IMBA财政会计9合集课件

1、This weeks individual HWPage 197 of In-class exercises ONLY赚希答壤赖墅剔戮烃麻卿剑全狞缆摹枷售沦睡猎忽毁垣棵诸纽殴戌窿杰驭IMBA财政会计9IMBA财政会计91This weeks individual HW赚希答壤赖The Qualities of a Good Analyst Report FormatProfessional layoutsSmoothly divided into sectionsSections logically structured and connectedClearly worded钥无策茄派鸵淖灶诗

2、堑猎革扒徽腊浓孽打猛痞郎囚延埋挑向稽堵殆奢郡疵IMBA财政会计9IMBA财政会计92The Qualities of a Good AnalysThe Qualities of a Good Analyst Report Contents1.Summary of analysis2.Introduction of covered company2.1 Industry analysis2.2. Company analysis3.Quality of earnings analysis4.Profitability analysis5.Growth analysis 6.Earnings fo

3、recasts7.Risk analysis8.Valuation9.Recommendation脏百楼匠朴孝挚资杖研窟弦丸斡婿四嫉庄尿哭谱奸懂侩詹他汾锥酉毅检枯IMBA财政会计9IMBA财政会计93The Qualities of a Good AnalysThe Qualities of a Good Analyst ReportComments:Be aware, you make a living (a nice apt., a decent wedding, a good education for your child, a comfortable retirement plan)

4、 from selling your analyst reports to investors. You do not have to STRICTLY follow the aforementioned format. Use the format that you believe sells your analysis well.Be creative!Be professional!Be Ethical!疑绥斤炸辈朱健矩葵擒镐枫规海搬剧膏枣螺陋观轧什郁岛嚼锋镰过馁器猜IMBA财政会计9IMBA财政会计94The Qualities of a Good AnalysImportant da

5、tesDecember 3, NO CLASS, preparation for report and presentationDecember 17, report DUE, turn in a hardcopy in class, and email me an electronic copy. Electronic copies to be placed on class websiteDecember 24, presentation. Starts at 8:30, 20 minutes for each group. Before presentation, I randomly

6、choose ONE presenter from the group.Feel free to come to discuss your project with me!汛青驰垫南控喜播涯渝劲铺归锰瘩趴普妒嵌涎地雁金溅仗纬傲绊尸量脆冗IMBA财政会计9IMBA财政会计95Important datesDecember 3, NO Grading GuidelineThe format and contents of the reportThe format and contents of the presentationThe presenters 精神面貌The way to handle

7、 questionsEnglish is lesser an issueI accept challenges to grading, but reserve the rights to make the final judgment!支狈摆论悄氰佛雌潦胚忱即屏咸咸刻庄突歇本爱容胃褥埃余碟栖物肃玄鞋IMBA财政会计9IMBA财政会计96Grading GuidelineThe format anObligation A social, legal, or moral requirement, such as a duty, contract, or promise that compels o

8、ne to follow or avoid a particular course of action. () 镶夸手肝奴隘租方邹撰残圭迷茄杰阀妥绞庞定榨摹村乏闲耽梯交淋公轴鄂IMBA财政会计9IMBA财政会计97Obligation A social, legal, orLiability RecognitionAn obligation is a liability if:1. It involves a probable future sacrifice of resources and the amount of the sacrifice can be reasonably prec

9、isely measured.2. There is little or no discretion to avoid the transfer3. The transaction or event that gives rise to the obligation has already occurredA mutual promise (or executory contract) is not a liability because of item 3 above. This is, signing a contact is not a transaction.An example of

10、 a mutual promise is the customer promises to pay and the firm promises to deliver goods at a date. If this promise is in the form of a legal contract, it may give both parties rights but the rights are not yet considered assets and the obligations are not yet considered liabilities, because the tra

11、nsaction specified in the promises has not yet occurred. 男刘侣堵骚焉寄屉寨端框疯言乐裹认肋疡渗首瞳峻预阮亢修锹嫁监摈肇脆IMBA财政会计9IMBA财政会计98Liability RecognitionAn obligaClassifications of Accounting Liabilities by Degree of Certainty on repayment dates and repayment amountsRead examples 1-9 on 450 of Stickney and Weil吕陛硼耽米碳貌秧肇饵尔预

12、境披隅莎走咆坐辉挫丁盛董讯卓拉南俐焕疾垫IMBA财政会计9IMBA财政会计99Classifications of Accounting Accounting Items: Recognized versus DisclosedAccounting items whose economic impact on the firm can be measured with reasonable precision, are recognized in the I/S or B/S, such as the liabilities to the left of the dividing line i

13、n the previous slide.Accounting items whose economic impact on the firm can NOT be measured with reasonable precision, are sometimes disclosed in annual reports, such as contingency liabilities to the right of the dividing line.赠狼梨问捧罚锥乳居惋貌僵攻尊讥垂于巢缄圣外妙戮淮八问湛厘强仿腕迪IMBA财政会计9IMBA财政会计910Accounting Items: Re

14、cognized vContingencies: Potential LiabilitiesContingent liabilities are potential liabilities related to past events.The more probable the potential to become a legal obligation, the greater the rationale for recognizing it as a liability.Probability of a potential liability is very difficult to me

15、asure.In general, an obligation should be recognized as a liability if it is probable that the firm will have make future sacrifices of resources.Of course, the word probable is also difficult to measure. Contingencies are normally disclosed in footnotes.But, FASB and IASC require the recognition of

16、 a loss and a contingent liability, when, given past events, It is probable that an asset has been impaired or a liability incurred, andThe amount of the loss can be reasonably estimated.照混矢喧慧衣硝苛逼缔渭婉筏丁他郭噬博搪米坤搽化萄腮货参州惺融稠嚎IMBA财政会计9IMBA财政会计911Contingencies: Potential LiabiLiability ValuationIn general,

17、liabilities are presented on the balance sheet at the present value of payments needed to fulfill the obligation.Present value refers to discounting the nominal payments by an interest rate appropriate for the firm.Discounting is a mathematical computation whereby future flows are reduced to reflect

18、 the concept that money has time value. (See Appendix A at the back of the text.)Current liabilities are not generally discounted because of the short period of time until they are to be resolved. The short period of time would cause the amount of any discount to be small enough to be considered imm

19、aterial.亏寺鸭舍栽瑰郭皮捷犁死颖氯汉万觅襄烂侣私假孜焊荔易凰佬嗓毖忧懊榨IMBA财政会计9IMBA财政会计912Liability ValuationIn general,Liability ClassificationLiabilities are separated into current and noncurrent based on the length of time that will elapse before the obligation must be fulfilled.Current liabilities are obligations that must b

20、e fulfilled within the current operating cycle which is almost always one year.Noncurrent liabilities are obligations that need not be fulfilled within the current operating cycle.Obligations calling for periodic payments such as a mortgage may be noncurrent but have a current portion; that is, the

21、payments due within the operating cycle are current but the remaining payments are noncurrent.曹招糯驱知哩久沾芭堪扦负趁靳潞基束论减具凹媒仓诉轻寇株垄拎腊臆尼IMBA财政会计9IMBA财政会计913Liability ClassificationLiabilCurrent Liabilitiesa. Accounts payableb. Short-term notes and interest payablec. Wages, salaries and other payroll itemsd. I

22、ncome taxes payablee. Deferred performance liabilities: advances from customersf. Deferred performance liabilities: product warranties行寥越垣卞都捧秆诉娟肄烛檬粉贸厦享迷倒位渭歉券乱迈么绘携耪仗醇绅IMBA财政会计9IMBA财政会计914Current Liabilitiesa. AccountsAccounts Payable to CreditorsBusiness firms often buy and sell to each other on cred

23、it.Amounts owed to other businesses for services or goods are called trade accounts payable. Typically these are short-term liabilities.Typically, a payment grace period is allowed before these obligations must be fulfilled (or paid).A grace period may be 30 days or more.Because such a grace period

24、represents interest-free borrowing, the prudent firm takes advantage by paying exactly on time but not before. Rarely, a firm is more aggressive and always pays late, but a late charge may be assessed and such a firm will develop a reputation which may affect the terms they can negotiate.针逆肋咳鸳白蹭嚎诌蹲特

25、长拙白郊段舒碱涉挫摩坏投愁稼檬郸道涛通熟驰IMBA财政会计9IMBA财政会计915Accounts Payable to CreditorsBShort-Term Notes and Interest PayableA note payable is a form of short term borrowing.The note accrues interest expense and interest payable at a stated rate over time.The total amount of the note and the interest are mostly due

26、as one payment upon maturity of the note.右湛咳朔屏厕或奸贡讳襄举叁疮祝朵粥酱奸馏怨雨姿憋伏淹哪携犊糖加挂IMBA财政会计9IMBA财政会计916Short-Term Notes and Interest Wages, Salaries and Other Payroll ItemsEmployers pay workers directly in cash and in the form of benefits - this gives rise to payroll expense For example, vacation time may be

27、earned over time. The firm pays taxes on this benefit as it is earned and a liability to the worker is recorded. When vacation is taken, the liability is reduced.Employers also pay some taxes that relate to the workers - these are tax expenses.防僳弄绿推嫌阎拳只郑粪坟野秉玻婆懊沁先哗呐同腔稼套拢拼揭氮文蚕冷IMBA财政会计9IMBA财政会计917Wage

28、s, Salaries and Other PayrIncome Taxes PayableU.S. and most countries tax business income.Corporations are taxed directly.Partnerships and sole proprietorships are not taxed but the income is assigned to the partners or proprietor who must then pay the tax.Income taxes are assumed to accrue; that is

29、, the income tax liability increases as the firm earns income.Tax rules also call for periodic payments to the IRS.So that business income taxes are estimated and paid throughout the year.The annual filing deadline (March 15) is a reporting deadline and not a payment deadline; payment in many cases

30、is required earlier.In addition, GAAP allows for differences between income tax expense (an accrual concept) and income tax liability (the amount owed to IRS). This is covered in a later chapter under deferred tax accounting.衅奈佐接罪碾乍子疑何圃许哀尼树阿住疾物申棍贬嗽迁床能棍岛倾瞒擂应IMBA财政会计9IMBA财政会计918Income Taxes PayableU.S

31、. and mDeferred Performance Liabilities: Advances from CustomersA mutual promise (the customer promises to pay and the firm promises to deliver) is not recorded.However, if the customer pays in advance, then there is an obligation that arises and the firm records this as an increase in an asset (cas

32、h) and an increase in a liability (advances from customers, unearned revenues).The obligation is for the firm to either fulfill its promise to deliver goods or services within the specifications of the contract or return the cash.An example is a magazine subscription which is typically paid in advan

33、ce. The subscription is an obligation to produce and deliver the magazine. When a magazine is delivered, the obligation can be reduced (debited) and revenue can be recognized (credited) because it is then earned.倚轩雾校贤罐沫低檬峭琅夕遥颧俱咀炳斜蛙技肯谚讼嗡渠笼睬赏丸虫告施IMBA财政会计9IMBA财政会计919Deferred Performance LiabilitiDeferr

34、ed Performance Liabilities: Product WarrantiesA warranty is a promise to repair or replace the good but is limited by time.When goods with a warranty are sold: revenue, the warranty expense, and the warranty liability are recognized. The amount of the liability must be estimated.When a claim is made

35、, the warranty liability is reduced (debited) and what is given to fulfill the claim (cash or new goods or parts and labor) are credited.Any unused portion of the warranty expires at the end of the warranty period reducing the liability and creating a gain.催妊贱婉到出啤棵函媚荒能搅咙浦齿宴盛庸帝怪诣兼凿夸忙够墟迭尔拈徽IMBA财政会计9IM

36、BA财政会计920Deferred Performance LiabilitiLong-Term Liabilitiesa. Bondsb. Mortgages甘察韭摸膀点溺假龄丘常空睁阴潮赐杭朋尸荆赶迸旦概手烹匪鲁毖宜秘责IMBA财政会计9IMBA财政会计921Long-Term Liabilitiesa. Bonds甘Procedures for Recording Long-Term LiabilitiesWhereas short term liabilities may be paid at maturity, long-term liabilities are more commo

37、nly paid in installments.Also, the general rule is that long-term liabilities are recorded at the present value of the payments.The accountant distinguishes between payment of the liability (the principle) and payment of interest (an expense of financing).Commonly, the principle, the periodic paymen

38、ts and the interest rates are explicitly stated in the debt contract.If not, then discounted cash flow methods may be used to separate out the interest payment.The rate of interest that equated the present value of a given set of periodic payments with the principle is called the internal rate of re

39、turn or discount rate).If you are confused with this slide, please skip and return after Finishing this chapter.娃炼干战局荣注礼宋挂衫豁辛询忽跑浅晌漱范煞鳞洋福楚巍侥盖聚狂请笔IMBA财政会计9IMBA财政会计922Procedures for Recording Long-Long-term Liabilities:Interest ImputationSome contracts do not explicitly state interest payments, instead

40、 the purchase price may include carrying charges.There is no economic concept of an interest-free loan. The interest may not be expressed, but it is there. The IRS agrees and will require the tax payer to calculate interest payments even if the contract does not specifically state a rate of interest

41、 (called implicit or imputed interest).GAAP agrees and requires that long term liabilities be recorded at their present value and that repayments be separated into interest expense and reduction of the liability.Where interest rates are not stated, they can be computed using present value methods an

42、d using the know payments withAn estimate of market value (which becomes the PV), orAn estimate of the interest rate for similar debt.If you are confused with this slide, please skip and return after Finishing this chapter.尿波盎骗畜险腹凳狼证滁靴壳灭沮爬坐饺顿挽奔泅奠尖入钦并圃保素袖纬IMBA财政会计9IMBA财政会计923Long-term Liabilities:Int

43、eresBondsBonds are debt instruments sold to the investing public.Some bonds carry no collateral（担保） and are called debenture bonds.Bonds backed by collateral are called collateral trust bonds.Bonds that can be converted to common shares of the issuing company are called convertible bonds.Bonds are r

44、ecorded as a long-term liability.教品斟豁拾阻盔宰酬怪饼狐灵慨援袄哪轻龚昔拈郁辩丢船蘑贸读坟携疆匝IMBA财政会计9IMBA财政会计924BondsBonds are debt instrumentHow to define a bond?1. A piece of paper2. Face value (or par value): for example $1,0003. A nominal （名义上的） interest rate: for example 10% (the rate is annual rate if not stated otherwi

45、se. Semiannual rate is half of it at 5%).4. Duration: number of years before the principle is due, for example, 5 years5. Frequency of nominal interest payment in a year: annually pays once a year; semiannually pays twice a year (so a five-year bond would have ten semiannual periods)削蹬凳轮逾措桃渗坞玉秽贾该驱燃拣

46、掐庇孵仓妆聘岗抱烁腮盎脯戎逢淹重IMBA财政会计9IMBA财政会计925How to define a bond?1. A piecHow to define a bond?The definition of a bond is the pattern of its cash payments to the bondholders, nothing else(STOP: This is the first important concept in bond accounting, you must understand before you go on)The bond in the prev

47、ious slide is defined as:This bond is defined by ten $50 payments of nominal interests every half a year (semiannually); and a payment of par value $1,000 at the end of the fifth year.$50$50$50$50$50$50$50$50$50$50$1,000抗逛茅婉徒要触举窖宦嗣鸦硝遮袒萄耕饮烤瀑溺糕联罢缸量粉英历肇董邓IMBA财政会计9IMBA财政会计926How to define a bond?The def

48、inHow much will this bond sell for?Like any investment vehicles, the price of a bond is the net present value of its future cash payments (NPV)The bond price and the par value of the bond are totally two different things, they do not have to be the same. The previous bond can be sold more than or le

49、ss than the par value $1,000.(STOP: This is the second important concept in bond accounting, you must understand before you go on)I assume you have learnt NPV calculations, and The use of present value tables.抢盈放福这寅懂意悦喇哑劫拆粕魁撩辱穿葛款救课晰夜扯遂威炔谆忱殃甥IMBA财政会计9IMBA财政会计927How much will this bond sell fHow much

50、will this bond sell for?The rate of return that we use to discount the cash flows to get NPV of the bond is called discount rate（折现率）.Discount rate is decided, at the time of the bond sale, by the risk associated with the bond. If it is more (less) likely for the bond seller to default in the future

51、, the discount rate will higher (lower).Microsofts bond discount rate may be 4.8%, while a small food chains bond discount rate has to be 10.7%.Discount rate has nothing to do with the bonds nominal interest rate; nominal interest rate only determines the cash payments ($50 each in this case).(STOP:

52、 This is the third important concept in bond accounting, you must understand before you go on)何脚辫忙自锨榜勋谆蒋卉邵跌傣亭渍先富韧估蛙携复懂曼居廖塑忆邯首贱IMBA财政会计9IMBA财政会计928How much will this bond sell fHow much will this bond sell for?-sold at parLet us assume the previous bonds discount rate is 10% (this 10% has nothing to

53、do with the 10% nominal interest rate).Then the bond price is = 50/(1+5%) + 50/(1+5%)2 + 50/(1+5%)3 + 50/(1+5%)4 + 50/(1+5%)10 + 1000/(1+5%)10 = $1,000 Why we use 5% discount rate not the 10%? Because the $50 nominal interest payment is for half a year. We use 10 periods because five years make up t

54、en half-a-years.When bond price is equal to bond face value, we say it is sold at par.You should not rely on any calculator or tables to compute the bond price in the above equation. When nominal interest rate (5%) is the same as discount rate (5%), the bond is sold at par value.(STOP: This is the f

55、ourth important concept in bond accounting, you must understand before you go on)遣荣烧男病擂型励嘻灵怂到妥栗腑税捡疲侵啮灭蒙并心伎解涤寒笨姚蒂圾IMBA财政会计9IMBA财政会计929How much will this bond sell fHow much will this bond sell for?-sold at premiumLet us assume the previous bonds discount rate is 8% (that is, it is less riskier than i

56、n the previous slide to lend to the company so a lower discount rate is used).Then the bond price is = 50/(1+4%) + 50/(1+4%)2 + 50/(1+4%)3 + 50/(1+4%)4 + 50/(1+4%)10 + 1000/(1+4%)10 = $50*8.11081 + $1,000*0.675562=$1,0811 Stickney and Weil page 855, 4% at n=102 Stickney and Weil page 853, 4% at n=10

57、Premium = $1,081 1,000 = $81When bond price is more than bond par value, we say it is sold at premium.挤禁阅讲掠伙帚逛韦酋旋标巧赘淌误圃达笋螟篆关股房钞华澳道刚疚卡垄IMBA财政会计9IMBA财政会计930How much will this bond sell fHow much will this bond sell for?-sold at discountLet us assume the previous bonds discount rate is 12% (that is, it

58、 is more riskier than in the previous two slide to lend to the company so a higher discount rate is used).Then the bond price is = 50/(1+6%) + 50/(1+6%)2 + 50/(1+6%)3 + 50/(1+6%)4 + 50/(1+6%)10 + 1000/(1+6%)10 = $50*7.36009* + $1,000*0.55839*=$926* Stickney and Weil page 855, 6% at n=10* Stickney an

59、d Weil page 853, 6% at n=10Discount = $1,000 926 = $74When bond price is less than bond par value, we say it is sold at discount.稳呵瞧宾七赞问疟恨纷多也陵色摸捧实杨惰歪衬帕峦氰辈瑰怎舀屁组哮乐IMBA财政会计9IMBA财政会计931How much will this bond sell fHow much will this bond sell for?-summarySold at premiumSold at parSold at discountNomina

60、l Interest rate10%10%10%Discount rate8%10%12%Bond Price (cash received by the bond seller)$1,081$1,000$826Understand price difference-technicalIn the bond price equation, compare to sold at par, the numerator is the same, but denominator is smaller, then the result gets largerIn the bond price equat