财务管理英文版

Chapter6FinancialStatementAnalysis©PearsonEducationLimited2004FundamentalsofFinancialManagement,12/eCreatedby:GregoryA.Kuhlemeyer,Ph.D.CarrollCollege,Waukesha,WIFinancialStatementAnalysisFinancialStatementsAPossibleFrameworkforAnalysisBalanceSheetRatiosIncomeStatementandIncomeStatement/BalanceSheetRatiosTrendAnalysisCommon-SizeandIndexAnalysisExamplesofExternalUsesofStatementAnalysisTradeCreditors--Focusontheliquidityofthefirm.Bondholders--Focusonthelong-termcashflowofthefirm.Shareholders--Focusontheprofitabilityandlong-termhealthofthefirm.ExamplesofInternalUsesofStatementAnalysisPlan--Focusonassessingthecurrentfinancialpositionandevaluatingpotentialfirmopportunities.Control--Focusonreturnoninvestmentforvariousassetsandassetefficiency.Understand--Focusonunderstandinghowsuppliersoffundsanalyzethefirm.Ⅰ.PrimaryTypesofFinancialStatementsIncomeStatementAsummaryofafirm’srevenuesandexpensesoveraspecifiedperiod,endingwithnetincomeorlossfortheperiod.BalanceSheetAsummaryofafirm’sfinancialpositiononagivendatethatshowstotalassets=totalliabilities+owners’equity.BasketWonders’BalanceSheet(AssetSide)a.Howthefirmstandsonaspecificdate.b.WhatBWowned.c.Amountsowedbycustomers.d.Futureexpenseitemsalreadypaid.e.Cash/likelyconvertibletocashwithin1year.f.Originalamountpaid.g.Acc.deductionsforwearandtear.CashandC.E.$90Acct.Rec.c394Inventories696PrepaidExpd5AccumTaxPrepay10CurrentAssetse$1,195FixedAssets(@Cost)f1030Less:Acc.Depr.g(329)NetFix.Assets$701Investment,LT50OtherAssets,LT223TotalAssetsb$2,169BasketWondersBalanceSheet(thousands)Dec.31,2007aBasketWonders’BalanceSheet(LiabilitySide)a.Note,Assets=Liabilities+Equity.b.WhatBWowedandownershipposition.c.Owedtosuppliersforgoodsandservices.d.Unpaidwages,salaries,etc.e.Debtspayable1year.f.Debtspayable1year.g.Originalinvestment.h.Earningsreinvested.NotesPayable$290Acct.Payablec94AccruedTaxesd16OtherAccruedLiab.d100CurrentLiab.e$500Long-TermDebtf530Shareholders’EquityCom.Stock($1par)g200AddPdinCapitalg729RetainedEarningsh210TotalEquity$1,139TotalLiab/Equitya,b$2,169BasketWondersBalanceSheet(thousands)Dec.31,2007BasketWonders’IncomeStatementa.Measuresprofitabilityoveratimeperiod.b.Received,orreceivable,fromcustomers.c.Salescomm.,adv.,officers’salaries,etc.d.Operatingincome.e.Costofborrowedfunds.f.Taxableincome.g.Amountearnedforshareholders.NetSales$2,211CostofGoodsSoldb1,599GrossProfit$612SG&AExpensesc402EBITd$210InterestExpensee59EBTf$151IncomeTaxes60EATg$91CashDividends38IncreaseinRE$53BasketWondersStatementofEarnings(inthousands)forYearEndingDecember31,2007aⅡ.FrameworkforFinancialAnalysisNegotiationswithsuppliersofcapital.Determiningthefinancingneedsofthefirm.1.Analysisofthefundsneedsofthefirm.2.Analysisofthefinancialconditionandprofitabilityofthefirm.3.Analysisofthebusinessriskofthefirm.Ⅲ.UseofFinancialRatiosTypesofComparisonsInternalComparisonsExternalComparisonsAFinancialRatioisanindexthatrelatestwoaccountingnumbersandisobtainedbydividingonenumberbytheother.ExternalComparisonsandSourcesofIndustryRatiosExamples:RiskManagementAssociationDun&BradstreetAlmanacofBusinessandIndustrialFinancialRatiosThisinvolvescomparingtheratiosofonefirmwiththoseofsimilarfirmsorwithindustryaverages.Similarityisimportantasoneshouldcompare“applestoapples.”1.LiquidityRatios(1)CurrentCurrentAssetsCurrentLiabilitiesForBasketWondersDecember31,2007Showsafirm’sabilitytocoveritscurrentliabilitieswithitscurrentassets.BalanceSheetRatiosLiquidityRatios$1,195$500=2.39LiquidityRatios(2)Acid-Test(Quick)CurrentAssets-InvCurrentLiabilitiesForBasketWondersDecember31,2007Showsafirm’sabilitytomeetcurrentliabilitieswithitsmostliquidassets.BalanceSheetRatiosLiquidityRatios$1,195-$696$500=1.00SummaryoftheLiquidityRatioComparisonsStrongcurrentratioandweakacid-testratioindicatesapotentialproblemintheinventoriesaccount.Notethatthisindustryhasarelativelyhighlevelofinventories.RatioBWIndustryCurrent2.392.15Acid-Test1.001.25SummaryoftheLiquidityTrendAnalysesThecurrentratiofortheindustryhasbeenrisingslowlyatthesametimetheacid-testratiohasbeenrelativelystable.ThisindicatesthatinventoriesareasignificantproblemforBW.ThecurrentratioforBWhasbeenrisingatthesametimetheacid-testratiohasbeendeclining.2.FinancialLeverageRatios(1)Debt-to-EquityTotalDebtShareholders’EquityForBasketWondersDecember31,2007Showstheextenttowhichthefirmisfinancedbydebt.BalanceSheetRatiosFinancialLeverageRatios$1,030$1,139=.90FinancialLeverageRatios(2)Debt-to-Total-AssetsTotalDebtTotalAssetsForBasketWondersDecember31,2007Showsthepercentageofthefirm’sassetsthataresupportedbydebtfinancing.BalanceSheetRatiosFinancialLeverageRatios$1,030$2,169=.473.CoverageRatiosInterestCoverageEBITInterestChargesForBasketWondersDecember31,2007Indicatesafirm’sabilitytocoverinterestcharges.IncomeStatementRatiosCoverageRatios$210$59=3.56SummaryoftheCoverageTrendAnalysisThisindicatesthatlowearnings(EBIT)maybeapotentialproblemforBW.Note,weknowthatdebtlevelsareinlinewiththeindustryaverages.TheinterestcoverageratioforBWhasbeenfallingsince2005.Ithasbeenbelowindustryaverag