《财务管理基础 沈洪涛》ch03.pptVIP

CHAPTER 3Analysis of Financial Statements Ratio Analysis Du Pont system Effects of improving ratios Limitations of ratio analysis Qualitative factors Balance Sheet: Assets Cash A/R Inventories Total CA Gross FA Less: Dep. Net FA Total Assets Balance sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L E Income statement Sales COGS Other expenses EBITDA Depr. Amort. EBIT Interest Exp. EBT Taxes Net income Other data No. of shares EPS DPS Stock price Lease pmts Why are ratios useful? Ratios standardize numbers and facilitate comparisons. Ratios are 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? Asset management: right amount of assets vs. sales? Debt management: 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 D’Leon’s forecasted current ratio for 2003. Current ratio Current assets / Current liabilities $2,680 / $1,145 2.34x Comments on current ratio What is the inventory turnover vs. the industry average? Comments on Inventory Turnover Inventory turnover is below industry average. D’Leon might have old inventory, or its control might be poor. No improvement is currently forecasted. DSO is the average number of days after making a sale before receiving cash. DSO Receivables / Average sales per day Receivables / Sales/365 $878 / $7,036/365 45.6 Appraisal of DSO Fixed asset and total asset turnover ratios vs. the industry average FA turnover Sales / Net fixed assets $7,036 / $817 8.61x TA turnover Sales / Total assets $7,036 / $3,497 2.01x Evaluating the FA turnover and TA turnover ratios Calculate the debt ratio, TIE, and EBITDA coverage ratios. Debt r