Business Analyzer Worksheet

Name of Business: Luxxotica

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 owns most all sunglass wear. Sunglasses will never go out of style so they are very
durable.
2. Do you understand how the business product/service works?
If yes, describe how the product/service works.

2. Pass / Fail

Yes, the company has a lot of users who are loyal to them. I understand that the product works in ways
that involve summer mostly.
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

Luxottica rules this part of the market by dominating everyone with so many different varieties. I believe
they will still be pushing in 20 years.
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
.93

2007
1.07

2008
.83

2009
.69

2010
.87

2011
.98

2012
1.15

2013
1.14

2014
1.34

2015
1.65

Has companys EPS consistently gone up each year? No, it bounces around a lot
If not, was the weakness a one-time event? It was a 2 time event
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
Return on
Equity

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

19.85 20.35

20.91

15.17

11.86

13.27

14.27 13.41

14.18

15.98

5 -Year Average Return on Equity _16.594__

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
___1,688,000,000__

__792,000,000___ = _____2.131______

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)

Business Analyzer Worksheet

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 =
29.9

31.5

_____.95_____

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
#6
#7
#8
#9
#10
Competitive
Advantage
Understand
Business
Product/Service
Obsolete in
20 years
Earnings
Per Share (EPS)

Business Analyzer Worksheet

Return on
Equity
(ROE)
Debt
Free to Raise Prices
Large Cap. Exp
Needed
On Sale
Valuation

Pass
Pass
Pass
Pass
Pass
Pass
Pass
Pass
Pass
Undervalued
Fair valued

Fail
Fail
Fail
Fail
Fail
Fail
Fail
Fail
Fail
Overvalued