经济学会计学原理原文.pptx

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1、A1:Summarize and report results of analysisA2:Appendix 17A:Explain the form and assess the content of a complete income statementAnalytical Learning Objectives第1页/共70页P1:Explain and apply methods of horizontal analysisP2:Describe and apply methods of vertical analysisP3:Define and apply ratio analys

2、isProcedural Learning Objectives第2页/共70页Application of analytical toolsInvolves transforming dataReduces uncertaintyBasics of AnalysisC 1第3页/共70页Internal UsersExternal UsersFinancial statement analysis helps users make better decisions.ManagersOfficersInternal AuditorsShareholdersLendersCustomersPur

3、pose of AnalysisC 1第4页/共70页Liquidity and EfficiencySolvencyProfitabilityMarketProspectsAbility to meet short-term obligations and to efficiently generate revenuesAbility to generate future revenues and meet long-term obligationsAbility to generate positive market expectationsAbility to provide finan

4、cial rewards sufficient to attract and retain financingBuilding Blocks of AnalysisC 2第5页/共70页Income StatementBalance SheetStatement of Stockholders EquityStatement of Cash FlowsNotesInformation for AnalysisC 2第6页/共70页To help me interpret our financial statements,I use several standards of comparison

5、.Intracompany Competitor Industry GuidelinesStandards for ComparisonC 3第7页/共70页Horizontal AnalysisTimeComparing a companys financial condition and performance across time.Tools of AnalysisC 4第8页/共70页Comparing a companys financial condition and performance to a base amountTools of AnalysisVerticalAna

6、lysisC 4第9页/共70页Measurement of key relations between financial statement itemsTools of AnalysisC 4第10页/共70页TimeNow,lets look at some ways to use horizontal analysis.Horizontal AnalysisC 4第11页/共70页Horizontal AnalysisHorizontal AnalysisCLOVER CORPORATIONComparative(Partial)Balance SheetDecember 31,200

7、720072006Dollar ChangePercent ChangeAssetsCurrent assets:Cash and equivalents12,000$23,500$Accounts receivable,net60,000 40,000 Inventory80,000 100,000 Prepaid expenses3,000 1,200 Total current assets155,000$164,700$Property and equipment:Land40,000 40,000 Buildings and equipment,net120,000 85,000 T

8、otal property and equipment160,000$125,000$Total assets315,000$289,700$C 4第12页/共70页Calculate Change in Dollar AmountDollarChangeAnalysis Period AmountBase PeriodAmount=Since we are measuring the amount of the change between 2006 and 2007,the dollar amounts for 2006 become the“base”period amounts.Com

9、parative StatementsP 1第13页/共70页Calculate Change as a PercentPercentChangeDollar Change Base Period Amount100=Comparative StatementsP 1第14页/共70页CLOVER CORPORATIONComparative(partial)Balance SheetDecember 31,2007 20072006Dollar ChangePercent Change*AssetsCurrent assets:Cash and equivalents12,000$23,50

10、0$(11,500)$(48.9)Accounts receivable,net60,000 40,000 Inventory80,000 100,000 Prepaid expenses3,000 1,200 1,800 Total current assets155,000$164,700$Property and equipment:Land40,000 40,000 -0.0 Buildings and equipment,net120,000 85,000 Total property and equipment160,000$125,000$Total assets315,000$

11、289,700$*Percent rounded to first decimal point.($11,500$23,500)100=48.9%$12,000$23,500=$(11,500)P 1第15页/共70页CLOVER CORPORATIONComparative(Partial)Balance SheetDecember 31,2007 20072006Dollar ChangePercent Change*AssetsCurrent assets:Cash and equivalents12,000$23,500$(11,500)$(48.9)Accounts receivab

12、le,net60,000 40,000 20,000 50.0 Inventory80,000 100,000 (20,000)(20.0)Prepaid expenses3,000 1,200 1,800 150.0 Total current assets155,000$164,700$(9,700)$(5.9)Property and equipment:Land40,000 40,000 -0.0 Buildings and equipment,net120,000 85,000 35,000 41.2 Total property and equipment160,000$125,0

13、00$35,000$28.0Total assets315,000$289,700$25,300$8.7*Percent rounded to first decimal point.P 1第16页/共70页第17页/共70页Trend AnalysisNow,lets look at trend analysis!P 1第18页/共70页Trend analysis is used to reveal patterns in data covering successive periods.TrendPercent Analysis Period Amount Base Period Amo

14、unt100=Trend AnalysisP 1第19页/共70页Berry ProductsIncome InformationFor the Years Ended December 31,Item20052004200320022001Revenues400,000$355,000$320,000$290,000$275,000$Cost of sales285,000 250,000 225,000 198,000 190,000 Gross profit115,000 105,000 95,000 92,000 85,000 2001 is the base period so it

15、s amounts will equal 100%.Trend AnalysisP 1第20页/共70页Berry ProductsIncome InformationFor the Years Ended December 31,Item20052004200320022001Revenues105%100%Cost of sales104%100%Gross profit108%100%Trend AnalysisP 1Item20052004200320022001Revenues400,000$355,000$320,000$290,000$275,000$Cost of sales2

16、85,000 250,000 225,000 198,000 190,000 Gross profit115,000 105,000 95,000 92,000 85,000 第21页/共70页Berry ProductsIncome InformationFor the Years Ended December 31,Item20052004200320022001Revenues145%129%116%105%100%Cost of sales150%132%118%104%100%Gross profit135%124%112%108%100%How would this trend a

17、nalysis look on a line graph?Item20052004200320022001Revenues400,000$355,000$320,000$290,000$275,000$Cost of sales285,000 250,000 225,000 198,000 190,000 Gross profit115,000 105,000 95,000 92,000 85,000 Trend AnalysisP 1第22页/共70页Trend AnalysisWe can use the trend percentages to construct a graph so

18、we can see the trend over time.P 1第23页/共70页VerticalAnalysisNow,lets look at some vertical analysis tools!Common-Size StatementsP 2第24页/共70页Calculate Common-size PercentCommon-size PercentAnalysis AmountBase Amount100=Financial StatementBase AmountBalance SheetTotal AssetsIncome StatementRevenuesComm

19、on-Size StatementsP 2第25页/共70页CLOVER CORPORATIONComparative(Partial)Balance SheetDecember 31,2007 Common-size Percents*2007200620072006AssetsCurrent assets:Cash and equivalents12,000$23,500$3.8%8.1%Accounts receivable,net60,000 40,000 Inventory80,000 100,000 Prepaid expenses3,000 1,200 Total current

20、 assets155,000$164,700$Property and equipment:Land40,000 40,000 12.7%Buildings and equipment,net120,000 85,000 Total property and equipment160,000$125,000$Total assets315,000$289,700$*Percent rounded to first decimal point.($12,000$315,000)100=3.8%($23,500$289,700)100=8.1%P 2第26页/共70页CLOVER CORPORAT

21、IONComparative(Partial)Balance SheetDecember 31,2007 Common-size Percents*2007200620072006AssetsCurrent assets:Cash and equivalents12,000$23,500$3.8%8.1%Accounts receivable,net60,000 40,000 19.0%13.8%Inventory80,000 100,000 25.4%34.5%Prepaid expenses3,000 1,200 1.0%0.4%Total current assets155,000$16

22、4,700$49.2%56.9%Property and equipment:Land40,000 40,000 12.7%13.8%Buildings and equipment,net120,000 85,000 38.1%29.3%Total property and equipment160,000$125,000$50.8%43.1%Total assets315,000$289,700$100.0%100.0%*Percent rounded to first decimal point.P 2第27页/共70页CLOVER CORPORATIONComparative(Parti

23、al)Balance SheetsDecember 31,2007 Common-size Percents*2007200620072006Liabilities and Shareholders EquityCurrent liabilities:Accounts payable67,000$44,000$21.3%15.2%Notes payable3,000 6,000 1.0%2.1%Total current liabilities70,000$50,000$22.2%17.3%Long-term liabilities:Bonds payable,8%75,000 80,000

24、23.8%27.6%Total liabilities145,000$130,000$46.0%44.9%Shareholders equity:Preferred stock20,000 20,000 6.3%6.9%Common stock60,000 60,000 19.0%20.7%Additional paid-in capital10,000 10,000 3.2%3.5%Total paid-in capital90,000$90,000$28.6%31.1%Retained earnings80,000 69,700 25.4%24.1%Total shareholders e

25、quity170,000$159,700$54.0%55.1%Total liabilities and shareholders equity315,000$289,700$100.0%100.0%*Percent rounded to first decimal point.P 2第28页/共70页CLOVER CORPORATIONComparative Income StatementsFor the Years Ended December 31,2007Common-size Percents*2007200620072006Revenues520,000$480,000$100.

26、0%100.0%Costs and expenses:Cost of sales360,000 315,000 69.2%65.6%Selling and admin.128,600 126,000 24.7%26.3%Interest expense6,400 7,000 1.2%1.5%Income before taxes25,000$32,000$4.8%6.7%Income taxes(30%)7,500 9,600 1.4%2.0%Net income17,500$22,400$3.4%4.7%Net income per share0.79$1.01$Avg.#common sh

27、ares22,200 22,200 *Rounded to first decimal point.P 2第29页/共70页This is a graphical analysis of Clover Corporations common-size income statement for 2007.Common-Size GraphicsP 2第30页/共70页Lets use the following financial statements for Norton Corporation for our ratio analysis.Ratio AnalysisLiquidity an

28、d EfficiencySolvencyProfitabilityMarketProspectsP 3第31页/共70页NORTON CORPORATIONBalance SheetDecember 31,200720072006AssetsCurrent assets:Cash30,000$20,000$Accounts receivable,net20,000 17,000 Inventory12,000 10,000 Prepaid expenses3,000 2,000 Total current assets65,000$49,000$Property and equipment:L

29、and165,000 123,000 Buildings and equipment,net116,390 128,000 Total property and equipment281,390$251,000$Total assets346,390$300,000$P 3第32页/共70页NORTON CORPORATIONBalance SheetDecember 31,200720072006Liabilities and Shareholders EquityCurrent liabilities:Accounts payable39,000$40,000$Notes payable,

30、short-term3,000 2,000 Total current liabilities42,000$42,000$Long-term liabilities:Notes payable,long-term70,000 78,000 Total liabilities112,000$120,000$Shareholders equity:Common stock,$1 par value27,400 17,000 Additional paid-in capital158,100 113,000 Total paid-in capital185,500$130,000$Retained

31、earnings48,890 50,000 Total shareholders equity234,390$180,000$Total liabilities and shareholders equity346,390$300,000$P 3第33页/共70页NORTON CORPORATIONIncome StatementFor the Years Ended December 3120072006Revenues494,000$450,000$Cost of sales140,000 127,000 Gross margin354,000$323,000$Operating expe

32、nses270,000 249,000 Net operating income84,000$74,000$Interest expense7,300 8,000 Net income before taxes76,700$66,000$Less income taxes(30%)23,010 19,800 Net income53,690$46,200$P 3第34页/共70页Current RatioAcid-test RatioAccounts Receivable TurnoverInventory TurnoverDays Sales UncollectedDays Sales in

33、 InventoryTotal Asset TurnoverLiquidity and EfficiencyP 3第35页/共70页 Use this information to calculate the liquidity and efficiency ratios for Norton Corporation.Liquidity and EfficiencyP 3第36页/共70页Dec.31,2007Current assets65,000$Current liabilities(42,000)Working capital23,000$Working capital represe

34、nts current assets financed from long-term capital sources that do not require near-term repayment.Working CapitalP 3第37页/共70页CurrentRatio Current Assets Current Liabilities=This ratio measures the short-term debt-paying ability of the company.Current RatioCurrentRatio$65,000$42,000=1.55:1P 3第38页/共7

35、0页Quick assets are Cash,Short-Term Investments,and Current Receivables.This ratio is like the currentratio but excludes current assets such as inventories and prepaid expenses that may be difficult to quickly convert into cash.Acid-Test RatioQuick AssetsCurrent Liabilities=Acid-TestRatio$50,000$42,0

36、00=1.19:1=Acid-TestRatioP 3第39页/共70页This ratio measures how many times a company converts its receivables into cash each year.Accounts Receivable Turnover Sales on Account Average Accounts ReceivableAccounts ReceivableTurnover=26.7 times$494,000 ($17,000+$20,000)2Accounts ReceivableTurnover=P 3第40页/

37、共70页This ratio measures the numberof times merchandise is sold andand replaced during the year.Cost of Goods Sold Average InventoryInventoryTurnover=12.73 times$140,000 ($10,000+$12,000)2=InventoryTurnoverInventory TurnoverP 3第41页/共70页This ratio measures the liquidity of receivables.Days Sales Uncol

38、lected=Ending Accounts ReceivableNet Sales 365Days Sales Uncollected=$20,000$494,000 365 =14.8 daysDays Sales UncollectedP 3第42页/共70页This ratio measures the liquidity of inventory.Days Sales in Inventory=Ending InventoryCost of Goods Sold 365Days Sales in Inventory=$12,000$140,000 365 =31.29 daysDay

39、s Sales in InventoryP3第43页/共70页This ratio measures the efficiency of assets in producing sales.Total Asset Turnover=Net SalesAverage Total Assets=1.53 times$494,000($300,000+$346,390)2=Total AssetTurnoverTotal Asset TurnoverP 3第44页/共70页DebtRatioEquityRatioPledged Assets to Secured LiabilitiesTimes I

40、nterest EarnedSolvencyP 3第45页/共70页 Use this information to calculate the solvency ratios for Norton Corporation.SolvencyP 3第46页/共70页 Total Liabilities =Total AssetsDebt RatioThis ratio measures what portion of a companys assets are contributed by creditors.$112,000 =$346,390Debt Ratio=32.3%Debt Rati

41、oP 3第47页/共70页This ratio measures what portion of a companys assets are contributed by owners.Total Equity =Total AssetsEquity Ratio$234,390 =$346,390Equity Ratio=67.7%Equity RatioP 3第48页/共70页This ratio measures the solvency of companies.Total Liabilities =Total EquityDebt-to-Equity-RatioDebt-to-Equi

42、ty RatioP 3第49页/共70页This is the most common measure of the ability of a firms operations to provide protection to the long-term creditor.Times Interest EarnedNet Income before Interest Expense and Income TaxesInterest Expense=Times Interest Earned$84,000$7,300=11.51Times Interest EarnedP 3第50页/共70页P

43、rofit MarginGross MarginReturn on Total AssetsBasic Earnings per ShareBook Value per Common ShareReturn on Common Stockholders EquityProfitabilityP 3第51页/共70页 Use this information to calculate the profitability ratios for Norton Corporation.ProfitabilityP 3第52页/共70页This ratio describes a companys ab

44、ility to earn a net income from sales.ProfitMarginNet IncomeNet Sales=10.87%ProfitMargin$53,690$494,000=Profit MarginP 3第53页/共70页This ratio measures the amount remaining from$1 in sales that is left to cover operating expenses and a profit after considering cost of sales.GrossMarginNet Sales-Cost of

45、 SalesNet Sales=71.66%GrossMargin$494,000-$140,000$494,000=Gross MarginP 3第54页/共70页This ratio is generally consideredthe best overall measure of acompanys profitability.=16.61%$53,690($300,000+$346,390)2=Return on Total AssetsReturn onTotal Assets Net Income Average Total Assets=Return on Total Asse

46、tsP 3第55页/共70页Return on CommonStockholders EquityNet Income-Preferred Dividends Average Common Stockholders Equity=25.9%$53,690-0($180,000+$234,390)2=Return on Common Stockholders EquityThis measure indicates how well the company employed the owners investments to earn income.Return on Common Stockh

47、olders EquityP 3第56页/共70页Book Value per Common ShareShareholders Equity Applicable to Common SharesNumber of Common Shares Outstanding=This ratio measures liquidation at reported amounts.Book Value per Common ShareP 3第57页/共70页This measure indicates how muchincome was earned for each share of common

48、stock outstanding.Basic Earningsper ShareNet Income-Preferred DividendsWeighted-Average Common Shares Outstanding=Basic Earningsper Share$53,690-027,400=$1.96 per shareBasic Earnings per ShareP 3第58页/共70页Price-Earnings RatioDividend YieldMarket ProspectsP 3第59页/共70页 Use this information to calculate

49、 the market ratios for Norton Corporation.Market ProspectsP 3第60页/共70页This measure is often used by investors as a general guideline in gauging stock values.Generally,the higher the price-earnings ratio,the more opportunity a company has for growth.Price-EarningsRatio Market Price Per Share Earnings

50、 Per Share=Price-EarningsRatio$15.00$1.96=7.65 timesPrice-Earnings RatioP 3第61页/共70页This ratio identifies the return,in terms of cash dividends,on the current market price of the stock.DividendYieldAnnual Dividends Per ShareMarket Price Per Share=DividendYield$2.00$15.00=13.3%Dividend YieldP 3第62页/共