财务报表分析与运用杰拉尔德课后答案英文版第三章

1、e-usOvervieew:Problemm Lenggth Prroblemm #s SS 1, 3 MM2, 7, 8, 112, 133L6- 11.Sa.Palommba Piizza SStoress Stateement of Caash FllowsYear Endedd Deceember 31, 22000PRIVATE Cash Fllows ffrom OOperatting AActiviities: Cash Colleectionns froom Cusstomerrs Cash Paymeents tto Suppplierrs Cash Paymeents ff

2、or Saalariees Cash Paymeents ffor InnteresstNet Cassh froom Opeeratinng ActtivitiiesCash Fllows ffrom IInvestting AActiviities: Saless of EEquipmment Purchhase oof Equuipmennt Purchhase oof LanndNet Cassh forr Inveestingg ActiivitieesCash Fllows ffrom FFinanccing AActiviities: Retirrementt of CCommo

3、nn Stocck Paymeent off DiviidendssNet Cassh forr Finaancingg Actiivitiees Nett Incrrease in Caash Cassh at Beginnning of Yeear Cassh at End oof Yeaar$ 250,0000 (85,0000) (45,0000) (10,0000) 38,0000 (30,0000) (14,0000) (25,0000) (35,0000)$ 110,0000 (6,0000) (60,0000)$ 44,0000 50,0000 $ 94,0000 b.Cass

4、h Floow froom Opeeratioons (CCFO) mmeasurres thhe cassh genneratiing abbilityy of ooperattions, in aadditiion too proffitabiility. If uused aas a mmeasurre of perfoormancce, CFFO is less subjeect too disttortioon thaan nett incoome. AAnalyssts usse thee CFO as a checkk on tthe quualityy of rreportte

5、d eaarninggs, allthouggh it is noot a ssubstiitute for nnet inncome. Comppaniess withh highh net incomme andd low CFO mmay bee usinng oveerly aaggresssive incomme reccognittion ttechniiques. The abiliity off a fiirm too geneerate cash from operaationss on aa conssistennt bassis iss one indiccationn

6、of tthe fiinanciial heealth of thhe firrm. Annalystts seaarch ffor trrends in CFFO to indiccate ffuturee cashh condditionns andd poteentiall liquuidityy or ssolvenncy prroblemms.Cash Flow from Invessting Activvitiess (CFII) repports how tthe fiirm iss inveestingg its excesss cassh. Thhe anaalyst mus

7、t consiider tthe abbilityy of tthe fiirm too conttinue to grrow annd CFII is aa goodd indiicatioon of the aattituude off manaagemennt in this area. Thiss compponentt of ttotal cash flow incluudes tthe caapitall expeendituures mmade bby mannagemeent too mainntain and eexpandd prodductivve cappacityy.

8、 Deccreasiing CFFI mayy be aa foreecast of sllower futurre groowth.Cash Fllow frrom Fiinanciing (CCFF) iindicaates tthe soourcess of ffinanccing ffor thhe firrm. Foor firrms thhat reequiree exteernal sourcces off finaancingg (eitther bborrowwing oor equuity ffinanccing) it coommuniicatess manaagemen

9、nts ppreferrencess regaardingg finaanciall leveerage. Debtt finaancingg indiicatess futuure caash reequireementss for princcipal and iintereest paaymentts. Eqquity finanncing will causee futuure eaarninggs perr sharre dillutionn.For ffirms whosee operratingg cashh floww exceeeds iinvesttment needss,

10、 CFFF indiicatess whetther tthat eexcesss is uused tto reppay deebt, ppay (oor inccreasee) cassh divvidendds, orr repuurchasse outtstandding ssharess.c.Cassh payymentss for interrest sshouldd be cclassiified as CFFF forr purpposes of annalysiis. Thhis cllassifficatiion seeparattes thhe efffect oof f

11、innanciaal levveragee deciisionss fromm operratingg resuults. It allso faacilittates the ccomparrison of Paalombaa withh otheer firrms whhose ffinanccial lleveraage diifferss.d. Thhe chaange iin cassh hass no aanalyttic siignifiicancee. Thee channge inn cashh (andd hencce, thhe cassh ballance at thh

12、e endd of tthe yeear) iis a pproducct of managgementt deciisionss regaardingg finaancingg. Forr exammple, the ffirm ccan shhow a largee cashh balaance bby draawing on baank liines jjust pprior to yeear ennd.e. and f. Theere arre a nnumberr of ddefiniitionss of ffree ccash fflows.In the text, freee c

13、ashh floww is ddefineed as cash from operaationss lesss the amounnt of capittal exxpendiituress requuired to maaintaiin thee firmms cuurrentt prodductivve cappacityy. Thiis deffinitiion reequirees thee excllusionn of ccosts of grrowth and aacquissitionns. Hooweverr, feww firmms proovide separrate dd

14、iscloosuress of eexpendditurees inccurredd to mmaintaain prroducttive ccapaciity. CCapitaal cossts off acquuisitiions mmay bee obtaained from proxyy stattementts andd otheer dissclosuures oof acqquisittions (See Chaptter 144). In the finannce liiteratture, free cash flowss avaiilablee to eequityy ho

15、ldders aare offten mmeasurred ass cashh fromm operrationns lesss cappital expennditurres. IIntereest paaid iss a deeductiion whhen coomputiing caash frrom opperatiions aas it is paaid too credditorss. Pallombas freee cassh floow avaailablle to equitty hollders is caalculaated aas folllows:Net cassh

16、floow froom opeeratinng acttivitiies leess neet cassh forr inveestingg actiivitiees:$110,0000 - $6,0000 = $1104,0000 The invvestmeent acctivitties ddiscloosed iin thee probblem ddo nott indiicate any aacquissitionns. Anotherr defiinitioon of free cash flowss, whiich foocusess on ffree ccash fflow aa

17、vailaable tto alll provviderss of ccapitaal, woould eexcludde payymentss for interrest ($10,0000 inn thiss casee) andd debtt. Thuus, Paalombaas frree caash fllow avvailabble too all proviiders of caapitall woulld be $114,000. 2.Ma.PRIVATE 199619971998199920002001SalesBad debbt exppenseNet recceivabb

18、lesCash coollecttions11$ 30$ $ 140 7 40$ 123$150 7 50$133$165 8 60$147$175 10 75$150$195 10 95$1651 Saless - baad debbt exppense - inccreasee in nnet reeceivaablesb. 19971998199920002001Bad debbt exppense/saless5.0%4.7%4.9%5.7%5.1%Net recceivabbles/ssales28.633.336.442.848.7Cash coollecttions/saless

19、87.988.789.185.784.6c.The bad ddebt pprovission ddoes nnot seeem too be aadequaate. FFrom 11997 - 20011 salees inccreaseed by approoximattely 440%, wwhile net rreceivvabless moree thann doubbled, indiccatingg thatt colllectioons haave beeen laaggingg. Thee ratiios caalculaated iin parrt b aalso iind

20、icaate thhe prooblem. Whille badd debtt expeense hhas reemaineed faiirly cconstaant att 5% oof salles ovver thhe 5 yyear pperiodd, nett receeivablles ass a peercenttage oof salles haave inncreassed frrom 299% to 49%; cash colleectionns rellativee to ssales have decliined. Otherr posssible explaanati

21、oons foor theese daata arre thaat staated ppaymennt terrms haave leengtheened oor thaat Steengel has aalloweed cusstomerrs to delayy paymment ffor coompetiitive reasoons.3.SNiiagaraa ComppanyStatemment oof Cassh Floows 20001PRIVATE Cash coollecttionsCash innputsCash exxpenseesCash innteresst paiidIn

22、come taxess paidd Cash from OperaationssPurchasse of fixedd asseetsCash Ussed foor InvvestinngIncreasse in LT deebtDecreasse in notess payaableDividennds paaidCash Ussed foor FinnancinngNet Chaange iin CasshCash Baalancee 12/331/00Cash Baalancee 12/331/01$ 980 (670) (75) (40) (30)$ 165 (150) (150) 5

23、0 (25) (30) (5)$ 10 500 $ 60 Sales - AAccounnts ReeceivaableCOGS + InvventorrySellinng & GGeneraal Exppense - Acccountts Payyable11Intereest Exxpensee - IIntereest PaayableeIncomee Tax Expennse - Defeerred TaxDeprecciatioon Exppense + Fiixed AAssetss (nett)Net Inncome - Reetaineed earrningss 1 Can a

24、also bbe useed to calcuulate cash inputts, deecreassing tthat ooutfloow to $645 whilee incrreasinng cassh exppensess to $100.4.La.G CommpanyIncomme Staatemennt, 20000 ($ thouusandss)PRIVATE SalesCOGS + operaating expennses1DepreciiationnInteresstTaxes Net iincomee$ 3,8411 3,6511 155 411 422$ 922rece

25、ippts frrom cuustomeers + increease iin acccountss receeivabllepaymennts - increease iin invventorry + iincreaase inn accoounts payabbleincreaase inn accuumulatted deepreciiationnpaymenntspaymennt + iincreaase inn tax payabblecheck = chaange iin rettainedd earnnings as thhere aare noo diviidendss1 N

26、ote that thesee two itemss cannnot bee calcculateed sepparateely frrom thhe infformattion aavailaable.b.M CCompannyCash Receiipts aand Diisburssementts, 20000 ($ thouusandss)PRIVATE Cash reeceiptts froom: Custoomers Issuee of sstock Shortt-termm debtt Long-term debt TootalCash diisburssementts: COGS

27、 and ooperatting eexpensses Taxess Interrest Dividdends PP&E purchhase TotallChange in caash$ 1,8077 33 622 966$ 1,9688 $ 1,8433 33 511 222 333$ 1,9522$ 166 Sales - inccreasee in rreceivvablessIncreaase inn accoountIncreaase inn liabbilityyIncreaase inn liabbilityyCOGS + operratingg expeense + incrr

28、ease in innventoory + decreease iin acccountss payaableExpensse - iincreaase inn tax payabbleExpensseIncomee + inncreasse in retaiined eearninngsChangee in PPP&ENote: TThis iis nott a trrue reeceiptts andd disbbursemments scheddule aas it showss certtain aamountts (e.g., ddebt) on a net bbasis rathe

29、er thaan grooss. SSuch sscheduules (and ccash fflow sstatemments) preppared from publiished data can oonly sshow ssome aamountts nett, unlless ssuppleementaary daata arre avaailablle.c.Thee cashh floww stattementts aree pressentedd withh the incomme staatemennt forr compparisoon purrposess in aanswe

30、rring PPart dd.M Compaany: SStatemment oof Cassh Floows($ thhousannds)PRIVATE 19961997199819992000CFO:From cuustomeersLess ouutlayss for:COGS/opper. eexp.InteresstTaxesCFI:PP&E puurchasseCFF:Issue oof stoockShort-tterm ddebtLong-teerm deebtDividenndsStock rrepurcchase LT debtt repaaidST debtt repaai

31、dChange in caash$1,165 1,130 15 23 $ (3) (14) 5 64 - (20) (22) (2) - $ 25 8 $1,210 1,187 19 19 $ (15) (17) 5 65 - (21) (14) (2) - $ 33 1 $1,327 1,326 16 9 $ (24) (37) 8 - 100 (21) - (3) (8)$ 76 15 $1,587 1,672 21 9 $ (115) (30) 3 153 - (21) (10) - - $ 125 (20)$1,807 1,843 51 3 $ (90) (33) 3 62 96 (2

32、2) - - - $ 139 16 M Commpany: Incoome Sttatemeent ($ thouusandss)PRIVATE 19961997199819992000SalesCOGSOperatiing exxpenseeDepreciiationnInteresstTaxes Totall Net IIncomee$ 1,2200 8188 2988 99 155 388$ 1,1788 422$ 1,2655 8433 3200 100 199 333$ 1,2255 400$ 1,3844 9311 3633 111 166 277$ 1,3488 366$ 1,6

33、555 1,1255 4344 122 211 266$ 1,8522 377$ 1,8611 1,2777 5044 144 511 66$ 1,8522 99G Commpany: Stattementt of CCash FFlows($ thhousannds)PRIVATE 19961997199819992000CFO:From cuustomeersDisburssementts:COGS/Opper. eexp.InteresstTaxes CFI:PP&E puurchasseCFF:Issue oof stoockShort-tterm ddebtLong-teerm de

34、ebt Change in caash$1,110 1,214 11 13 $ (128) 10 80 40 $ 130 $ 2$1,659 1,702 13 15 $ (71) 52 23 $ 75 $ 4 $2,163 1,702 23 16 $ (93) (20) 5 91 20 $ 116 $ 3 $2,809 2,895 29 29 $ (144) (10) 45 3 125 $ 173 $ 19 $3,679 3,778 41 35 $ (175) 30 60 50 $ 140 $ 35 G CommpanyIncoome Sttatemeent($ thhousannds)PRI

35、VATE 19961997199819992000SalesCOGSOperatiing exxpenseeDepreciiationnInteresstTaxes Totall Net iincomee$ 1,3399 1,0399 2433 100 111 133$ 1,3166$ 233$ 1,7311 1,3344 3122 100 133 200$ 1,6899$ 422$ 2,2611 1,7433 3988 122 233 277$ 2,2033$ 588$ 2,9399 2,2677 5244 144 299 311$ 2,8655$ 744$ 3,8411 3,6511 15

36、5 411 422$ 3,7499$ 922Note: 22000 CCOGS aand opperatiing exxpensee are combiined aas theere iss insuufficiient iinformmationn to sseparaate thhem.d.Bothh comppaniess are crediit rissks. AAlthouugh booth arre proofitabble, ttheir CFO iis inccreasiingly negattive. If cuurrentt trennds coontinuue theey

37、 facce posssiblee insoolvenccy. Hooweverr, beffore rrejectting bboth lloans outriight, it iss impoortantt to kknow wwhetheer CFOO and incomme difffer bbecausse thee comppaniess are doingg poorrly orr becaause tthey aare grrowingg too fast.Both coompaniies inncreassed saales oover tthe 5 year periood

38、; Coompanyy M byy 50%, Comppany GG by mmore tthan 3300%. Are tthese saless reall (willl cassh colllectiions mmateriializee)? Iff theyy are growwing ttoo faast, it maay be advissable to maake thhe loaan butt alsoo to fforce the ccompanny to curtaail itts groowth uuntil CFO ccatchees up. One way tto v

39、errify wwhetheer thee gap is thhe ressult oof salles too poorr creddit riisks iis to checkk if tthe grrowth in reeceivaables is pproporrtionaal too the saless growwth. SSimilaar cheecks ccan bee madee for the ggrowthh in iinventtoriess and payabbles. In thhis caase, tthe innventoory off M coompanyy

40、has doublled frrom 19996 too 20000 whille COGGS inccreaseed by only 56%. The iinventtory iincreaase woould bbe onee areaa to iinvesttigatee furtther.There iis a ssignifficantt diffferencce in the iinvesttment patteern off the two ccompannies. Compaany M has mmade ppurchaases oof PPEE eachh yearr, wh

41、iile Coompanyy G haas madde litttle nnet innvestmment iin PPEE overr the periood. Yeet Commpany G hass growwn mucch fasster. Does this refleect thhe natture oof thee busiiness (Comppany GG is mmuch lless ccapitaal inttensivve) orr has Compaany G used off bbalancce sheeet fiinanciing teechniqques?The

42、 cassh froom finnancinng pattternss of tthe twwo commpaniees alsso difffer. Both triplled thheir ttotal debt over the pperiodd and increeased the rratio of tootal ddebt tto equuity. Givenn Comppany MMs sllower growtth (inn salees andd equiity), its ddebt bburdenn has grownn muchh moree rapiidly. Des

43、piite thhis, CCompanny M hhas coontinuued too pay dividdends and rrepurcchase stockk. Commpany G hass not paid dividdends and hhas isssued new eequityy. Theese twwo facctors accouunt foor itss largger inncreasse in equitty froom 19996 to 2000.Based oonly oon thee finaanciall dataa provvided, G loook

44、s llike tthe beetter crediit rissk. Itts salles annd inccome aare grrowingg rapiidly, whilee Ms incomme is stablle to decliining on moodestlly groowing saless. Unlless ffurtheer invvestiggationn channges tthe innsightts disscusseed herre, yoou shoould ppreferr to llend tto Commpany G.5.La. (i)Statem

45、eent off Cashh Flowws - IIndireect Meethod Caash frrom opperatiions:Net inccome$1,0880Add nonncash expennse: ddeprecciatioon 6000Add/Subbtractt channges iin worrking capittal:Accountts recceivabble(150)Inventoory(200)Accrualls 80Accountts payyable 120 (1550) $1,5300Cash frrom innvestiing:Capitall ex

46、peendituures 1,1500Cash frrom fiinanciing:Short tterm bborrowwing 5550Long-teerm reepaymeent (3998)Dividennds (4432) $(280)Net chaange iin cassh $ 1000Workshheet ffor (IIndireect MMethodd) Cassh Floow Staatemennt IncomeBalancee SheeetCashStatemeent12/31/00012/31/001ChangeEffectNet inccome$1,080 $1,0

47、800Depreciiationn 600 6000Accountts recceivabble $1,5000 $1,6500 $150 (1500)Inventoory 2,0000 2,2000 200 (2000)Accrualls 8000 8800 80 800Accountts payyable 1,2000 1,3200 120 1200Depreciiationn (6000) (6000)Net fixxed asssets 6,5000 7,0500 550 (5500) Capittal exxpendiituress$(1,1500)Note paayablee 5,

48、5000 6,0500 550 5500 Shorrt-terrm borrrowinng $ 5500Long-teerm deebt 2,0000 1,6022 (398) (3988) Long-term debt repayyment $ (3988)Net inccome (1,0800) (1,0800)Retaineed earrningss 5000 1,1488 648 6488 Dividdends paid $ (4322)_ 0 $ 100The worrksheeet to creatte thee cashh floww stattementt is ppresen

49、nted aabove. Eachh balaance ssheet changge (otther tthan ccash) is acccountted foor andd matcched wwith iits coorresppondinng acttivityy. As a lasst cheeck, tthe neet inccome aand thhe addd-backks of non-ccash iitems are bbalancced annd “cllosed” to thheir rrespecctive accouunts (PP&E and rretainned

50、 eaarninggs) prrovidiing thhe amoounts of caapitall expeendituures aand diividennds.a. (ii) Stattementt of CCash FFlows - Dirrect MMethoddCash frrom Opperatiions: Cashh colllectioons $9,8550 Cashh paymments for mmerchaandisee(6,0880) Cashh paidd for SG&A(920) Cashh paidd for interrest(600) Cashh pai

51、dd for taxess(720)$1,5300Cash foor Invvestinng Acttivitiies:Capitall expeendituures(1,1500)Cash foor Finnancinng Acttivitiies:Short-tterm bborrowwing 5550Long-teerm deebt reepaymeent ( 3998)Dividennds ( 4322)$( 2800)Net Chaange iin Cassh $ 1000The worrksheeet to creatte thee cashh floww stattementt

52、is ppresennted bbelow. Eachh balaance ssheet changge (otther tthan ccash) is acccountted foor andd matcched wwith iits coorresppondinng acttivityy. Furrthermmore tthe opperatiing acccountt channges aare maatchedd to ttheir correespondding iincomee stattementt itemm. As a lasst cheeck, tthe neet incc

53、ome iis ballancedd and “clossed” tto rettainedd earnnings proviiding the aamountt of ddivideends.Note thhat thhere iis no diffeerencee betwween tthe inndirecct andd direect meethodss in tthe caash fllow sttatemeent annd in the wworkshheet ffor caash foor invvestinng andd finaancingg actiivitiees, Wo

54、rkksheett for (Direect Meethod) Cashh Floww StattementtIncomeBalancee SheeetCashStatemeent12/31/00012/31/001ChangeEffectSales$10,0000$10,0000Accountts recceivabble$ 1,5000$ 1,6500$ 150 (1500) Cash Colleectionns$ 9,8500COGS (6,0000) (6,0000)Inventoory 2,0000 2,2000 200 (2000)Accountts payyable 1,2000

55、 1,3200 120 1200Cash Paaid foor Merrchanddise$(6,0800)SG&A exxpensee (1,0000) (1,0000)Accrualls 800 880 80 800 Cash Paid for SSG&A$ (9200)Interesst exppense (6000) (6000) Cash Paid for IIntereest$ (6000)Taxes (7200) (7200) Cash Paid for TTaxes$ (7200)Depreciiationn (6000) (6000)Net fixxed asssets 6,

56、5000 7,0500 550 (5500)Capitall Expeendituures$(1,1500)Note paayablee 5,5000 6,0500 550 5500Short-tterm BBorrowwing$ 5500Long-teerm deebt 2,0000 1,6022 (398) (3988) Long-term Debt Repaiid$ (3988)Net inccome (1,0800) (1,0800)Retaineed earrningss 500 1,1488 648 6488 Dividdends $ (4322)_ _$ 0 $ 10006.La

57、.Exhibbit 3PP-3 dooes noot proovide the (changges inn the) indiividuaal commponennts thhat maake upp the changges inn workking ccapitaal. Ass suchh, to creatte thee direect meethod cash flow stateement, we mmust oobtainn the inforrmatioon dirrectlyy fromm the balannce shheet. This proceedure does no

58、t nnecesssarilyy yielld thee samee cashh floww compponentts usiing thhe dirrect mmethodd as tthose proviided bby thee comppany iin itss indiirect methood callculattions. Diffferencces maay ariise whhenthere aare accquisiitionss/diveestmenntsthere aare fooreignn exchhange adjusstmenttsthe firrm agggr

59、egattes orr classsifiees invvestinng acccrualss togeether with operaating ones.In thiss casee, thee diffferencces arre minnimal as inndicatted beelow. (The calcuulatioons reequireed forr the direcct metthod ccash fflow sstatemment aare prresentted inn Exhiibit 33S-1 aalong with the aassumpptionss us

60、edd to ggeneraate thhe staatemennt)Direct Methood Cassh Floow Staatemennt(Exhibiit 3S-1)Indirecct Metthod (Exhibbit 3PP-3)DiffereenceCash coollecttions$348,6227Cash foor suppplierrs (246,1100)Cash exxpensees (94,7791)Interesst paiid (5,3303)Tax paiid (2,1127)Cash Frrom Opperatiions$ 4,5660$4,398$ 16