英国布里斯托大学财务分析课程

FinancialStatementAnalysisandValuation-Lecturesandtutorials-Lecturesprovideaframeworkfororganisingideas.-Additionalreadingnecessary!-Ryanaircase:goodpreparationforthecoursework-Exercises:Foryourownwork-Tutorials:[e-mail],13-14.00Friday,11.30-12.301B14Week12AFrameworkforFundamentalAnalysisBusinessAnalysisBusinessactivitiesandcapitalmarketsOperatingactivitiesFinancingactivitiesInvestingactivitiesThefirm:ThevaluegeneratorTheInvestors:TheclaimantsonvalueDebtholdersShareholdersSecondaryDebtholdersSecondaryShareholdersCashfromloansCashfromshareissuesDividendsandcashfromsharerepurchasesInterestandloanpaymentsCashfromsaleofdebtCashfromsaleofsharesTheCapitalMarket:TradingvalueSource:Penman,p.8Whatarewedoing?•Financialanalystsare:–informationintermediaries;theydigestinformationandprovidesummaryinformationtothepublic/lesssophisticatedinvestors.–especiallyimportantwherecapitalmarketsarewelldeveloped.Theyaredoing:•Fundamentalanalysis:contextualanalysisofallpubliclyavailableinformationinordertovaluethecompany.•Technicalanalysis:spottingsharepricetime-seriespatternsinordertopredictmovementofprices.Whatarewedoing?Partoffundamentalanalysis:•Financialstatementanalysisandvaluationofsharessoastogivewellinformedinvestmentadvicetoanequityinvestor.•Similartowhatsell-sideequitywithinbrokeragehousesaredoing(asopposedtobuy-sideanalystsaffiliatedwithinstitutionalinvestors)•Finalproduct:equityresearchreport•Noteofcautioninregardoffinancialstatementanalysis:–Financialstatementanalysiscanbedoneforvariouspurposes:creditanalysis,competitivebenchmarking,analysisofmergersandacquisitions,etc.–Differentpurposesrequiredifferentapproachtoanalysis–Focusofthiscourse:analysisoffinancialperformanceandfinancialpositioninordertoforecastfuturepayoffstoequityholdersWhyarewedoingit?•Socialwelfare:–Theactivityofanalystsmakemarketsefficient.Therefore,contributiontoefficientallocationofresources.•Personalgains:–Ifmarketsarenotefficient,theproperanalysishelpsinidentifyingmispricedcompanies.–1980’s:marketefficiencyparadigmwidelyaccepted→passiveinvestment–Evidenceofmarketinefficiency→activeinvestmentandarenewedinterestinfundamentalanalysis(WarrenBuffet)–Fundamentalanalysis:•anchoringonreliableinformation(accounting)ratherthanrumoursandspeculations;•long-termperspectiveasopposedtoshort-termgainDot-combubble:Dellillustration•Late1990’s:unlimitedfaithinprospectofnewtechnologyandinternetfirms;bubbleburstin2001•Forthey/e2000Dellhadreportedearningsof$1.7billiononsalesof$25.3billion.TheMVofDell’ssharesatthetimewas$146.4billion–3*theMVofGMCandFordMotorCompanycombined(P/E8.5/5.0respectively)•Dell’ssharestradedataP/Eof87.9!•DespitehealthytradingandforecastedgrowthDell’sstockappearedover-valued.–In2000thepersharestockpricefellfrom$58inearly2000to$29in2003.Thepricehadonlyrecoveredto$40in2005.Dot-combubble:Whatweretheanalystsdoing?•Theywereridingthewave:–involvedinshort-termspeculationofthemarketmoodratherthanprovidingmoresoberpicturetotheirclientsbasedonfundamentalsofthecompanies.–Analysisbasedoninternetclicksthatdonotgenerateanyincome•Conflictofinterest:–Manybrokeragehousesaffiliatedwithinvestmentbanks:thebetterpictureofbusiness,morelucrativebusinessiscreatedforthebanks(SEO’s,mergers,etc.)Dot-combubble:Theroleoffinancialstatements•TheroleofF/Sisto“anchortheinvestorontherisingtideofspeculation”withhardinformation–Earningsdidmatter!Lossesreportedbyneweconomyfirmsduringthebubbleturnedouttobeagoodpredictoroffailure–Survivingfirmsreportedearningsturnedouttobeabetterindicatoroffutureperformance–Mostoftheintangibleassetsdisappeared–Themuch-criticisedSoFP(B/S)alsoprovidedgoodforecasts.–TheratioofdebtassumedtopursueintangibleswaslargerelativetotangibleassetsandthatratiopredictsimpendingfailureProcessoffundamentalanalysisBusinessanalysisTradingonthevaluationAccountinganalysisFinancialanalysisForecastingValuationUnderstandingthePastProcessoffundamentalanalysis•Businessanalysis–Economicfactors–Industrystructure–Competitivestrategy–Corporatestrategy•Accountinganalysis–Evaluationoftheextenttowhichafirm’saccountingcapturestheunderlyingbusinessreality–Understandingaccountingdistortions•Financialanalysis–AnalysisoffinancialperformanceandfinancialpositionusingratioandcashflowanalysisProcessoffundamentalanalysis•Forecastingthefuture–Forecastingofpayoffsthroughforecastsofbalancesheet,incomestatementandcashflows•Valuation–Convertingforecastintheestimatesofequityvaluebyusingsomeoftheavailablevaluationmodels•Tradingonthevaluation–Investmentrecommendation:hold,buyorsellProcessoffundamentalanalysisFinancialStatementsYear1CurrentfinancialstatementsOtherinformationValuationofequityFinancialStatementsYear2FinancialStatementsYear3ForecastsConvertforecaststovaluationValuation•Value=Presentvalueoffuturepayoffs–Depositaccount,Loan,Bond=PVoffutureinterestreceivable+principal–Investmentproject=PVoffuturenetcashflowsfromtheproject–Calloption=PVoffutureexpecteddifferencebetweensharepriceandstrikeprice–House=PVoffuturerents–Equity=PVoffuturep