MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

Name: Hoffman, Celeste (celestehoffman)

Project: ABP-1 – Financial Analysis

Task 1: Current Company Profile

1.1. Company Governance

Task 1.1 Corporate Governance

Company's legal company name Celanese Corporation
Company's trading exchange and ticker symbol NYSE; CE
Company's primary website URL https://www.celanese.com
Corporate Headquarters Location Irving, TX 75039
Mark C. Rohr; Executive
Most key executive & title Chairman and President
Company fiscal year end 12/31/2018
Company's full-time employees 7700
Industry Sector Basic Materials
Industry Classification Chemicals

Table 1 – Celanese Corporation Company Governance

(Sources: https://finance.yahoo.com/quote/CE/balance-sheet?p=CE &

https://investors.celanese.com/websites/celanese/English/1000/investor-relations.html Accessed
9/16/2019)

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 MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

1.2. Financial profile

Task 1.2 Financial Profile

Date of Financial Profile 9/15/2019
Current Share Price 125.49
Daily Volume 799,842
Average Daily Volume 930,566
52 Week Range (high and low) 82.91 - 127.15
1 Year Target Estimate 118.75
Forward Dividend and Yield N/A
Analyst Recommendation Hold
Current Market Capitalization 15,430,000,000
Company PE Ratio 15.68
Company Earnings Per Share (EPS) 8.01
Company's "Beta" 1.30
Percentage of Shares Owned by Insiders 0.61%
Percentage of Shares Owned by Institutions 105.70%

Table 2 – Celanese Corporation Financial Profile

(Source: www.finance.yahoo.com Accessed 9/15/2019)

1.3. Investment Assessment

The average daily volume of 930,566 is significantly higher than the daily volume of 799,842. Further, in
comparison to the 52-week range, the current share price of $125.49 is definitely on the higher end.
According to the summary page on www.finance.yahoo.com, the stock prices for Celanese Corporation
have been rising fairly steadily in the recent months, so it would not be advisable to buy. The stock for
Celanese Corporation is at a high point today compared to the last 6 months; this is one of the most
expensive days is has hit in that time frame. Because the stock price will most likely begin to fall soon, I
would recommend either holding the stock, if the person is privy to wait another cycle before selling, or
to sell the stock, as this is still quite a high point and a profit could easily be made.

(Source: www.finance.yahoo.com Accessed 9/16/2019)

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 MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

Task 2: Historical Stock Analysis and Fundamentals

2.1. Financial Metrics

Task 2.1 Historical Stock Analysis and Fundamentals (in millions except for historical data)
Closing Date ---> 12/31/2018 12/31/2017 12/31/2016
Balance Sheet Fundamentals
Cash and Cash Equivalents 415 557 620
Inventory 1,046 900 720
Total Current Assets 2,874 2,792 2,472
Total Assets 9,313 9,538 8,357
Accounts Payable 819 807 625
Total Current Liabilities 1,779 1,559 1,077
Total Liabilities 5,934 6,239 5,336
Capital Surplus 233 175 157
Total Stockholder Equity 2,984 2,887 2,588
Net Tangible Assets 1,617 1,583 1,598
Income Statement Fundamentals
Total Revenue 7,155 6,140 5,389
Gross Profit 1,972 1,511 1,405
Selling General and Administrative 606 451 416
Operating Income or Loss 1,270 967 902
Net Income 1,207 843 900
Cash Flow Statement Fundamentals
Total Cash Flow From Operating Activities 1,558 803 893
Change in Cash and Cash Equivalents -137 -62 -329
Historical Stock Price Data
Adjusted Stock Closing Price on Closing Date 88.48 103.25 74.54
Stock Volume on Closing Date 1226000.00 402300.00 439600.00

Table 3 – Celanese Corporation Financial Profile

(Source: www.finance.yahoo.com Accessed 9/16/2019)

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 MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

2.2. Media Perspectives

“Celanese Increases Prices of Acetyl Intermediates Products” – Zacks Equity Research

This article discusses the impact of Celanese Corporation’s decision to hike prices by up to $400/MT for
acetyl intermediates products like acetic acid, vinyl acetate, and acetic anhydride. According to the article,
Asia and mostly China will be affected by this price increase.

The article also suggests that Celanese Corporation may lose earnings because of this price increase; in
the past year, the industry’s shares overall have lost 0.9% while Celanese Corporation has lost 1.3%.
However, Celanese Corporation has been growing steadily since December of 2018 when their stocks, as
well as industry stocks in general, hit more than 22.7% of a loss. According to a graph in the article, it
looks as though the market shares are starting to decline while Celanese corporation is on a general
incline; the loss mentioned in the article is a small dip in comparison to the overall trend, though it might
signal an imminent decline. Celanese Corporation seems to have anticipated this, as they have more than
4,000 projects set to be completed in 2019.

Zacks Equity Research seems like a legitimate website which offers analysis of shares in various companies
as well as advising services for people looking for help with navigating the stock market.

(Source: www.zacks.com & www.finance.yahoo.com Accessed 9/16/2019)

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 MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

Task 3: Stock Graphical Analysis

3.1. Stock Price Analysis Table

Task 3.1 Historical Stock Price Analysis Table - adj. closing prices
CE EMN LYB
LyondellBasell
Closing Date Celanese Corporation Eastman Chemical Company Industries N.V.
December 29, 2017 $103.25 $88.20 $102.18
January 31, 2018 $104.29 $94.42 $111.00
February 28, 2018 $97.69 $96.23 $100.24
March 29, 2018 $97.06 $101.03 $98.80
April 30, 2018 $105.77 $97.68 $98.84
May 31, 2018 $109.90 $99.82 $104.82
June 29, 2018 $108.09 $96.15 $103.57
July 31, 2018 $115.50 $99.67 $104.45
August 31, 2018 $114.25 $93.33 $106.33
September 28, 2018 $111.48 $92.61 $97.51
October 31, 2018 $95.33 $75.81 $84.92
November 30, 2018 $99.26 $76.26 $88.76
December 31, 2018 $88.48 $71.35 $80.01

Table 4 – Celanese Corporation Stock Price Analysis Table

(Sources: www.finance.yahoo.com & www.google.com/finance Accessed 9/16/2019)

3.2. Competitive Stock Price Graph

Task 3.2 Competitive Stock Price Graph

$140.00
Adj Closing Price

$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00

Closing Date

Celanese Corporation Eastman Chemical Company LyondellBasell Industries N.V.

Figure 1 – Celanese Stock Price Analysis Chart

(Sources: www.finance.yahoo.com & www.google.com/finance Accessed 9/16/2019)

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 MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

Task 4: Assessing your stock

4.1. Fundamental numbers needed for Financial Ratios

Task 4.1 Fundamental Numbers Needed For Financial Ratios

Market Capitalization 15,430,000,000
Book Value of Equity (BV assets - BV liabilities) 3,379,000,000
Current Assets 2,874,000,000
Current Liabilities 1,779,000,000
Cash 415,000,000
Short Term Investments 31,000,000
Accounts Receivable 1,318,000,000
Outstanding Long Term Debt 2,827,000,000
Short Term Debt 343,000,000

Table 5 – Fundamental Numbers Needed For Financial Ratios

(Source: www.finance.yahoo.com Accessed 9/16/2019)

4.2. Acid Test

Acid Test = 0.9916

The acid test ratio for Celanese Corporation was found to be 0.9916. Because this number is less than 1,
Celanese Corporation must not have enough liquid assets to pay off their current liabilities. However,
this number is very close to 1, so the company is probably fine. Further, because Celanese Corporation
deals with selling chemicals and is therefore highly inventory-dependent, the company is probably not in
danger of going bankrupt. This number would be more meaningful if compared to other companies
within the same industry because business models can easily change the acid ratio; for example, an
inventory-dependent company may have an acid ratio lower than 1 (inventory is not a liquid asset, but
these companies gain a lot from their inventory so in their case it should be factored in) while tech
companies are notorious for having extremely high acid ratios.

(Source: https://www.investopedia.com/terms/a/acidtest.asp Accessed 9/16/2019)

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 MIS 111 – F19 – Applied Business Project 1 – Financial Analysis

4.3. Working Capital Ratio

Working Capital Ratio = 1.616

The Working Capital Ratio for Celanese Corporation was found to be 1.616. This number is greater than
1, suggesting moderately good short-term financial health and that the company is not looking at going
bankrupt. Major projects like the 4,000 projects that Celanese is projected to finish in 2019, can reduce
cash flow and therefore decrease the working capital ratio. However, the ratio should not be too high,
as that suggests that a business is not investing efficiently or may have too much inventory.

(Source: https://www.investopedia.com Accessed 9/16/2019)

4.4. Price-to-Book Ratio

Price-to-Book Ratio = 4.566

The price-to-book value, or P/B Value, for Celanese Corporation is 4.566. A number that is low,
especially less than 1, would signal that the company’s shares are being traded for a value much less
than their worth. Here, because the number is relatively large, it is clear that the shares are not being
undervalued. This suggests that the company is earning a good, even great, return on its assets. The
relatively high share price corroborates the idea that Celanese Corporation is earning a high return on its
assets. P/B ratio is not always useful in analyzing a business, but because Celanese Corporation is a
capital-intensive business, this analysis should hold true.

(Source: https://www.investopedia.com Accessed 9/16/2019)

4.5. Debt-to-Equity Ratio

Debt-to-Equity Ratio = 0.938

The Debt-to-Equity ratio measures the financial leverage of a company. For Celanese Corporation, the
ratio was determined to be 0.938. This ratio compares liabilities to shareholder’s equity in order to
determine whether the company is funding mainly through loans and borrowed funds or their own. A
higher ratio would suggest higher risk to shareholders because this would suggest that the company was
primarily running off borrowed funds. This low ratio of 0.938 suggests that Celanese Corporation would
be a lower risk to shareholders because they have enough equity to fund their operations and are not as
reliant on loans. A business that is more reliant on loans would be at a very high risk in the case of a
drop in business, but Celanese Corporation does not seem to fall into this category.

(Source: https://www.investopedia.com Accessed 9/16/2019)

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