【基础金融英文版】AnalysisofFinancialStatements.pptVIP

Balance Sheet: Assets Liabilities and Equity Income Statement Other Data Why are ratios useful? Standardize numbers; facilitate comparisons Used to highlight weaknesses and strengths What are the five major categories of ratios, and what questions do they answer? Liquidity: Can we make required payments as they fall due? Asset management: Do we have the right amount of assets for the level of sales? Debt management: Do we have the right mix of debt and equity? Profitability: Do sales prices exceed unit costs, and are sales high enough as reflected in PM, ROE, and ROA? Market value: Do investors like what they see as reflected in P/E and M/B ratios? Calculate the firm’s forecasted current and quick ratios for 2002. Comments on CR and QR What is the inventory turnover ratio as compared to the industry average? Comments on Inventory Turnover Inventory turnover is below industry average. Firm might have old inventory, or its control might be poor. No improvement is currently forecasted. Appraisal of DSO Profit Margin (PM) BEP = = = 14.4%. BEP removes effect of taxes and financial leverage. Useful for comparison. Projected to be below average. Room for improvement. ROA = = = 7.3%. ROA is lowered by debt--interest expense lowers net income, which also lowers ROA. However, the use of debt lowers equity, and if equity is lowered more than net income, ROE would increase. Common Size Balance Sheets:Divide all items by Total Assets Divide all items by Total Liabilities Equity Analysis of Common Size Balance Sheets Computron has higher proportion of current assets (49.1%) than Industry (41.2%). Computron has slightly less equity (which means more debt) than Industry. Computron has more short-term debt than industry, but less long-term debt than industry. Common Size Income Statement:Divide all items by Sales Analysis of Common Size Income Statements Computron has higher COGS (86.7) than industry (84.5), but lower depreciation. Resul