1,Chapter 16,Financial statement analysis,2,Objectives,Calculate and interpret measures of a firms leverage, liquidity, efficiency, and profitability Use the Du Pont formula to understand the determinants of the firms return on its assets and equity Valuate the potential pitfalls of ratios based on accounting data Understand some key measures of firm performance such as market value added and economic value added,3,Public companies have a variety of stakeholders, such as shareholders, bondholders, bankers, suppliers, employees, and management. All these stakeholders need to monitor the firm and to ensure that their interests are being served. They rely on the companys financial statements to provide the necessary information.,4,Content,Financial ratios The Du Pont system Using financial ratios Measuring company performance The role of financial ratios,5,Income statement: 利潤表 Common-size income statement: 共同尺度利潤表、百分率利潤表 Balance sheet: 資產(chǎn)負(fù)債表 Common-size balance sheet: 共同尺度資產(chǎn)負(fù)債表 Leverage ratios: 負(fù)債比率、杠桿比率 Financial leverage: 財務(wù)杠桿 Long-term debt ratio: 長期負(fù)債比率 Long-term debt-equity ratio: 長期債務(wù)權(quán)益比 Total debt ratio: 資產(chǎn)負(fù)債率,6,Times interest earned ratio: 已獲利息倍數(shù) Cash coverage ratio: 現(xiàn)金流償債能力比率 Liquidity ratio: 變現(xiàn)能力比率 Net working capital to total assets ratio: 凈營運(yùn)資本占總資產(chǎn)比 Current ratio: 流動比率 Quick (or acid-test) ratio: 速動比率或酸性測試比率 Cash ratio: 現(xiàn)金比率 Marketable securities: 有價證券 Asset turnover ratio: 資產(chǎn)周轉(zhuǎn)率,7,Average collection period: 平均收賬期 Inventory turnover ratio: 存貨周轉(zhuǎn)率 Profitability ratios: 盈利能力比率 Profit margin: 銷售凈利率、利潤邊際 Operating profit margin: 營業(yè)利潤率 Return on assets (ROA): 總資產(chǎn)收益率 Return on equity (ROE): 凈資產(chǎn)收益率 Payout ratio: 股利支付率 Plowback ratio: 留存收益率,8,Income statement: financial statement that shows the revenues, expenses, and net income of a firm over a period of time.,9,If balance sheet resembles a snapshot of the firm at a particular point in time, its income statement is like a video. It shows how profitable the firm has been over the past year.,10,Common-size income statement: income statement that presents items as a percentage of revenues.,11,When managers review a companys financial position, they often start by comparing the current years ratios with equivalent figures for earlier years. It is also helpful to look at how the companys financial position measures up to that of other firms in the same industry.,12,Balance sheet: financial statement that shows the value of the firms assets and liabilities at a particular time.,13,Common-size balance sheet: balance sheet that presents items as a percentage of total assets.,14,Financial statements provide you with the basic information to assess its current financial standing. However, financial statements typically contain large amounts of datafar more than is contained in the simplified statements . To condense these data into a convenient form, financial managers generally focus on a few key financial ratios.,15,We will explain how to calculate these ratios and use them to shed light on four questions:,How much has the company borrowed? Is the amount of debt likely to result in financial distress? How liquid is the company? Can it easily lay its hands on cash if needed? How productively is the company using its assets? Are there any signs that the assets are not being used efficiently? How profitable is the company?,16,Four types of financial ratios Leverage ratios負(fù)債比率show how heavily the company is in debt. Liquidity ratios變現(xiàn)能力比率measure how easily the firm can lay its hands on cash. Efficiency or turnover ratios周轉(zhuǎn)率比率measure how productively the firm is using its assets. Profitability ratios盈利能力比率are used to measure the firms return on its investments.,17,When you calculate a companys financial ratios, you need some criteria to decide whether they are a cause for concern or a matter for congratulation. Unfortunately, there is no “right” set of financial ratios to which all companies should aspire. Take, for example, the companys capital structure. Debt has both advantages and disadvantages, and, even if there were an optimal level of debt for company A, it would not be appropriate for company B.,18,Leverage ratios,Debt increases returns to shareholders in good times and reduces them in bad times, it is said to create financial leverage. Leverage ratios measure how much financial leverage the firm has taken on.,19,The companys bankers and bondholders also want to make certain that the company does not borrow excessively. So, if the company wishes to take out a new loan, the lenders will scrutinize several measures of whether the company is borrowing too much and will demand that it keep its debt within reasonable bounds. Such borrowing limits are stated in terms of (financial) leverage ratios.,20,Leverage ratios,Long-term debt ratio: 長期負(fù)債比率 Long-term debt-equity ratio: 長期債務(wù)權(quán)益比 Total debt ratio: 資產(chǎn)負(fù)債率 Times interest earned ratio: 已獲利息倍數(shù) Interest cover ration:利息保障倍數(shù) Cash coverage ratio: 現(xiàn)金流償債能力比率,21,Debt ratio,22,There is a general point here. There are a variety of ways to define most financial ratios and there is no law stating how they should be defined. So be warned: Dont accept a ratio at face value without understanding how it has been calculated.,23,Times interest earned ratio已獲利息倍數(shù),The extent to which interest obligations are covered by earnings,24,Cash coverage ratio現(xiàn)金流償債能力比率,The extent to which interest is covered by the cash flows from operations,25,Liquidity ratios,If the company is borrowing for a short period or has some large bills coming up for payment, you want to make sure that it can lay its hands on the cash when it is needed. The companys bankers and suppliers also need to keep an eye on its liquidity. They know that illiquid firms are more likely to fail and default on their debts. Another reason that analysts focus on liquid assets is that the figures are often more reliable.,26,Liquidity ratios also have some less desirable characteristics. Because short-term assets and liabilities are easily changed, measures of liquidity can rapidly become out-of date. You may not know what that newsprint mill is worth, but you can be fairly sure that it wont disappear overnight.,27,Liquidity ratios,Net working capital to total assets ratio 凈營運(yùn)資本占總資產(chǎn)比,The difference between current assets and current liabilities is known as net working capital.,28,Current ratio流動比率,Rapid decreases in the current ratio sometimes signify trouble.,29,Quick (or acid-test) ratio速動比率,Managers often exclude inventories and other less liquid components of current assets when comparing current assets to current liabilities.,30,Cash ratio,A companys most liquid assets are its holdings of cash and marketable securities.,31,Efficiency ratios,Asset turnover ratio資產(chǎn)周轉(zhuǎn)率,The asset turnover, or sales-to-assets, ratio shows how hard the firms assets are being put to use.,32,A much higher ratio than other companies. There are several possible explanations: （1） The company uses its assets more efficiently; （2） The company is working close to capacity, so that it may be difficult to increase sales without additional invested capital; or (3) the company with its rivals, it produces high volume, low margin products,33,Average collection period平均收賬期,The average collection period measures how quickly customers pay their bills.,34,The collection period is somewhat longer than the industry average. The company may have a conscious policy of offering attractive credit terms to lure business, but it is worth looking at whether the credit manager is lax in chasing up催促the slow payers.,35,Inventory turnover ratio存貨周轉(zhuǎn)率,The rate at which the company is turning over its inventories.,How many days sales are represented by inventories.,Inventory turnover = cost of goods sold/average inventory = 12141 (11541+1412)/2=8.2,36,Profitability ratios,Profit margin銷售凈利率、利潤邊際,Operating profit margin: 營業(yè)利潤率,37,Return on assets (ROA)總資產(chǎn)收益率,In a competitive industry firms can expect to earn only their cost of capital. Therefore, a high return on assets is sometimes cited as an indication that the firm is taking advantage of a monopoly壟斷position to charge excessive prices.,38