There are infinite tools to help determine whether a company is profitable or not. One of the most popular ratios is the “Return on Assets” (aka ROA). This score indicates how profitable a company is relative to its total assets. The Return on Assets for Restaurant Brands International Inc. (QSR) is 0.027844. This number is calculated by dividing net income after tax by the company’s total assets. A company that manages their assets well will have a higher return, while a company that manages their assets poorly will have a lower return.Successful traders are typically skilled at building highly disciplined trading systems. These systems that they create may range from very simple to highly complex. Traders may need to fine tune the system to suit their specific needs and goals. Finding a little edge can lead to big rewards when dealing with the stock market. It is important to remember that a trading system that works for one person may not work for another. Novice traders may realize how hard it is to actually bring home healthy returns. Acquiring the necessary knowledge may take a long time, but putting in the effort and doing all the homework may help give the trader an advantage over the long run. Many successful stock market traders will be the first ones to admit that finding success is not going to happen overnight. Staying disciplined and being able to learn from mistakes can also go a long way when dealing with the ever-changing equity market landscape.
The FCF Yield 5yr Average is calculated by taking the five year average free cash flow of a company, and dividing it by the current enterprise value. Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The average FCF of a company is determined by looking at the cash generated by operations of the company. The Free Cash Flow Yield 5 Year Average of Restaurant Brands International Inc. (QSR) is 0.030305. The FCF Yield currently stands at 0.038814.
Value Comp 1 / Value Comp 2
The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of Restaurant Brands International Inc. (QSR) is 44. A company with a value of 0 is thought to be an undervalued company, while a company with a value of 100 is considered an overvalued company. The VC1 is calculated using the price to book value, price to sales, EBITDA to EV, price to cash flow, and price to earnings. Similarly, the Value Composite Two (VC2) is calculated with the same ratios, but adds the Shareholder Yield. The Value Composite Two of Restaurant Brands International Inc. (QSR) is 39.
Value Composite Three (VC3) is another adaptation of O’Shaughnessy’s value composite but here he combines the factors used in VC1 with buyback yield. This factor is interesting for investors who’re looking for stocks with the best value characteristics, but are indifferent to whether these companies pay a dividend.
VC3 is the combination of the following factors:
As with the VC1 and VC2, companies are put into groups from 1 to 100 for each ratio and the individual scores are summed up. This total score is then put into groups again from 1 to 100. 1 is cheap, 100 is expensive. Restaurant Brands International Inc. (QSR) has a VC3 of 51.
Book to Market
Restaurant Brands International Inc. (QSR) has a book to market ratio of 0.099813. A ratio used to find the value of a company by comparing the book value of a firm to its market value. Book value is calculated by looking at the firm’s historical cost, or accounting value. Market value is determined in the stock market through its market capitalization.
Book-to-Market Ratio= Common Shareholders Equity/Market Cap
Most investors are more familiar with P/B or Price-to-book. This is just the inverted value.
Price-to-Book Ratio=Market Cap/Common Shareholders Equity
Price to Sales
In the original edition of ‘What works on Wall Street’, O’Shaughnessy wrote that the single-best value factor was a company’s price-to-sales ratio (P/S). In his latest edition the P/S continues to perform well, but it was unseated by the value composites and EBITDA/EV due to 2 reasons: (1) A broader scope of analysis by using deciles and (2) two very bad years for P/S, e.g. 2007 and 2008.
A stock’s P/S is similar to its P/E ratio, but it measures the price of the company against its annual sales instead of earnings.
It’s calculated as follows:
Price-to-Sales Ratio = Market Cap/Net Sales or Revenues
Restaurant Brands International Inc. (QSR) has a price to sales ratio of 3.428828.
Price to Earnings
This is undoubtedly the most popular value factor and for many investors the one true faith. It compares the price you pay per share compared to the earnings during the last 12 months. It’s calculated as follows:
Price-to-Earnings Ratio = Share Price/Diluted EPS excluding extra items
The P/E ratio for Restaurant Brands International Inc. (QSR) is 32.538717.
Restaurant Brands International Inc. (QSR) currently has an Altman Z score of 1.19003. The Z-Score for predicting bankruptcy was published in 1968 by Edward I. Altman, who was assistant professor of finance at New York University at that time. It measures the financial health of a company based on a set of income and balance sheet values. The Altman Z-Score predicts the probability that a firm will go bankrupt within 2 years. In its initial test, the Altman Z-Score was found to be 72% accurate in predicting bankruptcy two years before the event. In a series of subsequent tests, the model was found to be approximately 80%–90% accurate in predicting bankruptcy one year before the event.
Market watchers may also be following some quality ratios for Restaurant Brands International Inc. (QSR). Robert Novy-Marx, a professor at the university of Rochester, discovered that gross profitability – a quality factor – has as much power predicting stock returns as traditional value metrics. He found that while other quality measures had some predictive power, especially on small caps and in conjunction with value measures, gross profitability generates significant excess returns as a stand alone strategy, especially on large cap stocks.The Gross profitability for (QSR) is 0.144718.
The stock market can be influenced by many different factors such as news, politics, earnings reports, or even company rumors. Often times the market may not react as expected to certain events. This may cause the investor to become frustrated at times. Sometimes certain market moves may seem to go against prevailing logic. This is why it can be extremely hard to predict near-term moves with any certainty. Taking a big picture look at the financial markets may help offer a clearer picture of how all the different aspects contribute to market movements. Figuring out why a certain move happened may help shed some light when the same scenario arises again in the future.
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