Kaitlyn Emerick
Keiarra Ragland
Victoria Saber
Agenda:
 Company Introduction
 Overview Analysis
 Analysis of Firm Riskiness
 Financial Statement Analysis
 Firm Valuation
 Future Recommendations
Company Overview & Facts
SWOT Analysis & Competitors
S
Presence across the
energy value chain
-Strategic acquisition of
Atlas Energy
-Wide geographic
presence
O
Planned investments for
future development
Agreement to acquire
Marcellus shale acreage
Technological innovations
W
-Involvement in the
environmental disaster in
Ecuador
-Strain on sales of refined
products
$41.06
$87.04
Market Cap 130.8B
Market Cap $389.98
---
---
T
CVX $117.25
CVX $117.25
Regulation of greenhouse
gas emissions
Market Cap 2227.78B
Market Cap 2227.78B
Civil unrest in Nigeria
threatens crude oil
production
Commodity prices risks
Health
Environmental
Safety
Calculated
Industry Beta
Reuters Beta
Yahoo Beta
Group Calculation
CAPM Computation
Beta
.90 as of 2/27/2013
.80 as of 2/27/2013
1.17 as of 2/27/2013
.77 as of 2/27/2013
3.22%
Ratio Analysis: Liquidity
Quick Ratio aka Acid Test
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Quick Ratio aka Acid Test
Current Ratio
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Current Ratio
Industry
2012
2011
2010
2009
Ratio Analysis: Asset Management
Days Sales Outstanding
Fixed Asset Turnover Ratio
45
40
35
30
25
Fixed Asset Turnover20
Ratio
15
10
5
0
70
60
50
40
30
20
10
0
Industry
2012
2011
2010
2009
2008
Industry
Inventory Turnover Ratio
2012
2011
2010
2009
2008
Total Asset Turnover
1.6
45
40
35
30
25
20
15
10
5
0
Industry
2012
2011
1.4
1.2
1
2012
0.8
2010
2011
0.6
2009
2010
0.4
2008
0.2
0
Industry
2012
2011
2010
2009
2008
Industry
2009
2008
Ratio Analysis: Debt Management
Times Interest Earned
250
Industry
200
2012
150
2011
2010
100
2009
50
2008
0
Industry
2012
2011
2010
2009
2008
Total Debt Ratio
7.00%
6.00%
Industry
5.00%
2012
4.00%
2011
3.00%
2010
2.00%
2009
1.00%
2008
0.00%
Industry
2012
2011
2010
2009
2008
Ratio Analysis: Profitability & Market Value
Return on Equity
Profit Margin
Return on Total Assets
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
15.00%
10.00%
5.00%
0.00%
Price/ Earnings Ratio
Market/ Book Ratio
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
2012
2011
2010
2009
2008
Industry
2012
2011
2010
2009
2008
Industry
Firm Valuation: Discount Dividend Model (DDM)
Do(1+g)/re-g = 3.69/3.22-2.56

For Chevron’s discount dividend model,

re (calculated from CAPM) 3.22

constant growth = 2.56
Calculations = Stock Price $184.71
Currently trading: $117.22
UNDERVALUED
Year
Dividend
% Change
%
Average
of all
years
2012
$3.51
.1359
13%
9.25%
2011
$3.09
.0880
8.80%
2010
$2.84
.0677
6.77%
2009
$2.66
.0514
5.14%
2008
$2.53
.1195
11.95%
2007
$2.26
Firm Valuation: WACC
Cost of
Equity
4.56%
Cost of Debt
3.50%
Debt
to Value
41%
Equity to
Value
59%
WACC
4.71%
Terminal
WACC
Firm Valuation: Valuation using multiples (P/E ratio)
Chevron's P/E Ratio
Industry P/E
Chevron's EPS
Stock Price
$12.2
$13.32
$162.50
Firm Valuation
Revenue Growth
Fiscal Year
Total Revenues
Revenue Growth Rate
2012
2011
241,909.00 253,706.00
-4.88%
5 year average
-7.12%
2 year average
7.17%
19.23%
Analysts predict
-1.30% (yahoo finance)
Our Prediction
-1.30%
Tax Rate
Average
2010
2009
204,928.00 171,636.00
16.25%
2008
273,005.00
-59.06%
2012
2011
2010
2009
2008
43.16%
43.30%
40.37%
43.05%
44.19%
42.81%
Firm Valuation: Free Cash Flow Model (FCFM)
Firm Valuation: Stock Price Valuation
Recommendations
Begin
Investing
Continued
Growth of
Dividends
Hold stock
Increased
Stock Price
Value
Currently
Stable
Potential
Future Gains
Well
Established
Company