Business Analyzer Worksheet

Name of Business: Adidas

1. Does the company have an identifiable durable competitive advantage?
If yes, describe it in as simple a manner as you can.

1. Pass / Fail

Yes, they compete with the best of sports brand clothing and accessories companies. They have famous
endorsements and a very loyal customer base. They are a very famous brand.

2. Do you understand how the business product/service works?

If yes, describe how the product/service works.

2. Pass / Fail

Yes, they sell many sports clothing and accessories such as shoes, socks, pants, shirts, sweatshirts, and
much more.

3. Will the businesss product/service be obsolete in 20 years?

If no, explain why the product/service will not be obsolete in 20 years.

3. Pass / Fail

NO, they will be around over the years because of the loyal customers, the brand name, the endorsements,
and the money that they have.

4. What is the companys per share earning history and growth rate?
(Finding Information on morningstar.com)
EPS (Earnings Per Share) --- Type Ticker Symbol in Get QuoteFinancials
Year
EPS

2005
4.08

2006
4.50

2007
2.57

2008
3.07

2009
1.22

2010
2.71

2011
3.20

2012
2.52

2013
3.76

Has companys EPS consistently gone up each year? _no__

If not, was the weakness a one-time event? __no_

2014
2.35
4. Pass / Fail

5. Is the company consistently earning a high return on equity?

(Finding Information on morningstar.com)
ROE for past ten years --- Key Ratios (will only show last 5 years)
Year

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Business Analyzer Worksheet

Return on
Equity

17.04 17.53

18.83

20.03

5 -Year Average Return on Equity _12.064_

6.85

13.52

13.50

Higher than 15%? __no_

9.90

14.58

8.82

5. Pass / Fail

6. Does the company have a lot of debt?

6. Pass / Fail
Long-term debt in the current year of the business / Total net earnings in the current year of the business
__1,584,000,000___

__538,000,000___ = _2.944_

Long term debt should not be more than five times current net earnings
(Finding Information on morningstar.com)
Long Term Debt ---Financials - Balance Sheet --- (Click Annual tab at top; Look at
current year)
Total Net Income ---Financials - Income Statement (Click Annual tab at top; Look
at current year)
7. Is the company free to raise prices with inflation?

7. Pass / Fail

If the price of the product has risen on an average of at least 4% a year over the last twenty years, then
you can bet the farm that its the kind of business that can raise prices along with inflation.
8. Are large capital expenditures required to update plant and equipment?
(Does the product/service require expensive changes or upgrades?)

8. Pass / Fail

Price Analysis
9. Is the companys stock price suffering from a market panic, a business recession, or an individual
calamity that is curable?
9. Pass / Fail

10. Use this formula to determine if the business is undervalued, fair valued, or overvalued.
P/E Ratio (Price / Earnings) / 5-Year Annual Avg. of Net Income =
__27.4_

__23.8__

_1.151_

0 1 = Company is undervalued
10. Undervalued/Fair value/Overvalued
1 2 = Company is fair valued
2 3 = Company if overvalued
(Finding Information on money.msn.com/)
P/E Ratio --- Valuation Price/Earnings (1st Column)
Net Income 5 Year Average ---Valuation Price/Earnings (4th Column)

Business Scorecard:
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Business Analyzer Worksheet

Competitiv
e
Advantage

Understan
d
Business

Product/Servic
e
Obsolete in
20 years

Earnings
Per Share
(EPS)

Return
on
Equity
(ROE)

Debt

Free to
Raise
Prices

Large
Cap. Exp
Needed

Pass

Pass

Pass

Pass

Pass

Pass

Pass

Fail

Fail

Fail

Fail

Fail

Fail

Fail

On Sale

Valuation

Pass

Pass

Undervalue
d
Fair valued

Fail

Fail
Overvalued