1、CHAPTER 15FINANCIAL STATEMENT ANALYSIS 财务报告分析财务报告分析1 Discuss the need for comparative analysis.2 Identify the tools of financial statement analysis.3 Explain and apply horizontal analysis.4 Describe and apply vertical analysis.5 Identify and compute ratios and describe their purpose and use in analy
2、zing a firms liquidity,profitability,and solvency.6 Understand the concept of earning power and indicate how material items not typical of regular operations are presented.7 Recognize the limitations of financial statement analysis.Analyzing financial statements involves Three characteristics of a c
3、ompany:(1)its liquidity流动性流动性,(2)its profitability盈利性盈利性,(3)its solvency偿付能力偿付能力.Every item reported in a financial statement has significance.BASICS OF BASICS OF FINANCIAL STATEMENT FINANCIAL STATEMENT ANALYSIS ANALYSIS 财务报表分析财务报表分析财务报表分析财务报表分析In order to obtain information as to whether the amount
4、 1 represents an increase over prior years or 2 is adequate in relation to the companys need for cash,the amount of cash must be compared with other financial statement data.Comparisons can be made on several difference bases three are illustrated in this chapter:(1)intra-company basis,(2)industry a
5、verages,and(3)inter-company basis.Three commonly used tools are utilized to evaluate the significance of financial statement data.(1)Horizontal analysis 横向分析横向分析(trend analysis)is a technique for evaluating a series of financial statement data over a period of time.TOOLS OF TOOLS OF FINANCIAL STATEM
6、ENT ANALYSISFINANCIAL STATEMENT ANALYSIS(2)Vertical analysis 纵向分析纵向分析 is a technique for evaluating financial statement data that expresses each item in a financial statement in terms of a percent of a base amount.(3)Ratio analysis比率分析比率分析 expresses the relationship among selected items of financial
7、 statement data.TOOLS OF TOOLS OF FINANCIAL STATEMENT ANALYSISFINANCIAL STATEMENT ANALYSISThe purpose of The purpose of horizontal analysishorizontal analysis is to is to determine the increase or decrease that has determine the increase or decrease that has taken place,taken place,expressed as eith
8、er an amount expressed as either an amount or a percentageor a percentage.The recent net sales.The recent net sales figures of Sears,Roebuck and Co.are figures of Sears,Roebuck and Co.are shown above.Given that 1996 is the base shown above.Given that 1996 is the base year,we can measure all percenta
9、ge year,we can measure all percentage increases or decreases from this base increases or decreases from this base period amount as shown below.period amount as shown below.SEARS ROEBUCKS NET SALESSEARS ROEBUCKS NET SALESChange since base period=SEARS ROEBUCKS NET SALESSEARS ROEBUCKS NET SALES1996199
10、719981999200036,66239,83739,95339,48440,937100%108.7%109%107.7%111.7%RATIO ANALYSIS RATIO ANALYSIS 比率分析比率分析比率分析比率分析 Ratio analysis expresses the relationship among selected items of financial statement data.A ratio expresses the mathematical relationship between one quantity and another.A single rat
11、io by itself is not very meaningful,in the upcoming illustrations we will use:RATIO ANALYSIS RATIO ANALYSIS 比率分析比率分析比率分析比率分析(1)Intra-company comparisons 公司自身比较公司自身比较 covering two years for the Quality Department Store.(2)Industry average comparisons行业比较行业比较 based on median ratios for department stor
12、es(3)Inter-company comparisons不同公司之间比不同公司之间比较较 based on Sears,Roebuck and Co.as Quality Department Stores principal competitor.FINANCIAL RATIO CLASSIFICATIONLiquidity Ratios 流动性比率流动性比率Measures of short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for ca
13、shProfitability Ratios 盈利比率盈利比率Measures of the income or operating success of an enterprise for a given period of timeSolvency Ratios 偿付能力比率偿付能力比率Measures of the ability of the enterprise to survive over a long period of timeCURRENT RATIO CURRENT RATIO 流动比率流动比率流动比率流动比率The current ratio(working capit
14、al ratio)is a widely used measure for evaluating a companys liquidity and short-term debt-paying ability.It is calculated by dividing current assets by current liabilities and is a more dependable indicator of liquidity than working capital.The current ratios for Quality Department Store and compara
15、tive data are shown below.CURRENT ASSETS CURRENT RATIO=CURRENT LIABILITIES Quality Department Store 20001999 2.96 3.1 Industry average Sears,Roebuck and Co.1.34 2.38 CURRENT ASSETS OF QUALITY CURRENT ASSETS OF QUALITY DEPARTMENT STOREDEPARTMENT STORE20001999Current assets Cash$100,000$155,000 Tempor
16、ary invest.20,00070,000 Receivables(net)230,000180,000 Inventory620,000500,000 Prepaid expenses50,00040,000Total current assets$1,020,000$945,000ACID-TEST RATIO ACID-TEST RATIO 酸性比率酸性比率酸性比率酸性比率The acid-test ratio(quick ratio)is a measure of a companys short-term liquidity and is calculated by dividi
17、ng the sum of cash,marketable securities,and net receivables by current liabilities.The acid-test ratios for Quality Department Store and comparative data are shown below.CASH+MARKETABLE SECURITIES+RECEIVABLES(NET)ACID-TEST RATIO=CURRENT LIABILITIES Quality Department Store 20001999 1.00 1.30Industr
18、y average Sears,Roebuck and Co.1.30 1.30 CURRENT CASH DEBT COVERAGE RATIOCURRENT CASH DEBT COVERAGE RATIOThe current cash debt coverage ratio usually provides a superior representation of liquidity since it uses not cash provided by operating activities rather than a balance at a point in time.Quali
19、ty Department Stores current cash debt coverage ratios for 2000 and 1999 are calculated below.CURRENT CASH DEBT NET CASH PROVIDED BY OPERATING ACTIVITIES COVERAGE RATIO =AVERAGE CURRENT LIABILITIES Quality Department Store 20001999 1.25 1.15Industry average Sears,Roebuck and Co.1.1 0.173 RECEIVABLES
20、 TURNOVER RECEIVABLES TURNOVER 应收账款周应收账款周应收账款周应收账款周转率转率转率转率The receivables turnover ratio is used to assess the liquidity of the receivables.It measures the number of times,on average,receivables are collected during the period.The ratio is calculated by dividing net credit sales by average net rece
21、ivables during the year.The receivables turnover ratio and comparative data for Quality Department Store for 2000 and 1999 are calculated below.NET CREDIT SALES RECEIVABLES TURNOVER=AVERAGE NET RECEIVABLES Quality Department Store 20001999 10.2 9.7Industry average Sears,Roebuck and Co.15.7 2.19 INVE
22、NTORY TURNOVER 存货周转率存货周转率The inventory turnover ratio measures the number of times,on average,the inventory is sold during the period which measures the liquidity of the inventory.It is calculated by dividing cost of goods sold by average inventory during the year.The inventory turnover ratio and co
23、mparative data for Quality Department Store for 2000 and 1999 are calculated below.COST OF GOODS SOLD INVENTORY TURNOVER=AVERAGE INVENTORY Quality Department Store 20001999 2.3 2.4 Industry average Sears,Roebuck and Co.6.22 4.61 PROFIT MARGIN RATIO 利润率利润率The profit margin ratio is a measure of the p
24、ercentage of each dollar of sales that results in net income.It is calculated by dividing net income by net sales for the period.The profit margin ratios and comparative data for Quality Department Store for 2000 and 1999 are calculated below.NET INCOME PROFIT MARGIN ON SALES=NET SALES Quality Depar
25、tment Store 20001999 12.6%11.4%Industry average Sears,Roebuck and Co.3.16%1.8%CASH RETURN ON SALES RATIOThe cash basis counterpart of the profit margin ratio is the cash return on sales ratio which uses net cash provided by operating activities as the numerator and net sales as the denominator.Using
26、 net cash provided by operating activities of$404,000 in 2000 and$340,000 in 1999,Quality Department Stores cash return on sales ratios are calculated and evaluated below.NET CASH PROVIDED BY OPERATING ACTIVITIES CASH RETURN ON SALES RATIO=NET SALES Quality Department Store 20001999 19.3%18.5%Indust
27、ry average Sears,Roebuck and Co.6.2%7.4%ASSET TURNOVER 资产周转率资产周转率The asset turnover ratio measures how efficiently a company uses its asset to generate sales.It is determined by dividing net sales by average assets for the period.Quality Department Stores cash return on sales ratios are calculated a
28、nd evaluated below.NET SALES ASSET TURNOVER=AVERAGE ASSETS Quality Department Store 20001999 1.2 times 1.21Industry average Sears,Roebuck and Co.2.32 1.1 times RETURN ON ASSETS 资产报酬率资产报酬率An overall measure of profitability is the return on assets ratio.It is calculated by dividing net income by aver
29、age assets for the period.Quality Department Stores return on assets ratios for 2000 and 1999 are calculated and evaluated below.NET INCOME RETURN ON ASSETS=AVERAGE ASSETS Quality Department Store 20001999 15.4%13.7%Industry average Sears,Roebuck and Co.7.42%1.99%RETURN ON COMMON STOCKHOLDERS EQUITY
30、 权益报酬率权益报酬率A ratio that measures profitability from the viewpoint of the common stockholder is return on common stockholders equity.It is calculated by dividing net income by average common stockholders equity for the period.Quality Department Stores return on common stockholders equity for 2000 and
31、 1999 are calculated and evaluated below.RETURN ON COMMON NET INCOME STOCKHOLDERS EQUITY=AVERAGE COMMON STOCKHOLDERS EQUITY Quality Department Store 20001999 29.3%28.5%Industry average Sears,Roebuck and Co.18.6%10.9%EARNINGS PER SHARE 每股收益每股收益Earnings per share(EPS)of common stock is a measure of ne
32、t income earned on each share of common stock.It is calculated by dividing net income by the number of weighted average common shares outstanding during the year.Quality Department Stores EPS for 2000 and 1999 are calculated and evaluated below.EARNINGS NET INCOME PER SHARE=WEIGHTED AVERAGE COMMON S
33、HARES OUTSTANDING Quality Department Store 20001999$0.97$0.77PRICE-EARNINGS RATIO 市盈率市盈率The price-earnings(PE)ratio measures the ratio of the market price of each share of common stock to the earnings per share.It is calculated by dividing the market price per share of common stock by earnings per s
34、hare.Quality Department Stores PE ratios for 2000 and 1999 are calculated and evaluated below.MARKET PRICE PER SHARE OF COMMON STOCK PRICE-EARNINGS RATIO=EARNINGS PER SHARE Quality Department Store 20001999 12.4 10.4Industry average Sears,Roebuck and Co.33 22PAYOUT RATIO 股利支付率股利支付率The payout ratio m
35、easures the percentage of earnings distributed in the form of cash dividends.It is calculated by dividing cash dividends by net income.Quality Department Stores payout ratios for 2000and 1999 are calculated and evaluated below.CASH DIVIDENDS PAYOUT RATIO=NET INCOME Quality Department Store 20001999
36、23.2%28.8%Industry average Sears,Roebuck and Co.17.5%44.5%DEBT TO TOTAL ASSETS 资产负债率资产负债率The debt to total assets ratio measures the percentage of total assets provided by creditors,indicating the degree of leveraging.It is calculated by dividing total debt by total assets.Quality Department Stores
37、total debt to total assets ratios for 2000 and 1999 are calculated and evaluated below.TOTAL DEBT DEBT TO TOTAL ASSETS=TOTAL ASSETS Quality Department Store 20001999 45.3%50.2%Industry average Sears,Roebuck and Co.42%81.7%TIMES INTEREST EARNED 利息获利倍数利息获利倍数The times interest earned ratio provides an
38、indication of the companys ability to meet interest payments as they come due.It is calculated by dividing income before income taxes and interest expense by interest expense.Quality Department Stores times interest earned ratios for 2000 and 1999 are calculated and evaluated below.TIMES INTEREST IN
39、COME BEFORE INCOME TAXES AND INTEREST EXPENSE EARNED =INTEREST EXPENSE Quality Department Store 20001999 13 times 9.6 Industry average Sears,Roebuck and Co.7.39 times 1.86 times CASH DEBT COVERAGE RATIOThe ratio of net cash provided by operating activities to average total liabilities is the cash de
40、bt coverage ratio and is a measure of solvency.Quality Department Stores cash debt coverage ratios for 2000 and 1999 are calculated and evaluated below.NET CASH PROVIDED BY OPERATING ACTIVITIES CASH DEBT COVERAGE RATIO=AVERAGE TOTAL LIABILITIES Quality Department Store 20001999 0.495 times 0.442 tim
41、es Industry average Sears,Roebuck and Co.0.38 times 0.09 times For users of financial statements to determine earning power获利能力获利能力 or regular income,the irregular items are separately identified on the income statement.Three types of irregular items are reported:(1)Discontinued operations 停业停业,(2)E
42、xtraordinary items 非常项目非常项目,and(3)Changes in accounting principle会计政策会计政策变化变化.EARNING POWEREARNING POWER AND AND IRREGULAR IRREGULAR ITEMS ITEMS 正常收益项目与非正常收益项目正常收益项目与非正常收益项目正常收益项目与非正常收益项目正常收益项目与非正常收益项目 Discontinued operations constitutes the disposal of a significant segment部门部门 of a business.The in
43、come(loss)from discontinued operations consists of(1)the income(loss)from operations and(2)the gain(loss)on disposal of the segment.DISCONTINUED OPERATIONSDISCONTINUED OPERATIONSSTATEMENT PRESENTATION OF STATEMENT PRESENTATION OF DISCONTINUED OPERATIONSDISCONTINUED OPERATIONSAcro Energy Inc.has reve
44、nues of$2.5 million and Acro Energy Inc.has revenues of$2.5 million and expenses of$1.7 million from continuing operations in expenses of$1.7 million from continuing operations in 2002.The company therefore has income before income 2002.The company therefore has income before income taxes of$800,000
45、.The company discontinued and sold taxes of$800,000.The company discontinued and sold its unprofitable chemical division during 2002.The 2002 its unprofitable chemical division during 2002.The 2002 loss from chemical operations was$140,000(net of loss from chemical operations was$140,000(net of$60,0
46、00 in income taxes),and the loss on disposal of the$60,000 in income taxes),and the loss on disposal of the chemical division(net of$30,000 in income taxes),was chemical division(net of$30,000 in income taxes),was$70,000.Given a 30%income tax rate,the partial$70,000.Given a 30%income tax rate,the pa
47、rtial income statement presentation is shown below.income statement presentation is shown below.Partial Income Statement Income from operations$560,000Less:loss from Discontinued operation(210,000)Net income 350,000 Extraordinary items are events and transactions that meet two conditions:they are(1)
48、unusual in nature and(2)infrequent in occurrence.Extraordinary items are reported net of taxes in a separate section of the income statement immediately below discontinued operations.EXTRAORDINARY ITEMS EXTRAORDINARY ITEMS 非常项目非常项目非常项目非常项目EXAMPLES OF EXTRAORDINARY items EXAMPLES OF EXTRAORDINARY ite
49、ms Effect of major casualties(acts of God)Property takeover by a foreign governmentEffects of newly enacted lawDestruction of property by fire Partial Income Statement Income from operations$560,000Less:loss from Discontinued operation(210,000)Income before extraordinary item 350,000Less:extraordina
50、ry item(49,000)Net income 301,000 To make them comparable,financial statements are expected to be prepared on a basis consistent with that used in the preceding period.A change in accounting principle occurs when the principle used in the current year is different from the one used in the preceding
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