StatementAnalysis(财务报表分析,加州大学MBA)

Outlineoftodayslecture,ValueofafirmtoinvestorsandcreditorsAnalysisofprofitability:ROAAnalysisofprofitability:ROCEAnalysisofprofitability:EPS,Thevalueofafirmtoequityinvestors,V=D1/(1+r)+D2/(1+r)2+D3/(1+r)3.,profitability,risk,Thevalueofafirmtocreditors,V=I1/(1+r)+I2/(1+r)2+I3/(1+r)3+P/(1+r)3Ii:interestrevenuesinperiodiP:returnofprincipal,profitability,risk,FinancialStatementAnalysis,1.Understandtherelationbetweentheexpectedreturnandriskofinvestmentalternatives,andtheroleofanalysisinprovidingriskandreturninformation.2.Understandtheusefulnessoftherateofreturnonassets(ROA)asameasureofafirmsoperatingprofitability.3.Understandtheusefulnessoftherateofreturnoncommonshareholdersequity(ROCE)asameasureofprofitability.4.Understandthestrengthsandweaknessesofearningspercommonshareasameasureofprofitability.,Whattocompare?,1.Theplannedratiofortheperiod2.Thecorrespondingratiofromapriorperiod(time-seriesanalysis)3.Thecorrespondingratioforanotherfirminthesameindustry(cross-sectionanalysis)4.Theaverageratioforotherfirmsinthesameindustry(cross-sectionanalysis),AnalysisofProfitability,Returnonassets(ROA):returntothefirmasawholeReturnoncommonequity(ROCE):returntocommonshareholdersonlyEarningspercommonshare,AnalysisofProfitability,ROA:returntothefirm,ROCE:returntocommonShareholdersonly,ReturnonAssets(ROA),ROApresentsprofitabilityindependentofthesourceoffinancingDoesnotconsiderleverageMeasureofhowwellthefirmusesitsassetstogenerateincomeAsifthefirmisfinancedbyequityalone,HorriganCorporation,HorriganCorporation-assumingnodebts,HorriganCorporationROA,Averagetotalassetsofthiscompanyinyear4(520+650)/2=585,ThenROA=71.2/585=12.2%Whyaddbackinterestincomenetofincometaxsavingsinthenumerator?1)Ifallequity,thefirmwontpay$16interestexpense,whichincreasenetincomeby$16;2)at30%taxrate,governmentwillcollectanadditionalamountof$4.8(16*30%)astax,thentheactualincreaseofnetincomeis(164.8).,DisaggregatingROA,ROA=ProfitMarginratio*Assetturnoverratio,ATOmeasuresthefirmsAbilitytogeneratesalesAtagivenlevelofInvestmentinassets,PMmeasurestheFirmsabilitytoControlcostandExpensesatagivenLevelofsalesActivity.,HowtoincreaseROA?,Atthecurrentassetbase,increasesales?ButincreasedsalesincreasesATOwhiledecreasesPMAdilemma!Soonehastoincreasesalesandatthesametimeholddowncostsandexpenses,i.e.,holdPMatcertainlevel.,HowtoincreaseROA?-2,TheevolutionofROAintheU.S.thegraphsinthenextfewslidesarefromPenmanandNissimReviewofAccountingStudies,2001,RNOA:ReturnonnetoperatingassetsRegressiontothemean（回归到平均值）,Profitmargin,Assetturnover,Revenuegrowth,DisaggregatePM,PM=(salesCOGSSGAdepreciation.)/SalesCOGS-to-SalesratioSelling,Generalandadministrative(SGA)expense-to-salesratioEtc.Byobservingthetimeseriesandcross-sectionofeachexpense-to-salesration,onecanidentifyabnormalratiosandinvestigatethereasons,inordertocontrolcostsandexpensestoincreasePM,DisaggregateATO,ATO=Sales/averagetotalassetsAveragetotalassets=(averageaccountreceivables+averageinventory+averagefixedassets+averageotherassets),Accountsreceivableturnover,Measureshowquicklyafirmcollectscash.IfA.R.turnovertwiceayear,thentheyaverageonehalfofayearincollection.Lesstimeispreferredtomore.Ahighturnoverispreferredtoalowone.Thedaysofoutstandingforaccountreceivables:365days/accountsreceivableturnover,Inventoryturnover,Indicateshowfastfirmssellmerchandise.Ifinventoryturnovertwiceayear,thentheyaverageonehalfofayearininventory.Holdinginventoryiscostlybecausethefundsinvestedininventorycouldbeusedelsewhere.Ahighturnoverispreferredtoalowone.Dayofinventoryinwarehouse:365/Inventoryturnover,Fixedassetturnover,Measurestherelationbetweeninvestmentinlong-termorfixedassets(suchasproperty,plant,equipment)andsales.Efficientuseoffixedassetswouldbeassociatedwithhighsales.Iffixedassetsturnovereveryfouryears,theneachdollarinvestedinfixedassetsisgeneratingaquarterofadollarinsalesperyear.Ahighturnoverispreferredtoalowone.,ReturnonCommonEquity(ROCE),Thenumeratormeasuresreturnasnetincomereducedbyanypaymentstopreferredshareholdersasthesedividendsarenotavailabletothecommonshareholderandhavenotbeendeductedfromnetincome.ThedenominatoristheaverageamountcontributedbycommonshareholderswhichincludesCommonstockatpar,Additionalpaidincapital,andRetainedearnings.,RelationbetweenROAandROCE,ROCEistheresidualreturnwhichgoestothecommonshareholders.Sinceitmaybelowinpooryearsbuthighingoodyears,ithasarisk,thatis,theresidualreturnisnotknown.Debtischaracterizedbyadefinitescheduleofpayments,sothereislittlerisktothedebtholders.Preferredstockislikedebt,thedividendsarespecified.However,debtorsmustbepaidbeforepreferredshareholdersandifthemoneyrunsout,thentheyarentpaid.,RelationbetweenROAandROCE,ROAcanbedividedintoReturntocreditorsordebtorsReturntopreferredshareholders,andReturntocommonshareholders(ROCE)Becausethereturntodebtorsandpreferredshareholdersarefixed,ingoodyearswhenthefirmhashighreturns,thereisalotofprofitleftoverforthecommonshareholders;inpooryearswhenreturnsarelow,thereislittleormaybenoprofitleftover.,RelationbetweenROAandROCE,Thus,ifROCEandROAwerebothlinear,thenROCEwouldhaveagreaterslopethanROA,thatis,itismorehighlylevered.Aprudentfirmwillborrowfundsonlywhenthereturnonthosemarginalfundsexceedthecostofborrowinggivinganetpositivereturntothecommonshareholder.ROCEcanbedisaggregatedintothreerelatedratios1.Profitmarginratio2.Totalassetsturnover3.Leverageratio,RelationbetweenROAandROCE,Thefirsttwohavebeenpreviouslydefined.Leverageratioindicatestherelativeproportionofcapitalprovidedbycommonshareholdersasdistinctfromthatprovidedbycreditors(debtors)orpreferredshareholders.,RelationbetweenROAandROCE,Ahighleverageratiomeansthatthefirmhasalotofassetsatitscommand,butthattheshareholdershavelessoftheirowninvestmentsatrisk.Thisisgoodingoodyearsbecausethecommonshareholderscaptureallprofitsoverwhatisneededtoservicethedebt.Thisisbadinpooryearsbecausethedebthastobeservicedwhetherornotthecommonshareholdersmakeaprofit.Therefore,borrowingisonlybeneficialwhenROAisgreaterthanthecosttoborrowmoney,TheevolutionofROCEandnetborrowingcost(NBC)intheU.S.,Debit-to-Equityratio(leverage)intheU.S.,EarningsperShare(EPS)ofCommonStock,Thisratioistheprofitthatgoestoeachshareofcommonstock.Itwouldbesimplythenetincomelesspreferreddividendsdividedbythenumberofcommonshares.However,t