Business Analyzer Worksheet

Name of Business: _________Vera Bradley_____________________________

1. Does the company have an identifiable durable competitive advantage?
If yes, describe it in as simple a manner as you can.

1. Pass / Fail

This company used to have the most popularity and competitive advantage among other purse/backpack
brands. Though this brand is not the most popular, it is among the most popular and competitive purse
brands.

2. Do you understand how the business product/service works?

If yes, describe how the product/service works.

2. Pass / Fail

Vera Bradley makes purses/wallets/backpacks/key chains that have a very unique design that sets them
apart from other items like so.

3. Will the businesss product/service be obsolete in 20 years?

If no, explain why the product/service will not be obsolete in 20 years.

3. Pass / Fail

Most likely, yes. The style always changes, and Vera Bradley is already gradually fading into the
background of past styles.

4. What is the companys per share earning history and growth rate?
(Finding Information on morningstar.com)
EPS (Earnings Per Share) --- Type Ticker Symbol in Get QuoteFinancials
Year
EPS

2006
-----

2007
-----

2008
-----

2009
-----

2010
.66

2011
1.25

2012
1.43

2013
1.70

Has companys EPS consistently gone up each year? _no_____

If not, was the weakness a one-time event? __no____

2014
1.45

2015
.95

4. Pass / Fail

5. Is the company consistently earning a high return on equity?

(Finding Information on morningstar.com)
ROE for past ten years --- Key Ratios (will only show last 5 years)
Year

2006

2007

2008

Return on Eq

-----

-----

----

2009
40.8
5

2010
63.6
3

2011
64.97

2012
61.5
1

2013
43.2
8

2014
26.1
7

2015
14.25

Business Analyzer Worksheet

5 -Year Average Return on Equity __42.036______

Higher than 15%? ___yes____ 5. Pass / Fail

6. Does the company have a lot of debt?

6. Pass / Fail
Long-term debt in the current year of the business / Total net earnings in the current year of the business
____0___

___38,000,000______ = __0___

Long term debt should not be more than five times current net earnings
(Finding Information on morningstar.com)
Long Term Debt ---Financials - Balance Sheet --- (Click Annual tab at top; Look at current
year)
Total Net Income ---Financials - Income Statement (Click Annual tab at top; Look at
current year)
7. Is the company free to raise prices with inflation?

7. Pass / Fail

If the price of the product has risen on an average of at least 4% a year over the last twenty years, then
you can bet the farm that its the kind of business that can raise prices along with inflation.
8. Are large capital expenditures required to update plant and equipment?
(Does the product/service require expensive changes or upgrades?)

8. Pass / Fail

Price Analysis
9. Is the companys stock price suffering from a market panic, a business recession, or an individual
calamity that is curable?
9. Pass / Fail
10. Use this formula to determine if the business is undervalued, fair valued, or overvalued.
P/E Ratio (Price / Earnings) / 5-Year Annual Avg. of Net Income =
___18.8_______

____20.2______

___.93069_______

0 1 = Company is undervalued
10. Undervalued/Fair value/Overvalued
1 2 = Company is fair valued
2 3 = Company if overvalued
(Finding Information on money.msn.com/)
P/E Ratio --- Valuation Price/Earnings (1st Column)
Net Income 5 Year Average ---Valuation Price/Earnings (4th Column)

Business Scorecard:
#1

#2

#3

#4

#5

Competitiv
e
Advantage

Understan
d
Business

Product/Servic
e
Obsolete in
20 years

Earnings
Per Share
(EPS)

Return
on
Equity
(ROE)

Pass

Pass

Pass

Pass

Pass

#6

#7

#8

#9

#10

Debt

Free to
Raise
Prices

Large
Cap. Exp
Needed

On Sale

Valuation

Pass

Pass

Pass

Pass

Undervalue
d
Fair valued

Business Analyzer Worksheet

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Overvalued