MBA財政會計實務(wù)英文版課件

Outlineoftoday’slectureValueofafirmtoinvestorsandcreditorsAnalysisofprofitability:ROAAnalysisofprofitability:ROCEAnalysisofprofitability:EPSOutlineoftoday’slectureValu1ThevalueofafirmtoequityinvestorsV=D1/(1+r)+D2/(1+r)2+D3/(1+r)3…….profitabilityriskThevalueofafirmtoequity2ThevalueofafirmtocreditorsV=I1/(1+r)+I2/(1+r)2+I3/(1+r)3+P/(1+r)3

Ii:interestrevenuesinperiodiP:returnofprincipalprofitabilityriskThevalueofafirmtocredito3FinancialStatementAnalysis1.Understandtherelationbetweentheexpectedreturnandriskofinvestmentalternatives,andtheroleofanalysisinprovidingriskandreturninformation.2.Understandtheusefulnessoftherateofreturnonassets(ROA)asameasureofafirm’soperatingprofitability.3.Understandtheusefulnessoftherateofreturnoncommonshareholders’equity(ROCE)asameasureofprofitability.4.Understandthestrengthsandweaknessesofearningspercommonshareasameasureofprofitability.FinancialStatementAnalysis1.4Whattocompare?1. Theplannedratiofortheperiod2. Thecorrespondingratiofromapriorperiod(time-seriesanalysis)3. Thecorrespondingratioforanotherfirminthesameindustry(cross-sectionanalysis)4. Theaverageratioforotherfirmsinthesameindustry(cross-sectionanalysis)Whattocompare?1. Theplanned5AnalysisofProfitabilityReturnonassets(ROA):returntothefirmasawholeReturnoncommonequity(ROCE):returntocommonshareholdersonlyEarningspercommonshareAnalysisofProfitabilityRetur6AnalysisofProfitabilityROA:returntothefirmROCE:returntocommonShareholdersonlyAnalysisofProfitabilityROA:7ReturnonAssets(ROA)ROApresentsprofitabilityindependentofthesourceoffinancingDoesnotconsiderleverageMeasureofhowwellthefirmusesitsassetstogenerateincomeAsifthefirmisfinancedbyequityaloneReturnonAssets(ROA)ROApres8HorriganCorporationYear4SalesRevenue$475Lessexpense:

COGS280Selling53Administrative22Depreciation18Interest16Total

389Nextincomebeforetax

86Incometaxexpense26NextIncome

60HorriganCorporationYear4Sale9HorriganCorporation-assumingnodebtsYear4SalesRevenue$475Lessexpense:

COGS280Selling53Administrative22Depreciation18Interest16-16Total389-16=373Nextincomebeforetax86+16=102LessIncometaxexpense26+4.8=30.8NextIncome

60+16–4.8=71.2HorriganCorporation-assuming10HorriganCorporationROAAveragetotalassetsofthiscompanyinyear4(520+650)/2=585,ThenROA=71.2/585=12.2%Whyaddbackinterestincomenetofincometaxsavingsinthenumerator? 1)Ifallequity,thefirmwon’tpay$16

interest

expense,whichincreasenetincomeby$16; 2)at30%taxrate,governmentwillcollectanadditionalamountof$4.8(16*30%)astax,thentheactualincreaseofnetincomeis(16–4.8).HorriganCorporationROAAverag11DisaggregatingROAROA=ProfitMarginratio*AssetturnoverratioATOmeasuresthefirm’sAbilitytogeneratesalesAtagivenlevelofInvestmentinassetsPMmeasurestheFirm’sabilitytoControlcostandExpensesatagivenLevelofsalesActivity.DisaggregatingROAROA=Profit12HowtoincreaseROA?Atthecurrentassetbase,increasesales?ButincreasedsalesincreasesATOwhiledecreasesPMAdilemma!Soonehastoincreasesalesandatthesametimeholddowncostsandexpenses,i.e.,holdPMatcertainlevel.HowtoincreaseROA?Atthecur13HowtoincreaseROA?-2HowtoincreaseROA?-214TheevolutionofROAintheU.S.

thegraphsinthenextfewslidesarefromPenmanandNissimReviewofAccountingStudies,2001TheevolutionofROAintheU.15RNOA:Returnonnetoperatingassets

Regressiontothemean（回歸到平均值）RNOA:Returnonnetoperating16ProfitmarginProfitmargin17AssetturnoverAssetturnover18RevenuegrowthRevenuegrowth19DisaggregatePMPM=(sales–COGS–SGA–depreciation….)/Sales COGS-to-Salesratio Selling,Generalandadministrative(SGA)expense-to-salesratio Etc.Byobservingthetimeseriesandcross-sectionofeachexpense-to-salesration,onecanidentifyabnormalratiosandinvestigatethereasons,inordertocontrolcostsandexpensestoincreasePMDisaggregatePMPM=(sales–C20DisaggregateATOATO=Sales/averagetotalassetsAveragetotalassets=(averageaccountreceivables+averageinventory+averagefixedassets+averageotherassets)DisaggregateATOATO=Sales/av21AccountsreceivableturnoverMeasureshowquicklyafirmcollectscash.IfA.R.turnovertwiceayear,thentheyaverageonehalfofayearincollection.Lesstimeispreferredtomore.Ahighturnoverispreferredtoalowone.Thedaysofoutstandingforaccountreceivables:365days/accountsreceivableturnoverAccountsreceivableturnover22InventoryturnoverIndicateshowfastfirmssellmerchandise.Ifinventoryturnovertwiceayear,thentheyaverageonehalfofayearininventory.Holdinginventoryiscostlybecausethefundsinvestedininventorycouldbeusedelsewhere.Ahighturnoverispreferredtoalowone.Dayofinventoryinwarehouse:365/InventoryturnoverInventoryturnover23FixedassetturnoverMeasurestherelationbetweeninvestmentinlong-termorfixedassets(suchasproperty,plant,equipment)andsales.Efficientuseoffixedassetswouldbeassociatedwithhighsales.Iffixedassetsturnovereveryfouryears,theneachdollarinvestedinfixedassetsisgeneratingaquarterofadollarinsalesperyear.Ahighturnoverispreferredtoalowone.Fixedassetturnover24MBA財政會計實務(wù)英文版課件25ReturnonCommonEquity(ROCE)Thenumeratormeasuresreturnasnetincomereducedbyanypaymentstopreferredshareholdersasthesedividendsarenotavailabletothecommonshareholderandhavenotbeendeductedfromnetincome.ThedenominatoristheaverageamountcontributedbycommonshareholderswhichincludesCommonstockatpar,Additionalpaidincapital,andRetainedearnings.ReturnonCommonEquity(ROCE)26RelationbetweenROAandROCEROCEistheresidualreturnwhichgoestothecommonshareholders.Sinceitmaybelowinpooryearsbuthighingoodyears,ithasarisk,thatis,theresidualreturnisnotknown.Debtischaracterizedbyadefinitescheduleofpayments,sothereislittlerisktothedebtholders.Preferredstockislikedebt,thedividendsarespecified.However,debtorsmustbepaidbeforepreferredshareholdersandifthemoneyrunsout,thentheyaren'tpaid.RelationbetweenROAandROCER27RelationbetweenROAandROCEROAcanbedividedintoReturntocreditorsordebtorsReturntopreferredshareholders,andReturntocommonshareholders(ROCE)Becausethereturntodebtorsandpreferredshareholdersarefixed,ingoodyearswhenthefirmhashighreturns,thereisalotofprofitleftoverforthecommonshareholders;inpooryearswhenreturnsarelow,thereislittleormaybenoprofitleftover.RelationbetweenROAandROCER28RelationbetweenROAandROCEThus,ifROCEandROAwerebothlinear,thenROCEwouldhaveagreaterslopethanROA,thatis,itismorehighlylevered.Aprudentfirmwillborrowfundsonlywhenthereturnonthosemarginalfundsexceedthecostofborrowinggivinganetpositivereturntothecommonshareholder.ROCEcanbedisaggregatedintothreerelatedratios1.Profitmarginratio2.Totalassetsturnover3.LeverageratioRelationbetweenROAandROCET29RelationbetweenROAandROCEThefirsttwohavebeenpreviouslydefined.Leverageratioindicatestherelativeproportionofcapitalprovidedbycommonshareholdersasdistinctfromthatprovidedbycreditors(debtors)orpreferredshareholders.RelationbetweenROAandROCE30RelationbetweenROAandROCEAhighleverageratiomeansthatthefirmhasalotofassetsatitscommand,butthattheshareholdershavelessoftheirowninvestmentsatrisk.Thisisgoodingoodyearsbecausethecommonshareholderscaptureallprofitsoverwhatisneededtoservicethedebt.Thisisbadinpooryearsbecausethedebthastobeservicedwhetherornotthecommonshareholdersmakeaprofit.Therefore,borrowingisonlybeneficialwhenROAisgreaterthanthecosttoborrowmoneyRelationbetweenROAandROCEA31TheevolutionofROCEandnetborrowingcost(NBC)intheU.S.TheevolutionofROCEandnet32Debit-to-Equityratio(leverage)intheU.S.Debit-to-Equityratio(leverag33EarningsperShare(EPS)ofCommonStockThisratioistheprofitthatgoestoeachshareofcommonstock.Itwouldbesimplythenetincomelesspreferreddividendsdividedbythenumberofcommonshares.However,thenumberofcommonsharesiscomplicatedbycertainsecuritiesthatmaybecome(convertto)acommonshare.Howtoaccountfortheseisacomplexissue.Forexample,ifthereare100commonsharesbut50preferredsharesthatcouldconvertto50commonshares,doyoudivideearningsby100or150?Theanswerdependsonhowlikelyitisthattheconvertiblesecuritieswillconvert.EarningsperShare(EPS)ofCo34EarningsperShare(EPS)ofCommonStockEPSdoesnotconsidertheamountofassetsorcapitalrequiredtogenerateearnings.EPSisoflimiteduseincomparingtwofirms.Forinvestmentpurposes,thepricetoearningsratioissometimesused(P/Eratio).Thisisthereturntothepurchaserofashare.P/E=(marketpriceofashareofstock)/(EPS)AlowP/EispreferredtoahighP/E,sameearningsatalowerprice.EarningsperShare(EPS)ofCo35NorthwestAirlines2001NorthwestAirlines200136MBA財政會計實務(wù)英文版課件37演講完畢，謝謝觀看！演講完畢，謝謝觀看！38Outlineoftoday’slectureValueofafirmtoinvestorsandcreditorsAnalysisofprofitability:ROAAnalysisofprofitability:ROCEAnalysisofprofitability:EPSOutlineoftoday’slectureValu39ThevalueofafirmtoequityinvestorsV=D1/(1+r)+D2/(1+r)2+D3/(1+r)3…….profitabilityriskThevalueofafirmtoequity40ThevalueofafirmtocreditorsV=I1/(1+r)+I2/(1+r)2+I3/(1+r)3+P/(1+r)3

Ii:interestrevenuesinperiodiP:returnofprincipalprofitabilityriskThevalueofafirmtocredito41FinancialStatementAnalysis1.Understandtherelationbetweentheexpectedreturnandriskofinvestmentalternatives,andtheroleofanalysisinprovidingriskandreturninformation.2.Understandtheusefulnessoftherateofreturnonassets(ROA)asameasureofafirm’soperatingprofitability.3.Understandtheusefulnessoftherateofreturnoncommonshareholders’equity(ROCE)asameasureofprofitability.4.Understandthestrengthsandweaknessesofearningspercommonshareasameasureofprofitability.FinancialStatementAnalysis1.42Whattocompare?1. Theplannedratiofortheperiod2. Thecorrespondingratiofromapriorperiod(time-seriesanalysis)3. Thecorrespondingratioforanotherfirminthesameindustry(cross-sectionanalysis)4. Theaverageratioforotherfirmsinthesameindustry(cross-sectionanalysis)Whattocompare?1. Theplanned43AnalysisofProfitabilityReturnonassets(ROA):returntothefirmasawholeReturnoncommonequity(ROCE):returntocommonshareholdersonlyEarningspercommonshareAnalysisofProfitabilityRetur44AnalysisofProfitabilityROA:returntothefirmROCE:returntocommonShareholdersonlyAnalysisofProfitabilityROA:45ReturnonAssets(ROA)ROApresentsprofitabilityindependentofthesourceoffinancingDoesnotconsiderleverageMeasureofhowwellthefirmusesitsassetstogenerateincomeAsifthefirmisfinancedbyequityaloneReturnonAssets(ROA)ROApres46HorriganCorporationYear4SalesRevenue$475Lessexpense:

COGS280Selling53Administrative22Depreciation18Interest16Total

389Nextincomebeforetax

86Incometaxexpense26NextIncome

60HorriganCorporationYear4Sale47HorriganCorporation-assumingnodebtsYear4SalesRevenue$475Lessexpense:

COGS280Selling53Administrative22Depreciation18Interest16-16Total389-16=373Nextincomebeforetax86+16=102LessIncometaxexpense26+4.8=30.8NextIncome

60+16–4.8=71.2HorriganCorporation-assuming48HorriganCorporationROAAveragetotalassetsofthiscompanyinyear4(520+650)/2=585,ThenROA=71.2/585=12.2%Whyaddbackinterestincomenetofincometaxsavingsinthenumerator? 1)Ifallequity,thefirmwon’tpay$16

interest

expense,whichincreasenetincomeby$16; 2)at30%taxrate,governmentwillcollectanadditionalamountof$4.8(16*30%)astax,thentheactualincreaseofnetincomeis(16–4.8).HorriganCorporationROAAverag49DisaggregatingROAROA=ProfitMarginratio*AssetturnoverratioATOmeasuresthefirm’sAbilitytogeneratesalesAtagivenlevelofInvestmentinassetsPMmeasurestheFirm’sabilitytoControlcostandExpensesatagivenLevelofsalesActivity.DisaggregatingROAROA=Profit50HowtoincreaseROA?Atthecurrentassetbase,increasesales?ButincreasedsalesincreasesATOwhiledecreasesPMAdilemma!Soonehastoincreasesalesandatthesametimeholddowncostsandexpenses,i.e.,holdPMatcertainlevel.HowtoincreaseROA?Atthecur51HowtoincreaseROA?-2HowtoincreaseROA?-252TheevolutionofROAintheU.S.

thegraphsinthenextfewslidesarefromPenmanandNissimReviewofAccountingStudies,2001TheevolutionofROAintheU.53RNOA:Returnonnetoperatingassets

Regressiontothemean（回歸到平均值）RNOA:Returnonnetoperating54ProfitmarginProfitmargin55AssetturnoverAssetturnover56RevenuegrowthRevenuegrowth57DisaggregatePMPM=(sales–COGS–SGA–depreciation….)/Sales COGS-to-Salesratio Selling,Generalandadministrative(SGA)expense-to-salesratio Etc.Byobservingthetimeseriesandcross-sectionofeachexpense-to-salesration,onecanidentifyabnormalratiosandinvestigatethereasons,inordertocontrolcostsandexpensestoincreasePMDisaggregatePMPM=(sales–C58DisaggregateATOATO=Sales/averagetotalassetsAveragetotalassets=(averageaccountreceivables+averageinventory+averagefixedassets+averageotherassets)DisaggregateATOATO=Sales/av59AccountsreceivableturnoverMeasureshowquicklyafirmcollectscash.IfA.R.turnovertwiceayear,thentheyaverageonehalfofayearincollection.Lesstimeispreferredtomore.Ahighturnoverispreferredtoalowone.Thedaysofoutstandingforaccountreceivables:365days/accountsreceivableturnoverAccountsreceivableturnover60InventoryturnoverIndicateshowfastfirmssellmerchandise.Ifinventoryturnovertwiceayear,thentheyaverageonehalfofayearininventory.Holdinginventoryiscostlybecausethefundsinvestedininventorycouldbeusedelsewhere.Ahighturnoverispreferredtoalowone.Dayofinventoryinwarehouse:365/InventoryturnoverInventoryturnover61FixedassetturnoverMeasurestherelationbetweeninvestmentinlong-termorfixedassets(suchasproperty,plant,equipment)andsales.Efficientuseoffixedassetswouldbeassociatedwithhighsales.Iffixedassetsturnovereveryfouryears,theneachdollarinvestedinfixedassetsisgeneratingaquarterofadollarinsalesperyear.Ahighturnoverispreferredtoalowone.Fixedassetturnover62MBA財政會計實務(wù)英文版課件63ReturnonCommonEquity(ROCE)Thenumeratormeasuresreturnasnetincomereducedbyanypaymentstopreferredshareholdersasthesedividendsarenotavailabletothecommonshareholderandhavenotbeendeductedfromnetincome.ThedenominatoristheaverageamountcontributedbycommonshareholderswhichincludesCommonstockatpar,Additionalpaidincapital,andRetainedearnings.ReturnonCommonEquity(ROCE)64RelationbetweenROAandROCEROCEistheresidualreturnwhichgoestothecommonshareholders.Sinceitmaybelowinpooryearsbuthighingoodyears,ithasarisk,thatis,theresidualreturnisnotknown.Debtischaracterizedbyadefinitescheduleofpayments,sothereislittlerisktothedebtholders.Preferredstockislikedebt,thedividendsarespecified.However,debtorsmustbepaidbeforepreferredshareholdersandifthemoneyrunsout,thentheyaren'tpaid.RelationbetweenROAandROCER65RelationbetweenROAandROCEROAcanbedividedintoReturntocreditorsordebtorsReturntopreferredshareholders,andReturntocommonshareholders(ROCE)Becausethereturntodebtorsandpreferredshareholdersarefixed,ingoodyearswhenthefirmhashighreturns,thereisalotofprofitleftoverforthecommonshareholders;inpooryearswhenreturnsarelow,thereislittleormaybenoprofitleftover.RelationbetweenROAandROCER66RelationbetweenROAandROCEThus,ifROCEandROAwerebothlinear,thenROCEwouldhaveagreaterslopethanROA,thatis,itismorehighlylevered.Aprudentfirmwillborrowfundsonlywhenthereturnonthosemarginalfundsexceedthecostofborrowinggivinganetpositivereturntothecommonshareholder.ROCEcanbedisaggregatedintothreerelatedratios1.Profitmarginratio2.Totalassetsturnover3.LeverageratioRelationbetweenROAandROCET67RelationbetweenROAandROCEThefirsttwohavebeenpreviouslydefined.Leverageratioindicatestherelativeproportionofcapitalprovidedbycommonshareholdersasdistinctfromthatprovided