财务管理基础斯坦利布洛克Chapter(12)

II.leverageRatiosChapter3FinancialRatioAnalysis(Chapter5intextbook)Lecturer:RenGuFall.2013Guangzhou.ChinaOutlineBreak-evenanalysisOperatingleverageFinancialleverageleverageRatios2.1Break-evenPoint(BEP)Analysis(ORVolume-Cost-ProfitAnalysis)Throughfiguringoutthecost(composedoffixedcosts/FCandvariablecosts/VC),wecantell…therelationshipbetweensalesvolumeandprofitability.ClassificationofCosts（Table5-1intextbook）FixedVariableSemi-variableLeaseDepreciationExecutiveSalariesPropertytaxesRawmaterialFactorylaborSalescommissionsUtilitiesRepairsandmaintenanceCaseAboutBreak-EvenAnalysis（P114)Costs/RevenueOutput/SalesFCVCTCTR(p=$2)Q1LossProfit(BE=50,000)=$60,000TC=$100,000TVC=$40,000TR=$100,000OperatingIncome(loss)=0TC=TRFC+VC=TRFC+v×Q=TROperatingbreak-evenisthesaleslevelthatresultsinazeronetincome.(EBIT=0)Netincome=(S-VC-FC)×(1-T)SetNetincome=0(S-VC-FC)×(1-T)=0Dividebothsidesby(1-T)toget:S-VC-FC=0recallthatS=P×Q,VC=v×Q,thenP×Q-v×Q=FCQ=FC/(p-v)Thebreak-evenpointcanalsobecalculatedby:BE=Fixedcosts=Fixedcosts=FCContributionmarginPrice–VariablecostperunitP–VCThebreak-evenpointcanalsobecalculatedby:i.e.BE=$60,000=$60,000=50,000units$2.00-$0.80$1.20Revenuesandcosts($thousands)2001601201008060402040506080100120TotalRevenue(P×Q)TotalCosts(F+Q×Vperunit)VariablecostsFixedCosts(F)ProfitEBIT0BELossEBIT0Unitsproducedandsold(thousands)Fixedcosts($60,000)Price($2)Variablecostsperunit($0.80)Revenuesandcosts($thousands)FCBEPVC=−Revenuesandcosts($thousands)2001601201008060402040506080100120TotalRevenueTotalCostsVariablecostsFixedCosts(F)ProfitEBIT0LossEBIT0Unitsproducedandsold(thousands)Fixedcosts($60,000)Price($2)Variablecostsperunit($0.80)Revenuesandcosts($thousands)OI↑200%volume↑33.33%LeveragedfirmAnothertypeoffirmRevenuesandcosts($thousands)20016012080402030406080100120TotalRevenueTotalcostsVariablecostsFixedcostsProfitBELossUnitsproducedandsold(thousands)Fixedcosts($12,000)Price($2)Variablecostsperunit($1.60)volume↑33.33%OI↑66.67%ConservativefirmSomethingweshouldRememberaboutBreak-EvenAnalysis•TheBEchartisNOTtimerelated•TheBEpointdependsonthenumberofsalesneededtogeneraterevenuetocovercosts!•Break-evenanalysisisusefulforlong-termdecisions,butforshort-termdecisions,wecanthinkaboutcashbreak-evenanalysis.•Break-Evenanalysisbeforeisbasedonaccounting•Break-EvenanalysisbasedoncashflowsDeleteDepreciation333,3320.1$000,40$80.0$00.2$)000,20$000,60($==−−=−VCPFCQ=(FC-D)/(p-v)CashBreak-EvenAnalysisChartQ1Q22.2OperatingLeverageDefinition:•Operatingleveragereflectstheextenttowhichfixedassetsandassociatedfixedcostsareutilizedinbusiness.•Afirmwithrelativelyhighfixedoperatingcostswillexperiencemorevariableoperatingincomeifsaleschange.Formula:DegreeofOperatingLeverage(DOL)=%inEBIT(orOI)/%inSalesWhereainSales→alargerinEBIT(orOI)•OperatingLeveragemeasuresthesensitivityofafirm’soperatingincometoainsales•Operatingleveragereferstotheimpactofachangeinthelevelofoutputontheoperatingincome.Thedegreeofwhichafirmiscommittedtofixedproductioncosts.Afirmwithlowoperatingleveragewillhavelowfixedcostscomparedtoafirmwithhighoperatingleverage.FromamanagerialperspectiveOnewayofcopingwithhighlyuncertainprojectsistokeepthedegreeofoperatingleverageaslowaspossible.MeasuringDOLDOListhepercentagechangeinoperatingincomethatoccursasaresultofapercentagechangeinunitssold.Thefirstequation:0$(60,000)$(12,000)20,000(36,000)(4,000)40,000(12,000)4,00060,00012,00012,00080,00036,00020,000100,00060,00028,000..................LeveragedConservativeFirmFirmUnits(Table5-2)(Table5-3)Case：Page118LeveragedFirm7.2%25%67100000,80000,20100000,36$000,24$==××=DOLConservativeFirm6.1%25%40100000,80000,20100000,20$000,8$==××=DOLThesecondequation:WhereQ=QuantityatwhichDOLiscomputed.P=Priceperunit.VC=Variablecostsperunit.FC=FixedCostsEquation5-3Forexample:Q=80,000P=$2.00VC=$0.80FC=$60,000000,60$000,96$000,96$000,60$)20.1($000,80)20.1($000,80000,60$)80.0$00.2($000,80)80.0$00.2($000,80−=−=−−−=DOLDOL=2.7Thethirdequation:WhereSissales(QP)atwhichDOLiscomputedTVCistotalvariablecostsFCisfixedcostsSTVCDOLSTVCFC−=−−Note:Singleproduct•DiversifiedproductSTVCGPDOLSTVCFCEBIT−==−−2.3FinancialLeverageDefinitionofFinancialLeverageTheuseoffixed-costsourcesoffinancing(debt,preferredstock)ratherthanvariable-costsources(commonstock).MeasuresoffinancialleverageDebt-to-equityDegreeOfFinancialLeverage(DFL)Outlineofthispart:(1)theimpactoffinancialleverage(2)MeasuringofDFL(1)theimpactoffinancialleverageTherearetwofinancialplansforafirm,eachemployingasignificantlyamountofdebtinthecapitalstructure.Financingtotaling$200,000isrequiredtocarrytheassetsofthefirm.PlanA(leveraged)PlanB(conservative)Debt(8%interest)Commonstock$150,000($12,000interest)50,000(8,000sharesat$6.25$50,000($4,000interest)150,000(24,000sharesat$6.25)Totalfinancing$200,000$200,0001.EBIT(0)Earningsbeforeinterestandtaxes(EBIT)00—Interest(I)$(12,000.)$(4,000.)Earningsbeforetaxes(EBT)(12,000.)(4,000.)—Taxes(T)*(6,000.)(2,000.)Earningsaftertaxes(EAT)$(6,000.)$(2,000.)Shares8,00024,000Earningspershare(EPS)$(0.75)$(0.08)2.EBIT($12,000)Earningsbeforeinterestandtax