Submitted by: Submitted by mpearc4
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Category: Business and Industry
Date Submitted: 10/02/2012 07:53 AM
CHEVRON
Company Analysis Project
CHEVRON
Company Analysis Project
Table of Contents
Executive Summary 2
Purpose of Analysis 2
Major Findings 2
Competitive Environment of the Firm 3
Overview of the firm 3
Information about the firm 3
Quality of management 3
Overview of the economy 4
General economic forecasts 4
Overview of the industry 4
Actual and potential competition 5
Rivalry among existing firms 5
Threat of new entrants 6
Substitute products or services 6
Relative bargaining power 6
Bargaining power of buyers 6
Bargaining power of suppliers 6
Analysis of the Financial Statements 7
Functional analysis 7
Profitability 7
Efficiency in asset utilization 7
Leverage and liquidity 7
Functional analysis by segment 8
Cash flow analyses 9
Growth measures 9
Market measures 10
Projected Financial Statements 11
Assumptions for the forecasts 11
Analysis of pro forma statements 11
Implications for investment and creditworthiness 12
Valuation 13
DCF Valuation 13
Relative Valuation 13
Summary and Conclusions 14
Bibliography 15
Executive Summary
A. Purpose of Analysis
Over the past several months, we have analyzed Chevron on two major fronts: profitability and risk. The goal was to see what derived Chevron’s value. Using a three-step approach, we evaluated different aspects of the firm. First, we analyzed the competitive environment of the firm, assessing the industry from a 5-force perspective and understanding how economic fluctuations impacted profitability and risk. Then, we moved into financial statement analysis; evaluating margins, utilization, leverage, and growth prospects, among others things. Finally, we attempted to gauge Chevron’s value by forecasting financial statements using online sources (Bloomberg and Factset), analysts’ opinions, and our own sentiments.
B. Major Findings
1. The success of the integrated oil industry is linked heavily to prices of oil and natural gas. Because these prices...