Financial Analysis of Syngenta Corporation-Samples for Students

Question: Make Financial Analysis of the Company Syngenta over the last 6 years and reformulated balance sheet, Income Statement, Cash Flow Statement and Equity Statement. Answer: Introduction Syngenta Corporation wants to improve the user experience of the solutions it delivers, and enjoy the resulting improvement in customer experience, but very few use Business process financials to improve user experience. This is an interesting disconnect, as many product and services teams have been using Business process financials in their Systems processes for years. Yet Business process financials has hardly ever made its way over to the Syngenta Corporation department. A strong purpose or a clear goal can be the most powerful trigger for project management. The purpose may be borne out of necessity, as with the galvanizing need for a startup to grow or die, or the "all hands on deck" response to a crisis (for example, BP's response to the Syngenta Corporation spill). It may be driven by a strong belief in the need for change (for example, the open-source movement). In many cases, project management through purpose and intent is catalyzed by a single person who personifies an inspiring vision or a stretch goal. Forecasted financials of Syngenta Corporation FORECAST (Mean) FY Dec-17 FY Dec-18 FY Dec-19 FY Dec-20 Income Statement REVENUE 13,380 13,995 14,643 15,377 YoY Growth % 4.6% 4.6% 4.6% 5.0% COST OF GOODS SOLD 6,696 7,014 7,468 7,718 YoY Growth % 2.9% 4.7% 6.5% 3.3% GROSS INCOME 6,488 6,748 7,278 7,895 YoY Growth % 3.3% 4.0% 7.9% 8.5% GROSS PROFIT MARGIN 48.8% 48.9% 49.1% 50.6% YoY Growth -0.3% 0.1% 0.2% 1.5% RD EXPENSE 1,202 1,220 1,327 1,398 YoY Growth % -7.5% 1.5% 8.8% 5.4% SELLING MARKETING EXPENSE 2,214 2,319 2,362 2,453 YoY Growth % 4.6% 4.7% 1.8% 3.9% GENERAL ADMIN EXPENSE 869.85 906.20 814.00 840.00 YoY Growth % 7.0% 4.2% -10.2% 3.2% SGA EXPENSE 2,923 3,011 - - YoY Growth % -0.2% 3.0% - - EBITDA 2,864 3,077 3,242 3,570 Margin% 21.4% 22.0% 22.1% 23.2% EBITDA PER SHARE 30.62 33.01 35.17 - YoY Growth % 5.7% 7.8% 6.5% - EBITDA REPORTED 2,652 2,931 3,214 3,638 Margin% 19.8% 20.9% 21.9% 23.7% DEPRECIATION 448.40 465.80 436.67 351.50 YoY Growth % 12.9% 3.9% -6.3% -19.5% AMORTIZATION 146.00 95.30 149.33 224.00 YoY Growth % -44.9% -34.7% 56.7% 50.0% DEPRECIATION AMORTIZATION 555.00 571.00 544.00 554.00 YoY Growth % -16.2% 2.9% -4.7% 1.8% EBIT 2,249 2,454 2,623 2,955 Margin% 16.8% 17.5% 17.9% 19.2% OPERATING EXPENSE 4,150 3,880 - - YoY Growth % -1.9% -6.5% - - INTEREST EXPENSE 221.14 215.00 172.00 139.00 YoY Growth % -24.0% -2.8% -20.0% -19.2% OPERATING PROFIT 2,193 2,351 - - Margin% 16.4% 16.8% - - EBITA 2,101 2,349 2,516 3,018 Margin% 15.7% 16.8% 17.2% 19.6% PRE-TAX PROFIT 2,000 2,213 2,358 2,540 Margin% 14.9% 15.8% 16.1% 16.5% PRE-TAX PROFIT REPORTED 1,837 2,092 2,388 2,700 Margin% 13.7% 14.9% 16.3% 17.6% TAX PROVISION 318.29 363.00 437.75 464.00 YoY Growth % 17.9% 14.0% 20.6% 6.0% TAX RATE 16.3% 16.9% 16.5% 16.9% YoY Growth 1.6% 0.6% -0.5% 0.4% NET INCOME 1,667 1,835 1,992 2,230 Margin% 12.5% 13.1% 13.6% 14.5% NET INCOME REPORTED 1,522 1,732 2,000 2,230 Margin% 11.4% 12.4% 13.7% 14.5% CASH EPS 24.27 27.11 27.58 - YoY Growth % -0.1% 11.7% 1.7% - EARNINGS PER SHARE 18.23 20.08 21.90 25.40 YoY Growth % 7.0% 10.1% 9.1% 16.0% EARNINGS PER SHARE REPORTED 17.08 19.24 21.79 23.80 YoY Growth % 33.5% 12.7% 13.3% 9.2% NUMBER OF SHARES OUTSTANDING 91.70 91.67 91.45 90.75 YoY Growth % -0.4% 0.0% -0.2% -0.8% DIVIDEND PER SHARE 11.81 12.72 13.33 17.27 YoY Growth % 4.4% 7.7% 4.8% 29.5% Balance Sheet INVENTORY 4,134 4,316 4,584 4,816 YoY Growth % 6.4% 4.4% 6.2% 5.1% CURRENT ASSETS 12,554 13,854 14,452 16,238 YoY Growth % 10.6% 10.4% 4.3% 12.4% GOODWILL 2,042 2,066 2,379 1,930 YoY Growth % 7.8% 1.1% 15.2% -18.9% TOTAL ASSETS 20,213 21,384 21,389 24,141 YoY Growth % 6.0% 5.8% 0.0% 12.9% CASH AND MARKETABLE SECURITIES 2,560 3,542 4,028 5,421 YoY Growth % 99.3% 38.4% 13.7% 34.6% CURRENT LIABILITIES 5,971 6,147 6,093 6,371 YoY Growth % -4.7% 2.9% -0.9% 4.6% NET DEBT 968.77 206.95 55.23 -3,074.00 YoY Growth % -68.8% -78.6% -73.3% -5666.1% SHAREHOLDERS EQUITY 9,318 10,316 10,395 13,029 YoY Growth % 17.2% 10.7% 0.8% 25.3% NET ASSET VALUE 9,461 10,456 10,986 13,223 YoY Growth % 18.3% 10.5% 5.1% 20.4% NET ASSET VALUE PER SHARE 102.40 123.00 146.40 - YoY Growth % - 20.1% 19.0% - BOOK VALUE PER SHARE 90.86 98.67 110.41 - YoY Growth % 4.9% 8.6% 11.9% - TANGIBLE BOOK VALUE PER SHARE - - - - ENTERPRISE VALUE 42,846 42,169 41,692 36,427 YoY Growth % 6.9% -1.6% -1.1% -12.6% Cash Flow Statement INCOME TAXES PAID - - - - CASH FLOW FROM OPERATIONS 2,228 2,299 2,295 2,693 YoY Growth % 23.3% 3.2% -0.2% 17.4% CAPITAL EXPENDITURES 598.78 626.41 662.53 648.00 YoY Growth % 7.5% 4.6% 5.8% -2.2% CASH FLOW FROM INVESTING -549.67 -567.33 -698.00 - YoY Growth % -5.5% -3.2% -23.0% - TOTAL DIVIDENDS 574.00 953.80 1,257 1,168 YoY Growth % -44.8% 66.2% 31.8% -7.1% CASH FLOW FROM FINANCING -471.20 -454.33 -100.00 - YoY Growth % 58.4% 3.6% 78.0% - CASH FLOW PER SHARE 20.76 23.43 26.27 - YoY Growth % 5.5% 12.8% 12.1% - FREE CASH FLOW 1,695 1,741 1,813 2,045 YoY Growth % 35.6% 2.7% 4.1% 12.8% FREE CASH FLOW PER SHARE 13.38 13.49 19.37 - YoY Growth % -1.7% 0.8% 43.6% - NET WORKING CAPITAL 5,117 5,384 5,669 5,971 YoY Growth % - 5.2% 5.3% 5.3% Valuation Metrics ORGANIC SALES GROWTH 2.3% 5.0% 4.8% 4.8% YoY Growth 2.9% 2.7% -0.2% 0% PRICE/SALES RATIO 3.3% 3.2% - - YoY Growth 0.2% -0.1% - - RETURN ON ASSETS 9.8% 10.3% 11.1% 9.7% YoY Growth 1.5% 0.6% 0.8% -1.4% RETURN ON EQUITY 19.8% 20.1% 19.8% 15.6% YoY Growth 0.6% 0.3% -0.3% -4.2% RETURN ON CAPITAL EMPLOYED 18.5% 20.6% 22.7% 24.0% YoY Growth 1.9% 2.1% 2.2% 1.3% RETURN ON INVESTED CAPITAL 21.9% 22.5% 19.7% - YoY Growth -4.5% 0.7% -2.8% - Through its use of empathy, brainstorming, iteration and collaboration, Business process financials can improve the user experience, and therefore the customer experience, of Syngenta Corporation-provisioned systems. Syngenta Corporation should follow the example set by product teams in seeking to improve overall customer experience. Although organizations may not be able to successfully manufacture purpose where it doesn't naturally exist, they can get better at recognizing it and acting on it when it does arise. The first person to spot the potential of a new trend or technology may not be an executive or even a dedicated "innovator," but may be an employee who has encountered the technology elsewhere and sees how it can be relevant to the Syngenta Corporation. (Incidentally, these are often the "troublemakers" constantly plaguing Syngenta Corporation with questions such as, "If I can do this at home, why can't I do it here?") When a company has a way to identify and encourage these individuals, it can tap into the power of purpose- or intent-driven project management that such individuals embody. Many e-business or social media initiatives have been germinated in this way and grown to become a full-scale business function or capability. As these ideas may arise from various people in different areas of the Syngenta Corporation, there is often value in a lightweight process (for example, create a submission to an incubation program) to help people know what to do when they spot an opportunity for purpose-driven project management. To strengthen your purpose and intent project management pillar: Emphasize an innate purpose within your Syngenta Corporation and industry that will resonate emotionally with employees. A good strategy is to focus on the value to customers or citizens (for example, for an insurance company, helping people lead healthier, worry-free lives). Seek out employees with a passion or goal that is relevant to the business. Provide them with the support and resources to incubate and prove their idea, protected from the bureaucracy and "white blood cells" of regular development channels Business process financials requires the System to walk a mile in the user's shoes. User-centered Systems is an angle on this, but Business process financials goes further, requiring true empathy with the user. This level of understanding can only be created by observation, and data-driven Systems is a core tenet of Business process financials. Business process financials also requires a collaborative, open and iterative approach. Agile Systems methodologies employ such a model, but Business process financials adds an unrestricted, "no harm, no foul" brainstorming activity, where many ideas are tossed around, no ideas are "bad ideas," and people are encouraged to think creatively with no penalty. Depending on the existing culture of the Syngenta Corporation, this may not be easy to implement and may require a great deal of change management to accomplish. The biggest divergence of Business process financials from traditionally engineered Syngenta Corporation solutions is the approach to the problem. Syngenta Corporation solutions typically solve a problem. The problem is narrow in scope to ensure a solution. Business process financials doesn't focus on solving a problem it focuses on reaching a goal. This subtle shift opens up the opportunity space, and allows Systems to derive more creative solutions than they otherwise would constrained by the bounds of traditional problem solving. The result is a set of Syngenta Corporation solutions that exceed customer needs, delivered in a way that delights the customer. The solutions delivered via Business process financials will have a better fit with customer needs, but will also incorporate many unanticipated or future needs. Business process financials isn't new. Certain aspects can be traced back to the industrial revolution. The Bauhaus, a German art school that operated from 1919 to 1933, created the concept of the "craftsman-artist," a founding principle of modern Systems. Business process financials has been used in many product companies since the mid-1990s. Most notable is Apple, which revolutionized and disrupted many industries with the advent of the iPod, iPhone and iPad products. But Business process financials wasn't applied broadly to Syngenta Corporation until 2012, when software vendors started to adopt its concepts and methodologies, train their developers, and modify their software development processes to reflect a Systems-thinking approach. Definition Business process financials has many definitions. In fact, there are so many definitions floating around that the concept has become muddied. No single definition fits all purposes. In this research note, we present several of the leading definitions of Business process financials. Tim Brown, CEO of Ideo, defines Business process financials as an approach that uses the System's sensibility and methods for problem solving to meet people's needs in a technologically feasible and commercially viable way. It is human-centered project management. Business process financials is a method for driving strategic change by: Supporting the building of ideas and "outside-in" thinking Taking risks at early stages failing fast Understanding customers and their goals, behaviors and values Testing and prototyping ideas early, and instilling an active feedback loop Challenging a product or service's usability, feasibility or perceived value Business process financials is ideal for coming up with new approaches; new ways of doing stuff. It's about making the right product that satisfies the user to the maximum extent. Key to Business process financials is to focus on a goal, not on solving a problem. One common exercise (the Vase Exercise) used at the start of Systems-thinking training is to ask students to Systems "the thing that holds flowers on a table." The results are a collection of traditional vases, with minor variations on the theme. Next, the students are asked to Systems a "better way to enjoy flowers." When presented with that goal the designs become very creative, often not resembling a traditional vase at all. Pursuit of a goal versus solving a problem is the key difference. One of the best sources of thought leadership in Business process financials is the Hasso Plattner Institute of Systems at Stanford (the " d.school "), which subscribes to the following steps for Business process financials: Understand: Research and become familiar with the subject matter. Subject-matter experts may be employed here, but real users are also used as sources of information. Persona and stories are good tools to use to further flesh out the area, as well as to continue to test future potential solution sets. Observe: Actively observe the environment, the subject and interactions. Record activities via a variety of mechanisms, including laboratory studies and field-based studies. Iterate back to the "Understand" phase until the subject space is thoroughly explored. Define point of view: Consider multiple points of view to flesh out the problem and to provide alternate paths to the goal. Here is where the problem is defined, key insights are identified, and Systems principles established. Iterate back to the "Observe" phase to validate the points of view with actual observation, and to the "Understand" phase to validate alignment with persona and stories. Ideate: Brainstorm, generating lots of ideas without criticism. Traditional brainstorming methods (for example, colored sticky notes) can be used here. Choose a solution set. Iterate back to the "Define Point of View" phase to validate alignment with points of view. Prototype: Rapidly develop prototypes. Initially, generate low-fidelity prototypes and evolve to high-fidelity prototypes. Iterate back to the "Ideate" phase to validate the prototypes' fit for purpose and back to the "Define Point of View" phase to assure alignment. Test: Test the proposed solution and validate its fit for purpose. Iterate back to the "Prototype" phase to modify and improve the prototype(s) based on results of the testing. Iterate back to the "Define Point of View" phase to assure alignment. This d.school process has multiple iteration loops. Business process financials itself is an iterative process. This process, with some variants, is common in Systems-thinking programs and in Systems courses of major universities. In fact, Business process financials is taught in over 100 higher education institutions and also in some K-12 schools. Business process financials has its detractors, however. Bruce Nussbaum, historically a huge advocate of Business process financials, calls it a "failed experiment." The biggest issue that Nussbaum identifies with Business process financials is that companies have turned it "into a linear, gated, by-the-book methodology that delivered, at best, incremental change and project management." This "processization" of Business process financials, avoiding the messiness that is inherent in true Business process financials, is something to be avoided. It is a process, but not a "cookie cutter" process, that adheres to the constraints of a well-defined, repeatable business process. It is creation, and true creation is messy. Adoption of Business process financials is not easy. It requires a change in Systems and development philosophy, perhaps even a change in culture. These changes can be quite difficult to accomplish, and because of this a large number of Systems-thinking efforts will fail, especially in the first iteration. This does not mean that enterprises should avoid the effort. With the right change management, and a lot of hard work, Business process financials can take hold in an enterprise and deliver very positive results. Conclusion Business process financials supports transformative, innovative and strategic change by: Driving shared commitment through collaboration Developing emotionally satisfying experiences through empathetic research Finding deeply felt insights through visualization Uncovering unexpected opportunities by asking new questions Building up powerful new ideas through the use of intuition and learning through prototyping Business process financials has proven to help organizations identify and create new opportunities for themselves, their stakeholders and their customers. However, change is achieved through an Syngenta Corporation's willingness to adopt its culture to new ways of thinking, as well as its capacity to deliver results. Business process financials can accelerate this improvement in user experience in a big way. The application of good user-experience methodologies does not ensure that the end product will meet the needs of the user. The empathy that is part of Business process financials helps chart the course toward the correct goal, one that satisfies the user. References: Mason, O.U., Scott, N.M., Gonzalez, A., Robbins-Pianka, A., Blum, J., Kimbrel, J., Bouskill, N.J., Prestat, E., Borglin, S., Joyner, D.C. and Fortney, J.L., 2014. Metagenomics reveals sediment microbial community response to Syngenta Corporation oil spill.The ISME journal,8(7), pp.1464-1475. Lamendella, R., Strutt, S., Borglin, S., Chakraborty, R., Tas, N., Mason, O.U., Hultman, J., Prestat, E., Hazen, T.C. and Jansson, J.K., 2014. Assessment of the Syngenta Corporation oil spill impact on Gulf coast microbial communities.Frontiers in microbiology,5. King, G.M., Kostka, J.E., Hazen, T.C. and Sobecky, P.A., 2015. Microbial responses to the Syngenta Corporation oil spill: from coastal wetlands to the deep sea.Annual review of marine science,7, pp.377-401 Mason, O.U., Han, J., Woyke, T. and Jansson, J.K., 2014. Single-cell genomics reveals features of a Colwellia species that was dominant during the Syngenta Corporation oil spill.Frontiers in microbiology,5 Wilson, M.J., Frickel, S., Nguyen, D., Bui, T., Echsner, S., Simon, B.R., Howard, J.L., Miller, K. and Wickliffe, J.K., 2015. A targeted health risk assessment following the Syngenta Corporation oil spill: polycyclic aromatic hydrocarbon exposure in Vietnamese-American shrimp consumers.Environmental Health Perspectives (Online),123(2), p.152 Wiens, J.A., 2015. Review of an ecosystem services approach to assessing the impacts of the Syngenta Corporation Oil Spill in the Gulf of Mexico Dubansky, B., Whitehead, A., Miller, J.T., Rice, C.D. and Galvez, F., 2013. Multitissue molecular, genomic, and developmental effects of the Syngenta Corporation oil spill on resident Gulf killifish (Fundulus grandis).Environmental science technology,47(10), pp.5074-5082 Gutierrez, T., Singleton, D.R., Berry, D., Yang, T., Aitken, M.D. and Teske, A., 2013. Hydrocarbon-degrading bacteria enriched by the Syngenta Corporation oil spill identified by cultivation and DNA-SIP.The ISME journal,7(11), p.2091 Rodriguez-r, L.M., Overholt, W.A., Hagan, C., Huettel, M., Kostka, J.E. and Konstantinidis, K.T., 2015. Microbial community successional patterns in beach sands impacted by the Syngenta Corporation oil spill.The ISME journal