財(cái)務(wù)分析與證券定價(jià)(英文)chapter11

Chapter11TheAnalysisofProfitability1Links2WhatyouwilllearnfromthischapterHowreturnoncommonequity(ROCE)isbrokendownintoitsdriversHowfinancialleverageaffectsshareholderprofitabilityHowoperatingliabilityleverageaffectstheprofitabilityofoperationsThedifferencebetweenReturnonNetOperatingAssets(RNOA)andReturnonAssets(ROA)HowprofitmarginsandassetturnoversdriveRNOAHowborrowingcostsareanalyzedHowprofitabilityanalysisisusedtoask“whatif〞questionsinsensitivityanalysis3TheFocus:

Accounting-BasedValuationThetaskistodeterminepremiumsoverbookvalue(orequivalently,theP/Bratio)WhatwillfutureROCEbe?Whatwillbethegrowthinthefuture?Pointofdeparture:CurrentROCEandgrowthHowwillfutureROCEandgrowthbedifferentfromcurrentROCE? Thischapteranalyzescurrentprofitability Thenextchapteranalyzesgrowth4ForecastingandtheAnalysisofCurrentProfitabilityEstablishthepresent:Analysisofprofitability(inthischapter) Determinethecurrentprofitability(ROCE)andthefactorsthatinfluencetheprofitabilityDeterminetransitionfrompresenttofuture:Projectingfutureprofitability

(inPartIII) Determinefactorsthatinfluencefutureprofitabilityanddescribehowthefuturewillbedifferentfromthepresent

Thesecorrespondtosteps2and3offundamentalanalysis Thereformulationofthebalancesheetandincomestatementhasputthemintoaformtocarryoutstep2andtousethemtoforecastthefutureinstep35CuttingtotheCore:

ROCEDriversROCEisdecomposedintodriversoverthreelevelsofanalysis:EffectsofLeverageAnalysisofOperatingProfitabilityAnalysisofNetBorrowingCosts6Duetoformattingrestrictions,pleasemanuallyreplacethispagewithhardcopyofslidefromfile:

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7First-LevelBreakdown:AnalysisofEffectsofFinancialLeverage(FLEV)So,ROCEisaweightedreturntooperatingactivitiesandfinancingactivities:or,RNOA =OI(Aftertax)/NOA (ReturnonNetOperatingAssets)FLEV =NFO/CSE (FinancialLeverage)NBC =NFE(aftertax)/NFO (NetBorrowingCost)SPREAD =RNOA–NBC (OperatingSpread)Spread8HowFinancialLeverageExplainstheDifferenceBetweenROCEandRNOA9FinancialLeverage:

GeneralMills,Inc.

GeneralMills,alargemanufacturerofpackagedfoods,hashadconsiderablestockrepurchasesovertheyears.Attheendoffiscal1998commonshareholderequitywasonly$190.2milliononnetoperatingassetsof$2.251billion.Itsfinancialleveragewasahuge5.745,basedonaveragebalancesheetamounts.

Thefirm’sROCEfor1998was121.6%.Furtheranalysisrevealsthatthisveryhighnumberisdrivenbythehighleverage:

ROCE=RNOA+[FLEVx(RNOA

NBC)]

121.6%=21.6%+[5.745x(21.6%

4.2%)]

ROCEcanexaggerateunderlyingoperationalprofitability:RNOAis21.6%butthehighfinancialleverage,combinedwithaSPREADoveraborrowingcostof4.2%,yieldsamuchhigherROCE.BewareoffirmsboastinghighROCE:isitdrivenbyfinancialleverage?

AWhat-IfQuestion:WhatiftheRNOAatGeneralMillsfellto3%?WhatwouldbetheeffectonROCE?

TheansweristhattheROCEwouldfallto-3.9%:

-3.9%=3.0%+[5.745x(3.0%

4.2%)]

TheunfavorableleveragewouldproduceanegativeROCEonapositiveRNOA.

10MicrosoftCorphasbeenveryprofitable.Forfiscal1998thefirmreportedanROCEof36.3%onaveragecommonequityof$13.702billion.ButMicrosofthadnofinancingdebtotherthan$980millionofconvertiblepreferredstock.Andithadconsiderablefinancialassetsof$11.447billionfromcashgeneratedfromitsoperations.Thereturnonaveragenetfinancialassetswas8.0%(asignificantportionfromunrealizedgainsonfinancialassets).

ThereportedROCEmaskstheprofitabilityofoperations:TheRNOAof179.4%isweighteddownbyreturnonfinancingactivitiesintheoverallROCE.

AWhat-IfQuestion:Microsofthasregularstockrepurchases.Infiscal1998thecompanyused$2.796billionofitsfinancialassetstorepurchasestock.WhatwouldtheROCEhavebeenhaditnotundertakenthestockrepurchase?

Theanswer:

With$2.796billionmoreinaveragefinancialassetsandcommonequity,theNFAtoCSEratiowouldhavebeen0.863ratherthan0.835,andtheROCEwouldhavebeen:

31.5%=179.4%

[0.863x(179.4%8.0%)]

Stockrepurchases(anddividends)increaseROCE.

FinancialLeverage:

Microsoft,Corp.11TheEffectsofOperatingLiabilityLeverage(OLLEV) OperatingliabilitieslevertheReturnonNetOperatingAssets Whatwouldbetheoperatingprofitabilitywithoutoperatingliabilities? where

ImplicitInterestonOperatingLiabilities

=Short-termBorrowingRatexOperatingLiabilities TheEffectofOLLEV:

whereRNOA=ROOA+(OLLEVxOLSPREAD)

12OperatingLiabilityLeverage:GeneralMills,Inc.

GeneralMillshadaveragenetoperatingassetsof$2.310billionduringfiscal1998ofwhich$1.159billionwereinoperatingliabilitiesotherthandeferredtaxesandpensionliabilities.Thusitsoperatingliabilityleverageratiowas0.50.Itsborrowingrateonitsshort-termnotespayablewas5.4%,or3.4%aftertax.Itreportedoperatingincomeof$499.6million,butapplyingtheafter-taxshort-termborrowingratetooperatingliabilitiesotherthandeferredtaxandpensionliabilities,thisoperatingincomeincludesimplicitafter-taxinterestchargesof$39.4million.So,

Theeffectofoperatingliabilityleverageisfavorable:

AWhat-IfQuestion:What-ifsuppliersweretochargetheshort-termborrowingrateof5.4%explicitlyforthecreditinaccountspayable.WhatwouldbetheeffectonROCE?

Theanswer:Probablynoeffect.Theinterestwouldbeanadditionalexpense.But,tostaycompetitive,thesupplierwouldhavetoreducepricesofgoodssoldtothefirmbyacorrespondingamountsothatthetotalpricecharged(inimplicitplusexplicitinterest)remainsthesame.Butsuppliermarketsmaynotworkasefficientlyasthissupposes,sofirmscanexploitoperatingliabilityleverage.

13ReturnonNetOperatingAssetsandReturnonAssetsProblemswithROA:FinancialassetsindenominatorFinancialincomeinnumeratorOperatingliabilitiesnotindenominatorNetincomeisnotcomprehensiveincomeMedianROAis7.0%MedianRNOAis10.3%14RNOAandROAforSelectedFirms,199615FLEVandDebt-to-EquityRatiosProblemswithDebt-to-Equityratio:Excludesfinancialassets(whicheffectivelydefeasedebt)IncludesoperatingliabilitiesMedianDebt-to-Equityis1.17MedianFLEVis0.4016ReformulatedFinancialStatements:Nike,Inc.ReformulatedStatementsofCommonStockholders’Equity17Nike,Inc.1Cashandcashequivalentsaresplitbetweenoperatingcashandcashinvestments.2Someaccountspayableareinterestbearingbutthiscannotbediscovered.3Otherliabilitiesareprimarilylong-termdeferredendorsementpaymentsforpromotions.4Notespayableareinterestbearing.5Preferredstockislessthan$0.5million.ReformulatedBalanceSheets

18Nike,Inc.1Brokenoutfromsellingandadministrativeexpensesinpublishedincomestatement.2Includedin“otherexpense〞inincomestatement.Thenonrecurringchangesin1995and1994relatetoshutdownofcertainfacilities.3Marginaltaxratewas38.5%,38.5%and39.1%in1996,1995and1994,respectively.ReformulatedIncomeStatements

19ReformulatedFinancialStatements:

ReebokInternational,Ltd.ReformulatedStatementsofCommonStockholders’Equity20ReebokInternational,Ltd.1Cashandcashequivalentsdividedbetweenoperatingcashandcashinvestments.2Excludesdividendspayablewhichisincludedinstockholders’equity.ReformulatedBalanceSheets

21ReebokInternational,Ltd.1Brokenoutfromsellingandadministrativeexpensesinpublishedincomestatement.2Thechangein1995isduetoconsolidationandstreamliningoffacilitiesandtothesaleoftheAviasubsidiary.3Marginaltaxratewas35.4%,36.2%and36.9%for1996,1995and1994,respectively.ReformulatedIncomeStatements

22FirstLevelBreakdownofROCE:Nike,Inc.andReebokInt’l,Ltd.23Operatingprofitmargin:TheprofitabilityofeachdollarofsalesAssetturnover:TheabilitytogeneratesalesforagivenassetbaseEffectoffinancialleverageSecond-LevelBreakdownofROCE:

DriversofOperatingProfitability24ProfitMarginandAssetTurnoverCombinationsfor238Industries,1963-961 2 3 4 5 67AssetTurnover25TypicalLevelsforROCE,FLEV,OLLEV,RNOA,PMandATOSource:Standard&Poor’sCOMPUSTAT?

26Third-LevelBreakdownofROCE:ProfitMarginDrivers PM=SalesPM+OtheroperatingincomePMbyproduct

orlineofbusinessbenefit

orexpense?GM=Sales–CostofSales27Third-LevelBreakdownofROCE:AssetTurnoverDriversSometimesothermeasuresareused:DaysinAcc.Receivable=Acc.Receivable/Avg.SalesperdayInventoryTurnover=CostofSales/Avg.InventoriesAcc.PayableTurnover=Purchases/Avg.Acc.Payable28Third-LevelBreakdown:

Nike,Inc.andReebokInt’l,Ltd.29What-IfQuestions:

Nike,Inc.and