COMPANY ANALYSIS

INTUIT, APPLE & THOR INDUSTRIES

DESCRIPTION AND MISSION STATEMENT

• Company I: Intuit Inc.
• Software company that primarily develops financial software including QuickBooks, TurboTax, and Credit Karma.
• Company’s mission is “to power prosperity across the world” by designing software that assists individuals and small businesses in their financial management
• Company II: Apple Inc.
• US-based designer, manufacturer, and marketer of computers, smartphones, and technological accessories, as well as a provider of various services including advertising, digital content, and device repair services
• Apple’s mission is to elevate users’ experience through innovation in software, hardware, and service provision
• Company III: Thor Industries
• US-based company that manufactures and markets recreational vehicles (RVs) in the US, Canada, and Europe
• Company’s mission is to connect families and people with the outdoors

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REVENUE COMPARISON

• Apple had the highest revenues of $365.817 billion
• Intuit and Thor industries had roughly equal revenues of $12.726 billion and $12.317 billion, respectively
• Apple’s revenues are more than 28 times Intuit’s and Thor’s revenues; thus the most meaningful comparison of performance will be accomplished through ratio analyses rather than the analysis of absolute values from the financial statements

GROSS PROFIT COMPARISON

• Apple had the highest gross profit of $167.861 million, which was as expected given its considerably higher revenues
• Thor Industries gross profit of $1.895 billion was substantially lower than Intuit’s gross profits of $10.320 billion despite their roughly equal revenues
• This is indicative of higher production costs in the automobile industry when compared to the software industry, which results in the former’s lower gross margin

NET INCOME COMPARISON

• Apple had the highest net income of $94.680 billion, substantially higher than Intuit’s net income of $2.066 billion
• Disparity between Apple’s and Intuit’s net income is much larger than the disparity between the two companies’ revenues
• Apple’s net income was approx. 46 times Intuit’s net income, which is indicative of the former’s higher ability to convert revenue into profit
• Thor Industries had the lowest net income of $660 million, further illustrating the higher production and operating expenses and resultant low net income margin for the automobile industry when compared to the software industry

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TOTAL ASSETS COMPARISON

• Apple had the largest asset base at $351.002 billion
• Intuit reported total assets of $27.734 billion, roughly equivalent to 7% of Apple’s total assets
• Thor Industries reported total assets of $6.654 billion, roughly equivalent to 2% of Apple’s total assets
• Thor’s revenues were only slightly lower than Intuit’s despite the company’s assets being equal to 24% of Intuit’s total assets
• Indicative of Thor’s better asset use efficiency when compared to Intuit

TOTAL CASH COMPARISON

• The total cash balance as per the balance and statement of cash flows are presented in the clustered column chart
• Apple had the highest cash balance while Thor Industries had the lowest
• Apple’s ending cash as per the statement of cash flows was considerably lower than its cash position as per the balance sheet and its liquidity, as measured by the cash ratio, might be overstated
• Intuit’s total cash as per the balance sheet was only slightly higher than the ending cash as per the SCF while Thor’s cash balances were equal.

NET PROPERTY, PLANT & EQUIPMENT COMPARISON

• As with total assets and cash, Apple had the highest net PPE at $39.44 billion
• Intuit and Thor Industries net PPE were equivalent to 3.6% and 3% of Apple’s net PPE, respectively
• Thor Industries net PPE is only slightly lower than Intuit’s despite Intuit having considerably higher total assets than Thor
• Indicative of Thor Industries’ – a manufacturing company – greater reliance on fixed assets compared to Intuit, a service company

OPERATING CASH FLOW COMPARISON

• Apple had the highest operating cash flows (OCF), which was expected given its significantly higher net income
• Intuit’s OCFs were equivalent to 3.3% of Apple’s OCFs. When considering the fact that Intuit’s net income was equivalent to 2.2% of Apple’s net income, Intuit’s capacity to generate cash from operations appears to exceed Apple’s
• Thor had the lowest OCF, which was expected given its relatively low net income

INVESTING CASH FLOW COMPARISON

• All three companies had negative investing cash flows indicating that the cash used in investing activities exceeded the cash generated from investing activities
• While Apple had the highest expenditures in investing activities, the difference between its spending and Intuit’s was less dramatic when compared to the differences observed in previous slides
• Suggestive of Intuit’s higher projected growth and accelerated investment in assets to support revenue growth

FINANCING CASH FLOW COMPARISON

• Apple and Thor used cash in financing activities while Intuit generated cash from financing activities
• Intuit’s positive financing cash flows further illustrate management’s anticipation of revenue growth
• Apple and Thor’s negative financing cash flows are indicative of excess funds after spending on operating and investing activities

PROFIT MARGIN COMPARISON

• Apple had the highest profit margin of 25.71%
• Indicative of the company’s higher ability to convert revenue into profit when compared to Intuit and Thor Industries
• Intuit had the second highest profit margin at 16.23%. For every dollar of revenue, the company converted approx. 16 cents to profit
• Thor Industries had the lowest profit margin of 6.76%, converting approx. 7 cents to profit for every dollar of revenue. Low profit margin is mostly attributed to the company’s higher cost of sales compared to Apple and Intuit

RETURN ON ASSETS

• Apple had the highest return on assets of 22.20%
• Net income of $0.222 for every dollar of assets
• Thor had the second highest return on assets
• Net income of $0.13 for every dollar of assets
• Intuit had the lowest return on assets of 7.43%
• ROA less than Thor’s despite the company’s higher profit margin
• Indicative of Thor’s higher asset use efficiency compared to Intuit

BETA COMPARISON

• Beta is a measure of a stock’s exposure to market risk
• All three stocks had beta values greater than 1 indicating higher risk exposure when compared to the market portfolio
• Thor Industries had the highest exposure to market risk as indicated by its beta of 1.71
• Intuit had the least exposure to market risk as indicated by its beta of 1.17

CURRENT RATIO

• Liquidity was assessed using the current ratio
• Thor and Intuit’s current ratios were above the benchmark value of 1
• Current assets were 1.7 times and 1.39 times the current liabilities, respectively, indicating sufficient ability to cover short-term obligations
• Apple’s current assets were 0.87 times its current liabilities indicating insufficient ability to cover short-term obligations

QUARTERLY EARNINGS GROWTH

• The year-on-year quarterly earnings growth compares the growth in earnings from the last reported quarter relative to the corresponding quarter in the previous year
• Apple and Intuit’s earnings in their last reported quarters were 11% and 18% lower than the earnings from the corresponding quarters in 2021
• On the other hand, Thor’s earnings from the last quarter were 90% higher than the earnings from the 2021 quarter

QUALITATIVE ANALYSIS

• Apple Inc.
• Analysts at Stock Analysis project a 23.33% increase in Apple’s stock price while Yahoo! Finance projected earnings growth of 8.9% in the current year and 5.9% in the next year
• Intuit Inc.
• Despite having negative YOY growth in the last quarter, analysts Yahoo! Finance projected a 32.9% growth in earnings for Airbnb in the next quarter
• Thor Industries
• While Thor Industries had the highest earnings growth in the most recent quarter, the company had the highest projected decreases in earnings growth.
• Yahoo! Finance projects negative growth for Thor Industries in the current quarter (-7%), next quarter (-49%), and next year (-50%). I would recommend selling the stock

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RECOMMENDATIONS

• Lending recommendation
• I would lend money to Apple as its bonds are rated AAA by Moody, indicating high ability to service its debt obligations
• Investment recommendation
• I would invest in Intuit as it had the highest quarterly growth and projected growth in the next year. It’s high investing cash outflows and positive financing cash flows support analyst’s expectation of high revenue growth
• Employment recommendation
• I would work at Intuit as it has the highest ratings on Glassdoor and I am interested in working in the financial sector