财务报表分析英文.pptx

6-1After studying Chapter 6,you should be able to:uUnderstand the purpose of basic financial statements and their contents.uExplain why financial statement analysis is important to the firm and to outside suppliers of capital.uDefine,calculate,and categorize(according to liquidity,financial leverage,coverage,activity,and profitability)the major financial ratios and understand what they can tell us about the firm.uDefine,calculate,and discuss a firms operating cycle and cash cycle.uUse ratios to analyze a firms health and then recommend reasonable alternative courses of action to improve the health of the firm.uAnalyze a firms return on investment(i.e.,“earning power”)and return on equity using a DuPont approach.uUnderstand the limitations of financial ratio analysis.uUse trend analysis,common-size analysis,and index analysis to gain additional insights into a firms performance.6-2Financial Financial Statement AnalysisStatement AnalysisuuFinancial StatementsFinancial StatementsuuA Possible Framework for AnalysisA Possible Framework for AnalysisuuBalance Sheet RatiosBalance Sheet RatiosuuIncome Statement and Income Income Statement and Income Statement/Balance Sheet RatiosStatement/Balance Sheet RatiosuuTrend AnalysisTrend AnalysisuuCommon-Size and Index AnalysisCommon-Size and Index Analysis6-3Examples of External Uses Examples of External Uses of Statement Analysisof Statement AnalysisuuuTrade CreditorsTrade Creditors -Focus on the-Focus on the liquidity of the firm.liquidity of the firm.uuuBondholdersBondholders -Focus on the -Focus on the long-term cash flow of the firm.long-term cash flow of the firm.uuuShareholdersShareholders-Focus on the -Focus on the profitability and long-term health of profitability and long-term health of the firm.the firm.6-4Examples of Internal Uses Examples of Internal Uses of Statement Analysisof Statement AnalysisuuuPlanPlan -Focus on assessing the current-Focus on assessing the current financial position and evaluating financial position and evaluating potential firm opportunities.potential firm opportunities.uuuControlControl -Focus on return on-Focus on return on investment for various assets and asset investment for various assets and asset efficiency.efficiency.uuuUnderstandUnderstand-Focus on understanding -Focus on understanding how suppliers of funds analyze the firm.how suppliers of funds analyze the firm.6-5Primary Types of Primary Types of Financial StatementsFinancial StatementsIncome StatementIncome StatementuuA summary of a firms revenues and A summary of a firms revenues and expenses over a specified period,ending expenses over a specified period,ending with net income or loss for the period.with net income or loss for the period.Balance SheetBalance SheetuuA summary of a firms financial position on A summary of a firms financial position on a given date that shows total assets=total a given date that shows total assets=total liabilities+owners equity.liabilities+owners equity.6-6Basket Wonders Balance Basket Wonders Balance Sheet(Asset Side)Sheet(Asset Side)a.How the firm stands on a.How the firm stands on a specific date.a specific date.b.What BW owned.b.What BW owned.c.Amounts owed by c.Amounts owed by customers.customers.d.Future expense items d.Future expense items already paid.already paid.e.Cash/likely convertible e.Cash/likely convertible to cash within 1 year.to cash within 1 year.f.Original amount paid.f.Original amount paid.g.Acc.deductions for g.Acc.deductions for wear and tear.wear and tear.Cash and C.E.$90 Acct.Rec.c c 394 Inventories 696 Prepaid Exp d d 5 Accum Tax Prepay 10 Current AssetsCurrent Assetse e$1,195$1,195 Fixed Assets(Cost)f f 1030 Less:Acc.Depr.g g (329)Net Fix.AssetsNet Fix.Assets$701$701 Investment,LT 50 Other Assets,LT 223 Total AssetsTotal Assetsb b$2,169$2,169Basket Wonders Balance Sheet(thousands)Dec.31,2007Basket Wonders Balance Sheet(thousands)Dec.31,2007a6-7Basket Wonders Balance Basket Wonders Balance Sheet(Liability Side)Sheet(Liability Side)a.Note,Assets=a.Note,Assets=Liabilities+Equity.Liabilities+Equity.b.What BW owed and b.What BW owed and ownership position.ownership position.c.Owed to suppliers for c.Owed to suppliers for goods and services.goods and services.d.Unpaid wages,d.Unpaid wages,salaries,etc.salaries,etc.e.Debts payable 1 year.e.Debts payable 1 year.f.Debts payable 1 year.g.Original investment.g.Original investment.h.Earnings reinvested.h.Earnings reinvested.Notes Payable$290 Acct.Payablec c 94 Accrued Taxes d d 16 Other Accrued Liab.d d 100 Current Liab.Current Liab.e e$500$500 Long-Term Debt f f530 Shareholders Equity Com.Stock($1 par)g g200 Add Pd in Capital g g729 Retained Earnings h h 210 Total EquityTotal Equity$1,1391,139 Total Liab/EquityTotal Liab/Equitya,ba,b$2,169$2,169Basket Wonders Balance Sheet(thousands)Dec.31,2007Basket Wonders Balance Sheet(thousands)Dec.31,20076-8Basket Wonders Basket Wonders Income StatementIncome Statementa.Measures profitability a.Measures profitability over a time period.over a time period.b.Received,or receivable,b.Received,or receivable,from customers.from customers.c.Sales comm.,adv.,c.Sales comm.,adv.,officers salaries,etc.officers salaries,etc.d.Operating income.d.Operating income.e.Cost of borrowed funds.e.Cost of borrowed funds.f.Taxable income.f.Taxable income.g.Amount earned for g.Amount earned for shareholders.shareholders.Net Sales$2,211 Cost of Goods Sold b b 1,599Gross Profit$612 SG&A Expenses c c 402 EBITd$210 Interest Expensee 59 EBT f f$151 Income Taxes 60 EATg$91 Cash Dividends 38 Increase in REIncrease in RE$53$53Basket Wonders Statement of Earnings(in thousands)Basket Wonders Statement of Earnings(in thousands)for Year Ending December 31,2007for Year Ending December 31,2007a6-9Framework for Framework for Financial AnalysisFinancial AnalysisAnalytical Tools UsedAnalytical Tools UsedAnalytical Tools UsedSources and Uses StatementSources and Uses StatementStatement of Cash FlowsStatement of Cash FlowsCash BudgetsCash Budgets1.Analysis of the funds1.Analysis of the funds needs of the firm.needs of the firm.Trend/Seasonal ComponentTrend/Seasonal ComponentTrend/Seasonal ComponentHow much funding will be How much funding will be required in the future?required in the future?Is there a seasonal Is there a seasonal component?component?6-10Framework for Framework for Financial AnalysisFinancial AnalysisHealth of a FirmHealth of a FirmFinancial RatiosFinancial Ratios1.Individually1.Individually2.Over time2.Over time3.In combination3.In combination4.In comparison4.In comparison1.Analysis of the funds needs of the firm.2.Analysis of the financial2.Analysis of the financial condition and profitability condition and profitability of the firm.of the firm.6-11Framework for Framework for Financial AnalysisFinancial AnalysisExamplesExamplesExamples:Volatility in salesVolatility in salesVolatility in costsVolatility in costsProximity to break-even Proximity to break-even pointpoint1.Analysis of the funds needs of the firm.2.Analysis of the financial condition and profitability of the firm.3.Analysis of the business3.Analysis of the business risk of the firm.risk of the firm.Business riskBusiness riskBusiness risk relates to relates to the risk inherent in the the risk inherent in the operations of the firm.operations of the firm.6-12Framework for Framework for Financial AnalysisFinancial AnalysisA A Financial Financial Manager Manager must must consider consider all all threethree jointly jointly when when determining determining the the financing financing needs of the needs of the firm.firm.DeterminingDeterminingthe the financingfinancingneeds of needs of the firm.the firm.1.Analysis of the funds1.Analysis of the funds needs of the firm.needs of the firm.2.Analysis of the financial2.Analysis of the financial condition and profitability condition and profitability of the firm.of the firm.3.Analysis of the business3.Analysis of the business risk of the firm.risk of the firm.6-13Framework for Framework for Financial AnalysisFinancial AnalysisNegotiationsNegotiationswithwithsuppliers ofsuppliers ofcapital.capital.DeterminingDeterminingthe the financingfinancingneeds of needs of the firm.the firm.1.Analysis of the funds1.Analysis of the funds needs of the firm.needs of the firm.2.Analysis of the financial2.Analysis of the financial condition and profitability condition and profitability of the firm.of the firm.3.Analysis of the business3.Analysis of the business risk of the firm.risk of the firm.6-14Use of Financial RatiosUse of Financial RatiosTypes of Types of ComparisonsComparisonsInternal Internal ComparisonsComparisonsExternal External ComparisonsComparisonsA Financial Ratio is an index that relates two accounting numbers and is obtained by dividing one number by the other.6-15External Comparisons and External Comparisons and Sources of Industry RatiosSources of Industry RatiosExamplesExamples:Risk Management Risk Management AssociationAssociationDun&BradstreetDun&BradstreetAlmanac of Almanac of Business and Business and Industrial Industrial Financial RatiosFinancial RatiosThis involves comparing the ratios of one firm with those of similar firms or with industry averages.Similarity is important as one should compare“apples to apples.”6-16Liquidity RatiosLiquidity RatiosCurrentCurrentCurrent AssetsCurrent AssetsCurrent AssetsCurrent LiabilitiesCurrent LiabilitiesCurrent LiabilitiesFor For Basket Wonders Basket Wonders December 31,2007December 31,2007Shows a firms ability to cover its current liabilities with its current assets.Balance Sheet RatiosLiquidity Ratios$1,195$1,195$500$500=2.392.396-17Liquidity Ratio Liquidity Ratio ComparisonsComparisonsBWBW IndustryIndustry2.392.392.152.152.262.262.092.091.911.912.012.01Year200720062005Current RatioRatio is stronger than the industry average.6-18Liquidity RatiosLiquidity RatiosAcid-Test(Quick)Acid-Test(Quick)Current Assets-InvCurrent Assets-InvCurrent Assets-InvCurrent LiabilitiesCurrent LiabilitiesCurrent LiabilitiesFor For Basket Wonders Basket Wonders December 31,2007December 31,2007Shows a firms ability to meet current liabilities with its most liquid assets.Balance Sheet RatiosLiquidity Ratios$1,195-$696$1,195-$696$500$500=1.001.006-19Liquidity Ratio Liquidity Ratio ComparisonsComparisonsBWBW IndustryIndustry1.001.001.251.251.041.041.231.231.111.111.251.25Year200720062005Acid-Test RatioRatio is weaker than the industry average.6-20Summary of the Liquidity Summary of the Liquidity Ratio ComparisonsRatio ComparisonsuuStrong current ratio and weak acid-test Strong current ratio and weak acid-test ratio indicates a potential problem in the ratio indicates a potential problem in the inventories account.inventories account.uuNote that this industry has a relatively Note that this industry has a relatively high level of inventories.high level of inventories.RatioBWIndustryCurrent2.39 2.15Acid-Test1.00 1.256-21Current Ratio-Trend Current Ratio-Trend Analysis ComparisonAnalysis Comparison 6-22Acid-Test Ratio-Trend Acid-Test Ratio-Trend Analysis ComparisonAnalysis Comparison 6-23Summary of the Liquidity Summary of the Liquidity Trend AnalysesTrend AnalysesuuThe current ratio for the The current ratio for the industryindustry has has been rising slowly at the same time the been rising slowly at the same time the acid-test ratio has been relatively stable.acid-test ratio has been relatively stable.uuThis indicates that This indicates that inventoriesinventories are a are a significant problem for significant problem for BWBW.uuThe current ratio for The current ratio for BWBW has been rising has been rising at the same time the acid-test ratio has at the same time the acid-test ratio has been declining.been declining.6-24Financial Leverage RatiosFinancial Leverage RatiosDebt-to-EquityDebt-to-EquityTotal DebtTotal DebtTotal DebtShareholders EquityShareholders EquityShareholders EquityFor For Basket Wonders Basket Wonders December 31,2007December 31,2007Shows the extent to which the firm is financed by debt.Balance Sheet RatiosFinancial LeverageRatios$1,030$1,030$1,139$1,139=.90.906-25Financial Leverage Financial Leverage Ratio ComparisonsRatio ComparisonsBWBW IndustryIndustry.90.90.90.90.88.88.90.90.81.81.89.89Year200720062005Debt-to-Equity RatioBW has average debt utilizationrelative to the industry average.6-26Financial Leverage RatiosFinancial Leverage RatiosDebt-to-Total-AssetsDebt-to-Total-AssetsTotal DebtTotal DebtTotal DebtTotal AssetsTotal AssetsTotal AssetsFor For Basket Wonders Basket Wonders December 31,2007December 31,2007Shows the percentage of the firms assets that are supported by debt financing.Balance Sheet RatiosFinancial LeverageRatios$1,030$1,030$2,169$2,169=.47.476-27Financial Leverage Financial Leverage Ratio ComparisonsRatio ComparisonsBWBW IndustryIndustry.47.47.47.47 .47.47.47.47.45.45.47.47Year200720062005Debt-to-Total-Asset RatioBW has average debt utilizationrelative to the industry average.6-28Financial Leverage RatiosFinancial Leverage RatiosTotal CapitalizationTotal CapitalizationLong-term DebtLong-term DebtLong-term DebtTotal CapitalizationTotal CapitalizationTotal CapitalizationFor For Basket Wonders Basket Wonders December 31,2007December 31,2007Shows the relative importance of long-term debt to the long-term financing of the firm.Balance Sheet RatiosFinancial LeverageRatios$530$530$1,669$1,669=.32.32(i.e.,LT-Debt+Equity)6-29Financial Leverage Financial Leverage Ratio ComparisonsRatio ComparisonsBWBW IndustryIndustry.32.32.30.30.32.32.31.31.37.37.32.32Year200720062005Total Capitalization RatioBW has average long-term debt utilizationrelative to the industry average.6-30Coverage RatiosCoverage RatiosInterest CoverageInterest CoverageEBITEBITEBITInterest ChargesInterest ChargesInterest ChargesFor For Basket Wonders Basket Wonders December 31,2007December 31,2007Indicates a firms ability to cover interest charges.Income StatementRatiosCoverage Ratios$210$210$59$59=3.563.566-31CoverageCoverageRatio ComparisonsRatio Comparisons BW BW IndustryIndustry 3.56 3.565.195.19 4.35 4.355.025.0210.3010.304.664.66Year200720062005Interest Coverage RatioBW has below average interest coveragerelative to the industry average.6-32Coverage Ratio-Trend Coverage Ratio-Trend Analysis ComparisonAnalysis Comparison 6-33Summary of the Coverage Summary of the Coverage Trend AnalysisTrend AnalysisuuThis indicates that This indicates that low earnings low earnings(EBIT)(EBIT)may be a potential problem for may be a potential problem for BWBW.uuNote,we know that Note,we know that debt levels debt levels are in are in line with the line with the industryindustry averages.averages.uuThe interest coverage ratio for The interest coverage ratio for BWBW has has been falling since 2005.It has been been falling since 2005.It has been below below industryindustry averages for the past averages for the past two years.two years.6-34Activity RatiosActivity RatiosReceivable TurnoverReceivable TurnoverAnnual Net Credit SalesAnnual Net Credit Sal