Waste Management Inc.
BUAD 341.01, 1PM-2PM MWF
Randall Warfield
May 1st, 2015
Table of Contents
Introduction
Theme
History of the Firm
Product Line of the Company
Industry History and Analysis
Major Competitors
NACIS Numbers
Relative Sales
Relative Returns
Product Life Cycle
Stock Performance
Financial Analysis
Ratio Analysis
Pro forma
Sources and Uses Analysis
Assumptions
Asset Acquisitions
Financing Needs
Conclusion
Appendices
Income Statement
Balance Sheet
Sources and Uses
Percentage of Sources and Uses
Firm Ratios
Industry Ratios
Bibliography
Introduction
This is a historical and future financial analysis of Waste Management Inc. This paper provides a vision on Waste Management Inc. and compares this company to the rest of its competitors in its industry. Included in this report is a three year forecasting vision on where Waste Management Inc. is headed financially in its industry.
Theme
Waste Management Inc. is in the process of the keeping a firm grip on the Environment and Waste Management Industry. Being the top company in this industry[1], Waste Management Inc. has been focused on buying more equipment and supplying more services to increase their revenue. It is clear that Waste Management Inc. has incurred more debt every year but few know why. Waste Management Inc. has been purchasing a percentage of interest in other companies and also has been using their money to provide new services.[2]
One of their new services is a waste-to-energy service that will supply 400,000 homes in the area of their 110 landfills with energy[3]. The company’s biggest revenue income comes from waste collection, which is not hard to see by the Waste Management Inc. truck and containers can be seen in the big cities. Companies like Waste Management Inc. have caused a high barrier of entry due to the firm grip the company has on the industry. When looking at the Receivable turnover rate it is obvious that Waste Management Inc. has a high receivable turnover ratio.
History of the Firm
In 1987, Waste Management Inc. was formed under the name USA Waste Services and in 1995 the company was reincorporated as a Delaware Company. In 1998, USA Waste Services changed their name to Waste Management after merging with and becoming the parent company of an Illinois based waste service company. During mid-2009, Waste Management changed its ticker symbol from WMI to WM.
In 2010, Waste Management Inc. invested in a waste-to-biofuel company called Enerkem. PepsiCo and Waste Management Inc. joined together to increase USA beverage containers from 34% recycling to 50% recycling by 2018. Waste Management Recycling, wholly-owned subsidiary of Waste Management, acquired three new recycling facilities. In 2011, Waste Management Inc. acquired Oakleaf Global Holdings and its primary operations for $425 Million. In 2014, Waste Management Inc. agreed to sell Wheelabrator Technologies to Energy Capital Partners for $1.94 billion in cash.[4]
Product Line of the Company
Waste Management Inc. offers a variety of services that has helped increase their profit as a company. The variety of services they offer has helped them become the top waste management company at least in the United States. Waste Management Inc. offers waste pick up, which based off the company that they are providing waste pick for, they offer a pick up program that will meet that company’s needs. They offer medical waste pick up which makes medical waste disposal more convenient for companies that have such waste. Another service that Waste Management Inc. offers. is renting out their dumpsters to construction companies. [5]