财务分析与证券定价(英文)chapter11(34页PPT).pptx

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1、Chapter11TheAnalysisofProfitabilityLinksWhatyouwilllearnfromthischapterHowreturnoncommonequity(ROCE)isbrokendownintoitsdriversHowfinancialleverageaffectsshareholderprofitabilityHowoperatingliabilityleverageaffectstheprofitabilityofoperationsThedifferencebetweenReturnonNetOperatingAssets(RNOA)andRetu

2、rnonAssets(ROA)HowprofitmarginsandassetturnoversdriveRNOAHowborrowingcostsareanalyzedHowprofitabilityanalysisisusedtoask“whatif”questionsinsensitivityanalysisTheFocus:Accounting-BasedValuationThetaskistodeterminepremiumsoverbookvalue(orequivalently,theP/Bratio)WhatwillfutureROCEbe?Whatwillbethegrowt

3、hinthefuture?Pointofdeparture:CurrentROCEandgrowthHowwillfutureROCEandgrowthbedifferentfromcurrentROCE?ThischapteranalyzescurrentprofitabilityThenextchapteranalyzesgrowthForecastingandtheAnalysisofCurrentProfitability1.Establishthepresent:Analysisofprofitability(inthischapter)Determinethecurrentprof

4、itability(ROCE)andthefactorsthatinfluencetheprofitability2.Determinetransitionfrompresenttofuture:Projectingfutureprofitability(inPartIII)DeterminefactorsthatinfluencefutureprofitabilityanddescribehowthefuturewillbedifferentfromthepresentThesecorrespondtosteps2and3offundamentalanalysisThereformulati

5、onofthebalancesheetandincomestatementhasputthemintoaformtocarryoutstep2andtousethemtoforecastthefutureinstep3CuttingtotheCore:ROCEDriversROCEisdecomposedintodriversoverthreelevelsofanalysis:1.EffectsofLeverage1.AnalysisofOperatingProfitability1.AnalysisofNetBorrowingCostsDuetoformattingrestrictions,

6、pleasemanuallyreplacethispagewithhardcopyofslidefromfile:windows nameanalys1.ppt dos nameFirst-LevelBreakdown:AnalysisofEffectsofFinancialLeverage(FLEV)So,ROCEisaweightedreturntooperatingactivitiesandfinancingactivities:or,RNOA=OI(Aftertax)/NOA(ReturnonNetOperatingAssets)FLEV=NFO/CSE(FinancialLevera

7、ge)NBC=NFE(aftertax)/NFO(NetBorrowingCost)SPREAD=RNOANBC(OperatingSpread)SpreadHowFinancialLeverageExplainstheDifferenceBetweenROCEandRNOAFinancialLeverage:GeneralMills,Inc.GeneralMills,alargemanufacturerofpackagedfoods,hashadconsiderablestockrepurchasesovertheyears.Attheendoffiscal1998commonshareho

8、lderequitywasonly$190.2milliononnetoperatingassetsof$2.251billion.Itsfinancialleveragewasahuge5.745,basedonaveragebalancesheetamounts.ThefirmsROCEfor1998was121.6%.Furtheranalysisrevealsthatthisveryhighnumberisdrivenbythehighleverage:ROCE=RNOA+FLEVx(RNOANBC)121.6%=21.6%+5.745x(21.6%4.2%)ROCEcanexagge

9、rateunderlyingoperationalprofitability:RNOAis21.6%butthehighfinancialleverage,combinedwithaSPREADoveraborrowingcostof4.2%,yieldsamuchhigherROCE.BewareoffirmsboastinghighROCE:isitdrivenbyfinancialleverage?AWhat-IfQuestion:WhatiftheRNOAatGeneralMillsfellto3%?WhatwouldbetheeffectonROCE?Theansweristhatt

10、heROCEwouldfallto-3.9%:-3.9%=3.0%+5.745x(3.0%4.2%)TheunfavorableleveragewouldproduceanegativeROCEonapositiveRNOA.MicrosoftCorphasbeenveryprofitable.Forfiscal1998thefirmreportedanROCEof36.3%onaveragecommonequityof$13.702billion.ButMicrosofthadnofinancingdebtotherthan$980millionofconvertiblepreferreds

11、tock.Andithadconsiderablefinancialassetsof$11.447billionfromcashgeneratedfromitsoperations.Thereturnonaveragenetfinancialassetswas8.0%(asignificantportionfromunrealizedgainsonfinancialassets).ThereportedROCEmaskstheprofitabilityofoperations:TheRNOAof179.4%isweighteddownbyreturnonfinancingactivitiesi

12、ntheoverallROCE.AWhat-IfQuestion:Microsofthasregularstockrepurchases.Infiscal1998thecompanyused$2.796billionofitsfinancialassetstorepurchasestock.WhatwouldtheROCEhavebeenhaditnotundertakenthestockrepurchase?Theanswer:With$2.796billionmoreinaveragefinancialassetsandcommonequity,theNFAtoCSEratiowouldh

13、avebeen0.863ratherthan0.835,andtheROCEwouldhavebeen:31.5%=179.4%0.863x(179.4%8.0%)Stockrepurchases(anddividends)increaseROCE.FinancialLeverage:Microsoft,Corp.TheEffectsofOperatingLiabilityLeverage(OLLEV)OperatingliabilitieslevertheReturnonNetOperatingAssetsWhatwouldbetheoperatingprofitabilitywithout

14、operatingliabilities?whereImplicitInterestonOperatingLiabilities=Short-termBorrowingRatexOperatingLiabilitiesTheEffectofOLLEV:whereRNOA=ROOA+(OLLEVxOLSPREAD)OperatingLiabilityLeverage:GeneralMills,Inc.GeneralMillshadaveragenetoperatingassetsof$2.310billionduringfiscal1998ofwhich$1.159billionwereinop

15、eratingliabilitiesotherthandeferredtaxesandpensionliabilities.Thusitsoperatingliabilityleverageratiowas0.50.Itsborrowingrateonitsshort-termnotespayablewas5.4%,or3.4%aftertax.Itreportedoperatingincomeof$499.6million,butapplyingtheafter-taxshort-termborrowingratetooperatingliabilitiesotherthandeferred

16、taxandpensionliabilities,thisoperatingincomeincludesimplicitafter-taxinterestchargesof$39.4million.So,Theeffectofoperatingliabilityleverageisfavorable:AWhat-IfQuestion:What-ifsuppliersweretochargetheshort-termborrowingrateof5.4%explicitlyforthecreditinaccountspayable.WhatwouldbetheeffectonROCE?Thean

17、swer:Probablynoeffect.Theinterestwouldbeanadditionalexpense.But,tostaycompetitive,thesupplierwouldhavetoreducepricesofgoodssoldtothefirmbyacorrespondingamountsothatthetotalpricecharged(inimplicitplusexplicitinterest)remainsthesame.Butsuppliermarketsmaynotworkasefficientlyasthissupposes,sofirmscanexp

18、loitoperatingliabilityleverage.ReturnonNetOperatingAssetsandReturnonAssetsProblemswithROA:FinancialassetsindenominatorFinancialincomeinnumeratorOperatingliabilitiesnotindenominatorNetincomeisnotcomprehensiveincomeMedianROAis7.0%MedianRNOAis10.3%RNOAandROAforSelectedFirms,1996FLEVandDebt-to-EquityRat

19、iosProblemswithDebt-to-Equityratio:Excludesfinancialassets(whicheffectivelydefeasedebt)IncludesoperatingliabilitiesMedianDebt-to-Equityis1.17MedianFLEVis0.40ReformulatedFinancialStatements:Nike,Inc.ReformulatedStatementsofCommonStockholdersEquityNike,Inc.1Cashandcashequivalentsaresplitbetweenoperati

20、ngcashandcashinvestments.2Someaccountspayableareinterestbearingbutthiscannotbediscovered.3Otherliabilitiesareprimarilylong-termdeferredendorsementpaymentsforpromotions.4Notespayableareinterestbearing.5Preferredstockislessthan$0.5million.ReformulatedBalanceSheetsNike,Inc.1Brokenoutfromsellingandadmin

21、istrativeexpensesinpublishedincomestatement.2Includedin“otherexpense”inincomestatement.Thenonrecurringchangesin1995and1994relatetoshutdownofcertainfacilities.3Marginaltaxratewas38.5%,38.5%and39.1%in1996,1995and1994,respectively.ReformulatedIncomeStatementsReformulatedFinancialStatements:ReebokIntern

22、ational,Ltd.ReformulatedStatementsofCommonStockholdersEquityReebokInternational,Ltd.1Cashandcashequivalentsdividedbetweenoperatingcashandcashinvestments.2Excludesdividendspayablewhichisincludedinstockholdersequity.ReformulatedBalanceSheetsReebokInternational,Ltd.1Brokenoutfromsellingandadministrativ

23、eexpensesinpublishedincomestatement.2Thechangein1995isduetoconsolidationandstreamliningoffacilitiesandtothesaleoftheAviasubsidiary.3Marginaltaxratewas35.4%,36.2%and36.9%for1996,1995and1994,respectively.ReformulatedIncomeStatementsFirstLevelBreakdownofROCE:Nike,Inc.andReebokIntl,Ltd.1.Operatingprofit

24、margin:Theprofitabilityofeachdollarofsales2.Assetturnover:Theabilitytogeneratesalesforagivenassetbase3.EffectoffinancialleverageSecond-LevelBreakdownofROCE:DriversofOperatingProfitabilityProfitMarginandAssetTurnoverCombinationsfor238Industries,1963-961234567Asset TurnoverTypicalLevelsforROCE,FLEV,OL

25、LEV,RNOA,PMandATOSource:Standard&PoorsCOMPUSTATThird-LevelBreakdownofROCE:ProfitMarginDriversPM=SalesPM+OtheroperatingincomePMby product or line of businessbenefitor expense?GM=SalesCostofSalesThird-LevelBreakdownofROCE:AssetTurnoverDriversSometimesothermeasuresareused:DaysinAcc.Receivable=Acc.Recei

26、vable/Avg.SalesperdayInventoryTurnover=CostofSales/Avg.InventoriesAcc.PayableTurnover=Purchases/Avg.Acc.PayableThird-LevelBreakdown:Nike,Inc.andReebokIntl,Ltd.What-IfQuestions:Nike,Inc.andReebokIntl,LtdThird-LevelBreakdown:AnalysisofNetBorrowingCostAnalysisofNetBorrowingCost:Nike,Inc.TheAnalystsChec

27、klistYoushouldbeabletodothefollowingafterreadingthischapter:CalculateratiosthatdriveROCEDemonstratehowratioscombinetoyieldtheROCEPerformacompleteprofitabilityanalysisonreformulatedfinancialstatementsPrepareaspreadsheetprogrambasedonthedesigninthischapterAnswer“What-If”questionsaboutafirmusingtheanal

28、ysisinthischapterYoushouldunderstandthefollowingfromthischapter:HowratiosaggregatetoexplainReturnonCommonEquity(ROCE)HoweconomicfactorsdetermineratiosHowfinancialleverageaffectsROCEHowoperatingliabilityleverageaffectsROCEThedifferencebetweenReturnonNetOperatingAssets(RNOA)andReturnonAssets(ROA)Howpr

29、ofitmargins,assetturnoversandtheircompositeratiosdriveRNOAHowborrowingcostsareanalyzedHowprofitabilityanalysiscanbeusedtoaskpenetratingquestionsregardingthefirmsactivities1、每一个成功者都有一个开始。勇于开始，才能找到成功的路。11月-2211月-22Monday,November 7,20222、成功源于不懈的努力，人生最大的敌人是自己怯懦。14:31:3014:31:3014:3111/7/2022 2:31:30 PM

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