五粮液财务分析报告作业英文版

CorporateFinanceAssignmentAnalysisreportofWULIANGYEYIBINCO.,LTDGroupmembers:杨旭祥0920010304张菁0904020085杜泽薇0917010020林绳业0920010156汪雪霁0920010235刘欢0911030045December5,2010Totalwords:1999(withoutappendix)ContentsTOC\o"1-5"\h\zAbstractpage3Introductiontothecompanypage3Financialratiospage3Calculationsandanalysispage5Conclusionpage12Appendixpage13AbstractOurgroupanalysethemajorratiosofWuliangyebyusingtechniquesoftime-trendanalysisandpeergroupanalysis.Wechoosetheyear2006,2008and2009todothetime-trendanalysis.Asforthepeergroupanalysis,wechooseLuzhoulaojiao,Guizhoumaotai,ShanxifenjiuandTuopaiqujiutogettheindustryaveragelevelandmakeacomparison.IntroductiontothecompanyWuliangyeYibinCompanyLimitedislocatedinYibinSichuanprovince.Wuliangyeisoneofthemostfamouswhitespiritanditisawell-knowntrademarkinChina.Thecompanydistributesitsproductsalloverthedomesticmarketandexportstooverseasmarkets.Italsoproducesotherproducts.Asawhole,Wuliangyeisacompanywithdeepenterpriseculture.Financialratios(1)Short-termsolvencyCurrentratio:(currentassets)/(currentliabilities).Thehigheroftheratio,thericherofafirm’scapitalturnoverandthestrongerofthefirm’ssolvency.Currentratioisafirm’srepresentativeindicatortoevaluatethesolvency.Theworld’suniversallyacknowlegedcriterionis2:1.Quickratio:(currentassets-inventory)/(currentliabilities).Itisameasureofacompany’sliquidityandabilitytomeetitsobligationsT.hegeneralcriterionis1:1(2)Long-termsolvencyTotaldebtratio:(totalassets-totalequity)/(totalassets).Forthecreditors，Thehigherofthefirm’stotaldebtratio,themoreliabilitiesithasanditmayhaveahighpotentialprofitmargin,butatthesametime,theyhaveahighloanrisktotakeon.(3)AssetManagement,orTurnover,MeasuresInventoryturnover:(costofgoodssold)/inventory.Thefasterthisturnoveris,thestrongertheliquiditywillbe,sohighinventoryturnoverratioshowsthatthefirmisabletochangedirectionsquickly.Receivableturnover:Sales/(accountsreceivable).Itrepresentstheabilitythatthecompanyreceivingtheirpayment.Themanagementefficiencyisgoodwhentheratioishigh.Totalassetsturnover:Sales/(totalassets)I.tmeasureshowefficientacompanyuseitsassets.ProfitabilityMeasuresProfitmargin:(netincome)/sales.Itmeasureshowmuchthecompanycanearnperdollar.ROA:(Netincome)/(totalassets).Itgivestheideathathowefficientthemanagementisatusingitsassetstogenerateearnings.ROE:(Netincome)/(totalequity).Itmeasuresacompany’sprofitabilitybyrevealinghowmuchprofitacompanygenerateswiththemoneyofshareholdershaveinvested.MarketValueMeasuresPrice-earningsratio:(Pricepershare)/(earningspershare).Itmeasureshowmuchinvestorsarewillingtopayperdollarofcurrentearnings,highPEsareoftentakentomeanthatthefirmhassignificantprospectsforfuturegrowth.Ofcourse,ifafirmhasnooralmostnoearnings,itsPEwouldprobablybequitelarge.Market-to-bookratio:(Marketvaluepershare)/(bookvaluepershare).Itcomparesthemarketvalueofafirm’sinvestmentstotheircost.CalculationsandanalysisSolvencySolvencyisanimportantindextoreflectafirmsfinancialconditionandoperatingability.Alowsolvencynotonlyreflectsthatthefirmdoesn\haveenoughmoneytomeettheneedbutalsoreflectsthefirmmaynothavetheabilitytopaythedebt,evenwiththerisktofacebankruptcy.Short-termsolvencyCurrentratioandQuickratioWULIANGYEYIBINCO.,LTD

currentratioandquickratioBcurrentratio(liiueE)■quickratio(times)Wuliangyescurrentratiofrom2006to2009increasesatfirstandthendecreases.Theratioin2006and2009isabout2,whichreflectsthatthefirmhasahealthyoperatingbehavior;buttheratioin2008is4.28.Forthefirm,ahighcurrentratioindicatesliquidty,butitalsomayindicateaninefficientuseofcashandothershort-termassets,whichshoulddrawthefirm'sattention.Asforthequickratio,thetrendisthesamewithcurrentratio.Intheyear2006and2009,thefirm'sratiosareabout1.5.Althoughitishigherthanthegeneralcriterion,whichequalsto1,itmaintainsstableinarelativeway.Thevalueis3.27in2008andthisgreatlyexceedingthegenerallevel.Itisprobablythatthefirmoccupysmorecashinquickassetsandthiswillleadtoaincreaseoftheopportunitycosttoinvest.Weshouldnotice:Althoughthequickratioexceeds1,ifthemostpartofcurrentassetsisaccountsreceivable©highquickratiocOnindicatethefirmhasapowerfulsolvency.Thereasonisthatitisuncertaintodecidewhetherthefirmcangetbacktheaccountsreceivableornot.Sowhenwecomestoevaluatequickratio,weshouldalsoanalysethequalityofaccountsreceivable.Aswereferstotheindustry,theindustrysaveragelevelin2009is2.26andWuliangyesdataislowerthanthatwhichindicatesthatthefirm'ssolvencyislowerthantheindustry'saveragelevel1.39,butthefirmmaintainsarelativegoodquickratio.Long-termsolvencyLong-termsolvencyisafirmsabilitytotakeonthedebtandtheabilitytopaythedebt.Itisaimportantindicatortoreflectacompany'sfinancialsafetyandthestabledegree.TotaldebtratioWULIANGYEYIBINCO.,LTD

totaldebtratioaverage■totaldebtratio(timei?)levelFromtheyear2006to2009,Wuliangye'stotaldebtratioincreasesfirstandthendecreases.Thefirsttwoyearsratioislowerthan0.2.Intheyear2009,thefirmstotaldebtratioreachtheindustrysaveragelevelwhichequalsto0.3.ThereisnodoubtthatWuliangyecorporationandthewholeindustryareinanormallevelBusinessefficiencyFirmsbusinessefficiencymeanshowtheenterprisecancreatehigherprofit.Iftheefficiencyislow,thecompanywouldtkeeptheirhighprofit.

InventoryturnoverratioInventoryturnover工521.50.5200620082009Inventoryturnover(times)ay工521.50.5200620082009Inventoryturnover(times)ayera£elevel00IndustryFromthegraphwefindthattheinventoryturnoverratioofWuliangyein2009isabout1.39timesmeanwhiletheindustrysaveragelevelisonly0.78times.SoWuliangyecancontroltheircashflowbetter.Butwecanseethecompanysinventoryturnovergreatlydecreasesbetween2006and2009.Soweguesstherearesomeleakinthemanagementprocess.sthardforthefirmtokeeptheircompetitiveadvantageifnotrepairingthevulnerabilities.ReceivableturnoverratioWULIANGYEYIBINCO.,LTD

Receivables180016001400120010008006004001800160014001200100080060040020002006200909Industryaverage1evel2008receivables(times)FromthegraphwefindthatthereceivableturnoverratioofWuliangyein2009isabout206.29timesmeanwhiletheindustrysaveragelevelisonly149.93times.Sowecanknowthatthecompanyhaslittlebaddebts,fastcashflow,andgoodsolvency.ButthereceivableturnoverofWuliangyedropsfrom1615.71to206.23fromyear2006to2009.ItmaymakepeoplehavenoconfidentwiththemanagementofWuliangye.TotalassetsturnoverratioWULIANGYEYIBINCO.,LTDaveragelevelFromthegraph,thisratiodecreasesgreatlyfrom0.74to0.63andthenhasalittlegrowththatgoingupto0.65inthesethreeyears.Itindicatesthatalthoughtherearesomeproblemsinoperatingfrom2006to2008,butthecompanyfoundabettermethodtooperateinrecentyearsandalsouseditsassetsmoreefficiency.Comparingwiththeindustryaveragelevel,Wuliangyesdataislarger,whichmeansthatWuliangyehasahealthyoperatingcondition.ProfitabilityMeasuresProfitmarginratioWULIANGYEYIBTNCO.5LTD

Profitmarginratio45.00%40.00%45.00%40.00%35.DOS30.00%25.00K15.OOflt10.00%5.00%0.00%20062008200909Industry■ProfitmarginratioaveragelevelAccordingtothedatafrom2006to2009,Wuliangye'profitabilityincreasesstably.Comparingwiththeindustryaveragelevel,itSeasytoseeWuliangyehasahigherlevel.SoWuliangyehasmorecompetitivenessinsameindustry.Ontheotherside,Wuliangyealsohasahighreturnonassetsandequity.Thereturnonassetsandreturnon

equityWULCANGYEYIBfNCO,.LTD

ROAandROE3n00%30.00%25.00%3n00%30.00%25.00%20.00%15.00%1d00%5.00%500%20062008200E)■ROA■ROE09InduetryaveragelevelReturnonassets:Fromthegraph,ROAincreasesgreatlyofabout11%from2006to2009.Itindicatesthattheinternalgrowthrateisinaverygoodlevel.SoWuliangyeneednottoborrowmorecapitaltoissuenewstock..Thankstothe4%largerthanindustrylevel,Wuliangyehasmoreabilitytodevelopthanothers.Returnonequity:From2008to2009,ROEincreases11%greatly.ItindicatesthatWuliangyesearningcapacityisonahighlevel.Duetothelargerdata,Wuliangyecandrawmoreattentionandgainmoresupportfromstockholderssothatitwillacquiremoreinvestandenterapositivecircle.MarketvalueanalysisMarketvalueisthepriceofanassetandcanbeacceptedbythecontractingparties.Itcanreflectthepowerofoneenterpriseinthesocietyandmarket.Price-earningratioWULIANGYEYIBINCO.,LTD■pricfj-eaiTiingratioFortheP/EratioofWuliangye,from2006to2009(except2007),itincreasesyearbyyearfor29.84%,34.82%,37.03%respectively.Itrepresentsthattheinvestorsarewillingtopaymoreandmoreforonedollarofcurrentearnings.Accordingtothissituation,wecanlearnthatWuliangyehasabrightfuture.Comparingwiththeindustryaveragein2009,Wuliangyeislessthanthat.It

appearstohavemorespaceforWuliangyetodevelop.Market-to-bookratioForthemarket-to-bookratioofWuliangyefrom2006to2009(except2007),ithasarapidgrowthinthesethreeyearsfrom3.57%to8.41%.Everytwoyearshasnearly30%growth.Wuliangyesmarket-to-ratiosinthesethreeyearsareallmorethan1,soweknowthiscompanyhasbeensuccessfullyincreatingvalueforitsstockholders.Butwhenyouscantheindustryaverage,youwillfindthatthecostwhatyouneedtopayofWuliangyeislessthantheaveragelevel.Fromthestandpointofinvestment,thelowermarket-to-bookratioofonestockis,thehigheraninvestmenttheybecomeanywayandviceversa.SothereismorevaluetoinvesttoWuliangyecomparingwiththeothersinthesameindustry.ConclusionByanalysingthedatas,weknowthattheWuliangye’stotal-debthasincreasedinrecentyearsanditreachsto0.3timesin2009.Forcreditors,thehigherofafirm’stotaldebtratio,thehigherrisktheymaytakeon.However,fromthestandpointofthefirm,anappropriatetotaldebtratiowillhelpsinbringingaleveragebenefittothefirmbecauseanyfirmcanabtainbenefitaslongastherevenueratioexceedstheinterestratioandafirmcandevelopquicklythroughthewayofaccumulatingcapitalundertheconditionofhavingnoeffortonthecontrolofthefirm.ThedebtscaleofWuliangyeissafeatpresent.Atthesametime,thesalesrevenueofthefirmhasareletivehighincreaseandwecanconsidertoadditsdebt,butitalsomayhaveafinancialcrisisbecauseofasustainedincreasingdebt.Sothemoderatetotaldebtratioisabout0.4.Ontheotherhand,thecurrentratioandquickratioofWuliangyegoupto4.2timesand3.2timesseperatelyfromyear2006to2008andtheseexceedthegeneralcriterion.Althoughbydoingthiscanmakesureahighshort-termsolvency,italsoincreasesthefirm’sinterestburdenandwastingofcapital.Afternoticeofthisproblem,Wuliangyeenhancedbusinessmanagementandadvancedtheavailiabilityofcapitalsothattheratiosdroptotheaverageleveloftheindustrywhichisreasonablein2009.Generallyspeaking,thefirm’ssolvencyisatahealthylevelcomparedwiththeindustryaveragelevel.Asforthemanagementefficiency,thevariousindicatorsofWuliangyearehigherthantheindustryaveragelevel,whichmeansthatWuliangyehasagoodwaytocontrolthecashflowandensureitshighprofit.Buttheindicatorsweredecliningduringthepastfewyearsandthismayhavesomethingtodowiththefirm’smultivariantstrategies.Wuliangyeintroducedhundredsofwinesbesidesitsmajorwine.Itisobviousthatthefirmcanobtainquicksuccessandinstantbenefit.Butinalongrun,thefirmwillfeelshortofabilitytokeepupwiththeindustrylevel.Withoutessentialadjustment,thefirmwilldeclineinthefuturebecauseofthewrongstrategy.Wuliangye’sprofitmargin,ROAandROEareincreasinginrecentyears.Theprofitmarginreachsto41.38%in2009,whichismuchhigherthantheindustry’saveragelevel28.04%andthisindicatesthefirmhasapowerfulprofitbilitywhichresultsinarapidincreaseintheprofitmargin.Meanwhile,itsassetsandequityhaveahighreturn.TheROEandROAincreasegreatlyfromyear2006to2009andthefirm’sinternalgrowthishighsothatWuliangyehasenoughcapitaltosupportitsself-developmentwithoutissuingsharesandbonds.ForthemarketvalueofWuliangye’sstocks,PEratioandMark-etto-Bookratiowererisingsteadilybetween2006and2009,buttheyalsobelowtheindustrylevelin2009andthisindicatesthattheinvestmentriskforWuliangyeislowanditpoccessesgoodprospectandhighvaluetoinvest.

6.AppendixRatioCompany五粮液泸州老窖贵州茅台山西汾酒沱牌曲酒09行业平均值inventoryratio1.39:1.220.260.720.310.78receivableratio206.23148.41344.0650.9750.97149.93totalassetturnoverratio0.650.790.540.930.070.6Profitmargin41.38138.7031.15P21.367.6128.04Returnonassets(ROA)22.0928.2716.6326.392.4819.17Returnon