AnalysisofFinancialStatements(英文版).pptx

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1、3 - 1Copyright 2001 by Harcourt, Inc.All rights reserved.nRatio analysisnDu Pont systemnEffects of improving ratiosnLimitations of ratio analysisnQualitative factorsCHAPTER 3 Analysis of Financial Statements3 - 2Copyright 2001 by Harcourt, Inc.All rights reserved.Balance Sheet: Assets2001E2000Cash85

2、,6327,282AR878,000632,160Inventories1,716,4801,287,360 Total CA2,680,1121,926,802Gross FA1,197,1601,202,950Less: Deprec. 380,120 263,160 Net FA 817,040 939,790Total assets3,497,1522,866,5923 - 3Copyright 2001 by Harcourt, Inc.All rights reserved.Liabilities and Equity2001E2000Accounts payable436,800

3、524,160Notes payable600,000720,000Accruals 408,000 489,600 Total CL1,444,8001,733,760Long-term debt500,0001,000,000Common stock1,680,936460,000Retained earnings (128,584) (327,168) Total equity1,552,352 132,832Total L & E3,497,1522,866,5923 - 4Copyright 2001 by Harcourt, Inc.All rights reserved.Inco

4、me StatementSales7,035,6005,834,400COGS5,728,0005,728,000Other expenses 680,000 680,000 EBITDA 627,600 (573,600)Depreciation 116,960 116,960 EBIT 510,640(690,560)Interest exp. 88,000 176,000 EBT 422,640 (866,560)Taxes (40%) 169,056 (346,624)Net income 253,584 (519,936)2001E20003 - 5Copyright 2001 by

5、 Harcourt, Inc.All rights reserved.Other Data2001E2000Shares out.250,000100,000EPS$1.014($5.199)DPS$0.220$0.110Stock price$12.17$2.25Lease pmts$40,000$40,0003 - 6Copyright 2001 by Harcourt, Inc.All rights reserved.nStandardize numbers; facilitate comparisonsnUsed to highlight weaknesses and strength

6、sWhy are ratios useful?3 - 7Copyright 2001 by Harcourt, Inc.All rights reserved.nLiquidity: Can we make required payments?nAsset management: Right amount of assets vs. sales?What are the five major categories of ratios, and what questions do they answer?3 - 8Copyright 2001 by Harcourt, Inc.All right

7、s reserved.nDebt management: Right mix of debt and equity?nProfitability: Do sales prices exceed unit costs, and are sales high enough as reflected in PM, ROE, and ROA?nMarket value: Do investors like what they see as reflected in P/E and M/B ratios?3 - 9Copyright 2001 by Harcourt, Inc.All rights re

8、served.Calculate DLeons forecasted current and quick ratios for 2001.CR01 = = = 1.85x.QR01 = = 0.67x.CACL$2,680$1,445$2,680 $1,716$1,445CA - Inv.CL3 - 10Copyright 2001 by Harcourt, Inc.All rights reserved.nExpected to improve but still below the industry average.nLiquidity position is weak.Comments

9、on CR and QR200120001999Ind.CR1.85x1.1x2.3x2.7xQR0.67x0.4x0.8x1.0 x3 - 11Copyright 2001 by Harcourt, Inc.All rights reserved.Inv. turnover = = 4.10 x.SalesInventories$7,036$1,716What is the inventory turnover ratio vs. the industry average?200120001999Ind.Inv. T. 4.1x4.5x4.8x6.1x3 - 12Copyright 2001

10、 by Harcourt, Inc.All rights reserved.nInventory turnover is below industry average.nDLeon might have old inventory, or its control might be poor.nNo improvement is currently forecasted.Comments on Inventory Turnover3 - 13Copyright 2001 by Harcourt, Inc.All rights reserved.ReceivablesAverage sales p

11、er dayDSO = = = = 44.9. DSO is the average number of days after making a sale before receiving cash.ReceivablesSales/360$878$7,036/3603 - 14Copyright 2001 by Harcourt, Inc.All rights reserved.Appraisal of DSOn DLeon collects too slowly, and is getting worse.n DLeon has a poor credit policy.200120001

12、999Ind.DSO 44.9 39.0 36.8 32.03 - 15Copyright 2001 by Harcourt, Inc.All rights reserved.F.A. and T.A. turnover vs. industry averageFixed assetsturnover Sales Net fixed assets= = 8.61x.$7,036$817Total assetsturnover Sales Total assets= = 2.01x.$7,036$3,4973 - 16Copyright 2001 by Harcourt, Inc.All rig

13、hts reserved.nFA turnover projected to exceed industry average. Good.nTA turnover not up to industry average. Caused by excessive current assets (A/R and Inv.) 2001 2000 1999Ind.FA TO 8.6x6.2x10.0 x7.0 xTA TO 2.0 x2.0 x2.3x2.6x3 - 17Copyright 2001 by Harcourt, Inc.All rights reserved.Calculate the d

14、ebt ratio, TIE, and EBITDA coverage ratios. Total debt Total assetsDebt ratio= = = 55.6%.$1,445 + $500$3,497 EBIT Int. expense TIE = = = 5.8x.$510.6$883 - 18Copyright 2001 by Harcourt, Inc.All rights reserved.EBITDA coverage = = 5.2x. EBITDA + Lease payments (in cash) Interest Lease Loanexpense pmt.

15、 repayments+ + $510.6 + $117.0 + $40 $88 + $40 + $03 - 19Copyright 2001 by Harcourt, Inc.All rights reserved.Too much debt, but projected to improve.How do the debt management ratios compare with industry averages?200120001999 Ind.D/A55.6% 95.4% 54.8% 50.0%TIE 5.8x -3.9x 3.3x 6.2xEBITDA coverage 5.2

16、x -3.3x 3.6x 8.0 x3 - 20Copyright 2001 by Harcourt, Inc.All rights reserved.Very bad in 2000, but projected to exceed industry average in 2001. Looking good.Profit margin vs. industry average?200120001999 Ind.P.M.3.6%-8.9%2.6% 3.5%P.M. = = = 3.6%. NI Sales$253.6$7,0363 - 21Copyright 2001 by Harcourt

17、, Inc.All rights reserved.BEP= = 14.6%.BEP vs. Industry Average? EBIT Total assets $510.6 $3,4973 - 22Copyright 2001 by Harcourt, Inc.All rights reserved.nBEP removes effect of taxes and financial leverage. Useful for comparison.nProjected to be below average.nRoom for improvement.200120001999Ind.BE

18、P14.6%-24.1% 14.2%19.1%3 - 23Copyright 2001 by Harcourt, Inc.All rights reserved.Return on AssetsROA= = 7.3%. Net income Total assets $253.6 $3,4973 - 24Copyright 2001 by Harcourt, Inc.All rights reserved.ROE = = 16.3%. Net income Common equity $253.6 $1,5522001 20001999Ind.ROA 7.3% -18.1% 6.0% 9.1%

19、ROE16.3%-391.4% 13.3%18.2%Both below average but improving.3 - 25Copyright 2001 by Harcourt, Inc.All rights reserved.nROA is lowered by debt-interest lowers NI, which also lowers ROA = NI/Assets.nBut use of debt lowers equity, hence could raise ROE = NI/Equity.Effects of Debt on ROA and ROE3 - 26Cop

20、yright 2001 by Harcourt, Inc.All rights reserved.Calculate and appraise the P/E, P/CF, and M/B ratios.Price = $12.17.EPS = = = $1.01.P/E = = = 12x. NI Shares out.$253.6250Price per shareEPS$12.17$1.013 - 27Copyright 2001 by Harcourt, Inc.All rights reserved.IndustryP/E ratioBanking 17.15Computer Sof

21、tware Services 33.01Drug 41.81Electric Utilities (Eastern U.S.) 19.40Internet Services* 290.35Semiconductors 78.41Steel 12.71Tobacco 11.59Water Utilities 21.84Typical industry average P/E ratios* Because many internet companies have negative earnings and no P/E, there was only a small sample of inte

22、rnet companies. 3 - 28Copyright 2001 by Harcourt, Inc.All rights reserved. NI + Depr. Shares out.CF per share = = $1.48.$253.6 + $117.0250 Price per share Cash flow per share P/CF = = = 8.21x.$12.17$1.483 - 29Copyright 2001 by Harcourt, Inc.All rights reserved. Com. equity Shares out.BVPS = = = $6.2

23、1.$1,552250 Mkt. price per share Book value per share M/B = = 1.96x.$12.17$6.213 - 30Copyright 2001 by Harcourt, Inc.All rights reserved.nP/E: How much investors will pay for $1 of earnings. High is good.nP/CF: How much investors will pay for $1 of cash flow. High is good.nM/B: How much paid for $1

24、of BV. Higher is better.nP/E and M/B are high if ROE is high, risk is low. 2001 20001999 Ind.P/E12.0 x-0.4x 9.7x14.2xP/CF8.21x-0.6x 8.0 x11.0 xM/B1.96x 1.7x 1.3x 2.4x3 - 31Copyright 2001 by Harcourt, Inc.All rights reserved.( )( )( ) = ROE x x = ROE.ProfitmarginTAturnoverEquitymultiplier NI SalesSal

25、esTA TA CE19992.6% x2.3x2.2 =13.3%2000-8.9% x2.0 x 21.6 = -391.4%20013.6% x2.0 x2.3 =16.3%Ind.3.5% x2.6x2.0 =18.2%3 - 32Copyright 2001 by Harcourt, Inc.All rights reserved.The Du Pont system focuses on:nExpense control (P.M.)nAsset utilization (TATO)nDebt utilization (Eq. Mult.)It shows how these fa

26、ctors combine to determine the ROE.3 - 33Copyright 2001 by Harcourt, Inc.All rights reserved.Simplified DLeon DataA/R878 Debt1,945Other CA1,802 Equity1,552Net FA 817Total assets $3,497 L&E$3,497Q. How would reducing DSO to 32 days affect the company?Sales $7,035,600 day 360= = $19,543.3 - 34Copyrigh

27、t 2001 by Harcourt, Inc.All rights reserved.Effect of reducing DSO from 44.9 days to 32 days:Old A/R= 19,543 x 44.9 = 878,000New A/R = 19,543 x 32.0 = 625,376 Cash freed up: 252,624Initially shows up as additional cash.3 - 35Copyright 2001 by Harcourt, Inc.All rights reserved.What could be done with

28、 the newcash? Effect on stock price and risk?New Balance SheetAdded cash$ 253 Debt$1,945A/R625 Equity1,552Other CA1,802Net FA 817Total assets$3,497 Total L&E$3,4973 - 36Copyright 2001 by Harcourt, Inc.All rights reserved.Potential use of freed up cashnRepurchase stock. Higher ROE, higher EPS.nExpand

29、 business. Higher profits.nReduce debt. Better debt ratio; lower interest, hence higher NI.nAll these actions would improve stock price.3 - 37Copyright 2001 by Harcourt, Inc.All rights reserved.What are some potential problems and limitations of financial ratio analysis?nComparison with industry ave

30、rages is difficult if the firm operates many different divisions.3 - 38Copyright 2001 by Harcourt, Inc.All rights reserved.n“Average” performance not necessarily good.nSeasonal factors can distort ratios.n“Window dressing” techniques can make statements and ratios look better.3 - 39Copyright 2001 by

31、 Harcourt, Inc.All rights reserved.nDifferent operating and accounting practices distort comparisons.nSometimes hard to tell if a ratio is “good” or “bad.”nDifficult to tell whether company is, on balance, in strong or weak position.3 - 40Copyright 2001 by Harcourt, Inc.All rights reserved.What are

32、some qualitative factors analysts should consider when evaluating a companys likely future financial performance?nAre the companys revenues tied to 1 key customer?nTo what extent are the companys revenues tied to 1 key product?nTo what extent does the company rely on a single supplier?(More)3 - 41Copyright 2001 by Harcourt, Inc.All rights reserved.nWhat percentage of the companys business is generated overseas?nCompetitionnFuture prospectsnLegal and regulatory environment