
0,0
0,0

FY 2014
12/31/2014
13 045,0
13 045,0
5 618,0
5 618,0
7 427,0
0,0
3 205,0
1 843,0
1 358,0
4,0
4 222,0
73,0
87,0
94,0
7,0
0,0
-14,0
4 149,0
275,0
330,0
-75,0
---20,0
--3 874,0
1 053,0
1 114,0
-61,0
0,0
2 821,0
0,0
0,0
0,0

Income (Loss) Incl. MI


- Minority Interest
Net Income, GAAP
- Preferred Dividends
- Other Adjustments
Net Income Avail to Common, GAAP

3 228,0
0,0
3 228,0
0,0
44,0
3 184,0

2 236,0
0,0
2 236,0
0,0
35,0
2 201,0

1 759,0
0,0
1 759,0
0,0
31,0
1 728,0

2 162,0
0,0
2 162,0
0,0
36,0
2 126,0

2 821,0
0,0
2 821,0
0,0
43,0
2 778,0

Net Income Avail to Common, Adj


Net Abnormal Losses (Gains)
Net Extraordinary Losses (Gains)

3 106,0
-78,0
0,0

2 474,0
273,0
0,0

2 295,8
567,8
0,0

2 007,7
-118,3
0,0

2 929,9
151,9
0,0

Basic Weighted Avg Shares


Basic EPS, GAAP
Basic EPS from Cont Ops
Basic EPS from Cont Ops, Adjusted

1 199,0
2,66
2,66
2,59

1 151,0
1,91
1,91
2,15

1 132,0
1,53
1,53
2,03

1 098,0
1,94
1,94
1,83

1 065,0
2,61
2,61
2,75

Diluted Weighted Avg Shares


Diluted EPS, GAAP
Diluted EPS from Cont Ops
Diluted EPS from Cont Ops, Adjusted

1 213,0
2,62
2,62
2,56

1 171,0
1,88
1,88
2,11

1 146,0
1,51
1,51
2,01

1 113,0
1,91
1,91
1,80

1 080,0
2,57
2,57
2,71

US GAAP
5 307,0
38,00
4 442,0
4 394,0
53,56
31,46
22,55
-0,49
587,5
0,0
1 570,0
865,0
100,0

US GAAP
4 427,0
32,23
3 523,0
3 412,0
50,53
24,84
18,27
-0,56
644,0
-1 715,0
904,0
109,0

US GAAP
4 097,0
31,95
3 140,0
2 798,0
49,82
21,82
18,14
375 538,05
0,72
819,0
-1 877,0
957,0
124,0

US GAAP
3 947,0
32,34
3 068,0
2 650,0
52,14
21,71
16,74
378 931,35
1,07
1 175,0
-1 522,0
879,0
--

US GAAP
5 452,0
41,79
4 602,0
4 222,0
56,93
32,36
22,79
420 765,73
1,24
1 323,0
-1 358,0
850,0
--

Reference Items
Accounting Standard
EBITDA
EBITDA Margin (T12M)
EBITA
EBIT
Gross Margin
Operating Margin
Profit Margin
Revenue Per Employee
Dividends per Share
Total Cash Common Dividends
Capitalized Interest Expense
Research & Development Expense
Depreciation Expense
Rental Expense
Source: Bloomberg

Texas Instruments Inc (TXN US) Standardized

In Millions of USD except Per Share


12 Months Ending
Total Assets
+ Cash, Cash Equivalents & STI
Growth (YoY)
+ Cash & Cash Equivalents
Growth (YoY)
+ ST Investments
Growth (YoY)
+ Accounts & Notes Receiv
Growth (YoY)
+ Accounts Receivable, Net
Growth (YoY)
+ Notes Receivable, Net
+ Inventories
Growth (YoY)
+ Raw Materials
Growth (YoY)
+ Work In Process
Growth (YoY)
+ Finished Goods
Growth (YoY)
+ Other Inventory
+ Other ST Assets
Growth (YoY)
+ Derivative & Hedging Assets
+ Deferred Tax Assets
Growth (YoY)
+ Income Taxes Receivable
+ Misc ST Assets
Growth (YoY)
Total Current Assets
Growth (YoY)
+ Property, Plant & Equip, Net
Product/Brand Segments
Semiconductor
Geographic Segments
U.S.
Asia
Europe
Japan
Rest of World
Growth (YoY)

FY 2010
12/31/2010

FY 2011
12/31/2011

FY 2012
12/31/2012

FY 2013
12/31/2013

FY
12/31

3 072,0
5,0
1 319,0
11,6
1 753,0
0,6
1 518,0
18,9
1 518,0
18,9
0,0
1 520,0
26,5
122,0
31,2
919,0
21,2
479,0
36,5
0,0
950,0
33,8
0,0
770,0
41,0
-180,0
9,8
7 060,0
15,5
3 680,0
3 680,0
3 680,0
3 680,0
1 694,0
1 575,0
139,0
249,0
23,0
16,5

2 935,0
-4,5
992,0
-24,8
1 943,0
10,8
1 545,0
1,8
1 545,0
1,8
0,0
1 788,0
17,6
115,0
-5,7
1 004,0
9,2
669,0
39,7
0,0
1 560,0
64,2
0,0
1 174,0
52,5
-386,0
114,4
7 828,0
10,9
4 428,0
4 428,0
4 428,0
4 402,0
2 159,0
1 739,0
276,0
228,0
-20,3

3 965,0
35,1
1 416,0
42,7
2 549,0
31,2
1 230,0
-20,4
1 230,0
-20,4
0,0
1 757,0
-1,7
116,0
0,9
935,0
-6,9
706,0
5,5
0,0
1 278,0
-18,1
0,0
1 044,0
-11,1
-234,0
-39,4
8 230,0
5,1
3 912,0
3 912,0
3 912,0
3 912,0
1 931,0
1 547,0
241,0
174,0
19,0
-11,7

3 829,0
-3,4
1 627,0
14,9
2 202,0
-13,6
1 203,0
-2,2
1 203,0
-2,2
0,0
1 731,0
-1,5
102,0
-12,1
919,0
-1,7
710,0
0,6
0,0
1 256,0
-1,7
0,0
393,0
-62,4
-863,0
268,8
8 019,0
-2,6
3 399,0
3 399,0
3 399,0
3 399,0
1 765,0
1 277,0
196,0
144,0
17,0
-13,1

2
2
2
2
1
1

+ Property, Plant & Equip


Growth (YoY)
- Accumulated Depreciation
Growth (YoY)
+ LT Investments & Receivables
Growth (YoY)
+ LT Investments
Growth (YoY)
+ Other LT Assets
Growth (YoY)
+ Total Intangible Assets
Growth (YoY)
+ Goodwill
Product/Brand Segments
Analog
Embedded Processing
Other
Sensors & Controls
Wireless
Semiconductor
Growth (YoY)
+ Other Intangible Assets
Growth (YoY)
+ Deferred Tax Assets
Growth (YoY)
+ Derivative & Hedging Assets
+ Prepaid Pension Costs
Growth (YoY)
+ Misc LT Assets
Growth (YoY)
Total Noncurrent Assets
Growth (YoY)
Total Assets
Product/Brand Segments
Semiconductor
Sensors & Controls
Adjustment
Corporate
Education Technology
Growth (YoY)
Liabilities & Shareholders' Equity
+ Payables & Accruals

6 907,0
3,0
3 227,0
-9,0
453,0
-28,9
453,0
-28,9
2 208,0
-0,1
1 205,0
3,1
924,0
924,0
630,0
172,0
32,0
-90,0
--0,2
281,0
15,6
927,0
0,1
0,0
31,0
-51,6
45,0
-11,8
6 341,0
5,6
13 401,0
13 401,0
13 401,0
----10,6

7 133,0
3,3
2 705,0
-16,2
265,0
-41,5
265,0
-41,5
7 976,0
261,2
7 558,0
527,2
4 452,0
4 452,0
4 158,0
172,0
32,0
-90,0
-381,8
3 106,0
1 005,3
321,0
-65,4
0,0
40,0
29,0
57,0
26,7
12 669,0
99,8
20 497,0
20 497,0
20 497,0
----53,0

6 891,0
-3,4
2 979,0
10,1
215,0
-18,9
215,0
-18,9
7 664,0
-3,9
7 062,0
-6,6
4 362,0
4 362,0
4 158,0
172,0
32,0
-0,0
--2,0
2 700,0
-13,1
280,0
-12,8
0,0
68,0
70,0
254,0
345,6
11 791,0
-6,9
20 021,0
20 021,0
20 021,0
-----2,3

6 556,0
-4,9
3 157,0
6,0
216,0
0,5
216,0
0,5
7 304,0
-4,7
6 703,0
-5,1
4 362,0
4 362,0
4 158,0
172,0
32,0
---0,0
2 341,0
-13,3
207,0
-26,1
0,0
130,0
91,2
264,0
3,9
10 919,0
-7,4
18 938,0
18 938,0
18 938,0
-----5,4

1 981,0

2 118,0

1 928,0

1 746,0

4
4
4

17
17
17

Growth (YoY)
+ Accounts Payable
Growth (YoY)
+ Accrued Income Taxes
Growth (YoY)
+ Interest & Dividends Payable
+ Other Payables & Accruals
Growth (YoY)
+ ST Debt
Growth (YoY)
+ ST Borrowings
Growth (YoY)
+ ST Capital Leases
+ Current Portion of LT Debt
Growth (YoY)
+ Other ST Liabilities
Growth (YoY)
+ Deferred Revenue
+ Derivatives & Hedging
+ Deferred Tax Liabilities
Growth (YoY)
+ Misc ST Liabilities
Growth (YoY)
Total Current Liabilities
Growth (YoY)
+ LT Debt
Growth (YoY)
+ LT Borrowings
Growth (YoY)
+ LT Capital Leases
+ Other LT Liabilities
Growth (YoY)
+ Accrued Liabilities
+ Pension Liabilities
Growth (YoY)
+ Deferred Revenue
+ Deferred Tax Liabilities
Growth (YoY)
+ Derivatives & Hedging
+ Misc LT Liabilities
Growth (YoY)
Total Noncurrent Liabilities
Growth (YoY)

24,8
621,0
23,5
109,0
-14,8
0,0
1 251,0
30,9
0,0
------0,0
-0,0
0,0
--0,0
-1 981,0
24,8
0,0
-0,0
--983,0
21,4
0,0
519,0
22,1
0,0
86,0
28,4
0,0
378,0
18,9
983,0
21,4

6,9
625,0
0,6
101,0
-7,3
0,0
1 392,0
11,3
1 381,0
-999,0
-0,0
382,0
-0,0
-0,0
0,0
--0,0
-3 499,0
76,6
4 211,0
-4 211,0
-0,0
1 835,0
86,7
0,0
701,0
35,1
0,0
607,0
605,8
0,0
527,0
39,4
6 046,0
515,1

-9,0
444,0
-29,0
79,0
-21,8
0,0
1 405,0
0,9
1 500,0
8,6
0,0
--1 500,0
292,7
2,0
-0,0
0,0
2,0
-0,0
-3 430,0
-2,0
4 186,0
-0,6
4 186,0
-0,6
-1 444,0
-21,3
0,0
269,0
-61,6
0,0
572,0
-5,8
0,0
603,0
14,4
5 630,0
-6,9

-9,4
422,0
-5,0
119,0
50,6
0,0
1 205,0
-14,2
1 000,0
-33,3
0,0
--1 000,0
-33,3
1,0
-50,0
0,0
0,0
1,0
-50,0
0,0
-2 747,0
-19,9
4 158,0
-0,7
4 158,0
-0,7
-1 226,0
-15,1
0,0
216,0
-19,7
0,0
548,0
-4,2
0,0
462,0
-23,4
5 384,0
-4,4

Total Liabilities
Growth (YoY)
+ Preferred Equity
+ Share Capital & APIC
Growth (YoY)
+ Common Stock
Growth (YoY)
+ Additional Paid in Capital
Growth (YoY)
- Treasury Stock
Growth (YoY)
+ Retained Earnings
Growth (YoY)
+ Other Equity
Growth (YoY)
Equity Before Minority Interest
Growth (YoY)
+ Minority Interest
Total Equity
Growth (YoY)
Total Liabilities & Equity
Growth (YoY)
Reference Items
Accounting Standard
Shares Outstanding
Growth (YoY)
Number of Treasury Shares
Growth (YoY)
Pension Obligations
Growth (YoY)
Operating Leases
Growth (YoY)
Capital Leases - Total
Options Granted During Period
Growth (YoY)
Options Outstanding at Period End
Growth (YoY)
Net Debt
Growth (YoY)
Net Debt to Equity
Growth (YoY)
Tangible Common Equity Ratio

2 964,0
23,7
0,0
2 854,0
1,0
1 740,0
0,0
1 114,0
2,6
16 411,0
12,8
24 695,0
11,9
-701,0
-12,9
10 437,0
7,4
0,0
10 437,0
7,4
13 401,0
10,6

9 545,0
222,0
0,0
2 935,0
2,8
1 741,0
0,1
1 194,0
7,2
17 485,0
6,5
26 278,0
6,4
-776,0
-10,7
10 952,0
4,9
0,0
10 952,0
4,9
20 497,0
53,0

9 060,0
-5,1
0,0
2 917,0
-0,6
1 741,0
0,0
1 176,0
-1,5
18 462,0
5,6
27 205,0
3,5
-699,0
9,9
10 961,0
0,1
0,0
10 961,0
0,1
20 021,0
-2,3

8 131,0
-10,3
0,0
2 952,0
1,2
1 741,0
0,0
1 211,0
3,0
19 790,0
7,2
28 173,0
3,6
-528,0
24,5
10 807,0
-1,4
0,0
10 807,0
-1,4
18 938,0
-5,4

US GAAP
1 167,4
-5,9
572,7
14,6
519,0
22,1
359,0
-17,8
-16,2
6,4
150,1
-14,1
-3 072,0
-5,0
-29,43
2,2
75,70

US GAAP
1 139,5
-2,4
601,1
5,0
701,0
35,1
436,0
21,4
0,0
10,3
-36,4
113,3
-24,6
2 657,0
-24,26
-26,23

US GAAP
1 108,2
-2,7
632,6
5,2
269,0
-61,6
406,0
-6,9
-13,5
31,0
99,6
-12,0
1 721,0
-35,2
15,70
-35,3
30,09

US GAAP
1 082,8
-2,3
658,0
4,0
216,0
-19,7
413,0
1,7
-13,0
-3,9
64,9
-34,8
1 329,0
-22,8
12,30
-21,7
33,54

21

29

10

10

17

US
1

Growth (YoY)
Current Ratio
Growth (YoY)
Cash Conversion Cycle
Growth (YoY)
Number of Employees
Source: Bloomberg

-3,1
3,56
-7,5
83,05
-13,7
--

-65,3
2,24
-37,2
95,95
15,5
--

14,7
2,40
7,3
109,62
14,2
34 151,00

11,5
2,92
21,7
118,18
7,8
32 209,00

31 0

Texas Instruments Inc (TXN US) - Standardized


In Millions of USD except Per Share
12 Months Ending
Cash from Operating Activities
+ Net Income
+ Depreciation & Amortization
+ Non-Cash Items
+ Stock-Based Compensation
+ Deferred Income Taxes
+ Other Non-Cash Adj
+ Chg in Working Capital
+ (Inc) Dec in Accts Receiv
+ (Inc) Dec in Inventories
+ Inc (Dec) in Accts Payable
+ Inc (Dec) in Other
+ Net Cash From Disc Ops
Cash from Operating Activities
Cash from Investing Activities
+ Change in Fixed & Intang
+ Disp in Fixed & Intang
+ Disp of Fixed Assets
+ Disp of Intangible Assets
+ Acq of Fixed & Intang
+ Purchase of Fixed Production Assets
+ Acq of Intangible Assets
+ Net Change in LT Investment
+ Dec in LT Investment
+ Inc in LT Investment
+ Net Cash From Acq & Div
+ Cash from Divestitures

FY 2010
12/31/2010

FY 2011
12/31/2011

FY 2012
12/31/2012

FY 2013
12/31/2013

FY 2014
12/31/2014

3 228,0
913,0
-130,0
190,0
-188,0
-132,0
-191,0
-231,0
-304,0
-344,0
0,0
3 820,0

2 236,0
1 015,0
145,0
269,0
-119,0
-5,0
-140,0
112,0
-17,0
--235,0
0,0
3 256,0

1 759,0
1 299,0
223,0
263,0
65,0
-105,0
133,0
311,0
5,0
0,0
-183,0
0,0
3 414,0

2 162,0
1 297,0
207,0
287,0
50,0
-130,0
-282,0
16,0
26,0
0,0
-324,0
0,0
3 384,0

2 821,0
1 230,0
64,0
277,0
-61,0
-152,0
-223,0
-49,0
-53,0
0,0
-121,0
0,0
3 892,0

-1 199,0
0,0
-0,0
-1 199,0
-1 199,0
0,0
139,0
147,0
-8,0
-51,0
148,0

-816,0
0,0
-0,0
-816,0
-816,0
0,0
151,0
157,0
-6,0
-5 409,0
16,0

-495,0
0,0
0,0
0,0
-495,0
-495,0
0,0
60,0
61,0
-1,0
0,0
0,0

-412,0
0,0
0,0
0,0
-412,0
-412,0
0,0
0,0
0,0
0,0
0,0
0,0

-385,0
0,0
0,0
0,0
-385,0
-385,0
0,0
0,0
0,0
0,0
0,0
0,0

+ Cash for Acq of Subs


+ Cash for JVs
+ Other Investing Activities
+ Net Cash From Disc Ops
Cash from Investing Activities

-199,0
0,0
54,0
0,0
-1 057,0

-5 425,0
0,0
-98,0
0,0
-6 172,0

0,0
0,0
-604,0
0,0
-1 039,0

0,0
0,0
409,0
0,0
-3,0

0,0
0,0
8,0
0,0
-377,0

Cash from Financing Activities


+ Dividends Paid
+ Cash From (Repayment) Debt
+ Cash From (Repay) ST Debt
+ Cash From LT Debt
+ Repayments of LT Debt
+ Cash (Repurchase) of Equity
+ Increase in Capital Stock
+ Decrease in Capital Stock
+ Other Financing Activities
+ Net Cash From Disc Ops
Cash from Financing Activities

-592,0
0,0
0,0
0,0
0,0
-2 034,0
420,0
-2 454,0
0,0
0,0
-2 626,0

-644,0
4 497,0
0,0
4 697,0
-200,0
-1 252,0
721,0
-1 973,0
-12,0
0,0
2 589,0

-819,0
117,0
0,0
1 492,0
-1 375,0
-1 239,0
561,0
-1 800,0
-10,0
0,0
-1 951,0

-1 175,0
-514,0
0,0
986,0
-1 500,0
-1 474,0
1 394,0
-2 868,0
-7,0
0,0
-3 170,0

-1 323,0
-502,0
0,0
498,0
-1 000,0
-2 115,0
716,0
-2 831,0
-3,0
0,0
-3 943,0

0,0

0,0

0,0

0,0

0,0

137,0

-327,0

424,0

211,0

-428,0

---

---

171,0
97,0

569,0
102,0

1 104,0
102,0

5 427,0
38,86
199,0
13,0
2 621,0
-2 621,0
2,19
14,87
1,18

4 007,0
29,17
5 425,0
31,0
2 440,0
2 471,8
6 937,0
2,12
13,73
1,46

3 272,0
25,51
0,0
38,0
2 919,0
2 996,3
3 036,0
2,58
11,98
1,94

4 129,0
33,83
0,0
80,0
2 972,0
3 046,6
2 458,0
2,71
16,22
1,57

5 177,0
39,69
0,0
100,0
3 507,0
3 575,4
3 005,0
3,29
16,24
1,38

Effect of Foreign Exchange Rates


Net Changes in Cash
Cash Paid for Taxes
Cash Paid for Interest
Reference Items
EBITDA
Trailing 12M EBITDA Margin
Net Cash Paid for Acquisitions
Tax Benefit from Stock Options
Free Cash Flow
Free Cash Flow to Firm
Free Cash Flow to Equity
Free Cash Flow per Basic Share
Price to Free Cash Flow
Cash Flow to Net Income
Source: Bloomberg

Bibliography:
http://www.fool.com/investing/general/2015/10/23/weak-demandbut-strong-sales-heres-how-texas-instr.aspx
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/hi
stretSP.html
http://performance.morningstar.com/Performance/indexc/performance-return.action?t=SPX&region=usa&culture=en-US
http://www.treasury.gov/resource-center/data-chart-center/interestrates/Pages/TextView.aspx?data=yieldYear&year=2014
https://www.treasurydirect.gov/govt/rates/pd/avg/2015/2015_10.ht
m

http://www.bloomberg.com/news/articles/2015-10-28/texasinstruments-said-in-talks-to-acquire-maxim-integrated
http://finance.yahoo.com/q/hp?
s=TXN&a=11&b=31&c=2011&d=11&e=31&f=2011&g=d