財務報表分析 Financial Statements Analysis

Financial Statements  Balance Sheet  Income Statement  The Statement of Cash Flow

Balance sheet  Assets = Liability + Equity  Current assets –Cash, bills, and currency –Marketable securities –Accounts receivable –Inventories  Plant assets –Gross plant and equipment gross plant assets –Accumulated depreciation –Net plant and equipment  Intangible assets

Liabilities  Current liabilities –Accounts payable –Wages and salaries payable –Current portion of long-term indebtedness –Short term bank loans  Long-term liabilities –Notes and bonds –Capital lease –Deferred taxes:

Equity  Book value of equity  Par value  Additional paid-in-capital  Treasury stock  Retained earnings

The income statement  Revenues - Expenses = Income  Sales or revenues  Cost of goods sold  Gross profit  Operating profit  Net income  Earning available to common shareholders

The statement of cash flows  Cash flow from operating activities  Cash flow from investing and financing activities

The Sources and Uses of Cash  SourcesUses Decrease in nay assetIncrease in any asset Increase in any liabilityDecrease in any liability Net profit after taxesNet loss Sales of stockDividends paid Depreciation and otherRepurchase or retirement of stock noncash charge

Book Value vs. Market Value  Book Value  Market Value

ACCOUNTING v.s. FINANCIAL MANAGEMENT  ACCOUNTING  FINANCIAL MANAGEMENT

Financial ratio analysis  Financial ratio analysis involves methods of calculating and interpreting financial ratios in order to assess a firm’s performance or status.

Steps 1. What is the definition? 2. How to calculate? 3. Is the number food or bad? Time-series analysis Cross-sectional analysis 4. Why? 5. What to do?

Financial Ratios Liquidity Asset Management Debt Management Profitability Market value

Liquidity  Current ratio: current assets/current liabilities  Quick ratio(acid-test): (current assets- inventories)/current liabilities

Asset Management  Inventory turnover:sales/inventories  Days sales outstanding:receivables/(daily sales)  Fixed assets turnover:sales/net fixed assets  Total assets turnover:sales/total assets

Debt Management  Total debt to total assets:total debts/total assets  Times-interest-earned (TIE):EBIT/interest charges

Profitability  Profit margin on sales:net income available to common stockholders/sales  Basic earning power (BEP):EBIT/total assets  Return on total assets (ROA):net income available to common stockholders/total assets  Return on common equity (ROE):net income available to common stockholders/common equity

Market value  Price/earnings (P/E):price per share/earnings per share  Market/book (M/B):market price per share/book value per share

Du Pont Equation  ROA=profit margin x total assets turnover  ROE=profit margin x total assets turnover x equity multiplier or = ROA x Equity Multiplier