Fundamental Analysis
UTC serves customers in the commercial aerospace, defense and building industries and ranks among the world’s most respected and innovative companies.
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see UNITED TECHNOLOGIES makes a margin of 13% on Gross Level and about 8.5% on Net level This means that out of $1 that it makes $0.085 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see UNITED TECHNOLOGIES grew at an good rate of 10% in the revenue but the net profit declined by 6%.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see UNITED TECHNOLOGIES makes a Return on Assets of 5% and Return of Equity of 16% which is pretty good.
Here we see that UNITED TECHNOLOGIES scores poorly on the growth front and also has a high Debt/Equity. Hence we would avoid investing in such companies.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by UNITED TECHNOLOGIES to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
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