chap010-Prospective-Analysis(财务报表分析-台湾中兴大学).ppt

Prospective Analysis * * 10 CHAPTER McGraw-Hill/Irwin ? 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Prospective Analysis Importance Security Valuation - free cash flow and residual income models require estimates of future financial statements. Management Assessment - forecasts of financial performance examine the viability of companies’ strategic plans. Assessment of Solvency - prospective analysis is useful to creditors to assess a company’s ability to meet debt service requirements, both short-term and long-term. The Projection Process Projected Income Statement Sales forecasts are a function of: Historical trends Expected level of macroeconomic activity The competitive landscape 4) Strategic initiatives of management The Projection Process Projected Income Statement Steps: Project sales Project cost of goods sold and gross profit margins using historical averages as a percent of sales Project SGA expenses using historical averages as a percent of sales Project depreciation expense as an historical average percentage of beginning-of-year depreciable assets Project interest expense as a percent of beginning-of-year interest-bearing debt using existing rates if fixed and projected rates if variable 6) Project tax expense as an average of historical tax expense to pre-tax income The Projection Process Target Corporation Projected Income Statement Sales: $43,115 = $39,888 X 1.0809 Gross profit: $13,665 = $43,115 X 31.69% Cost of goods sold: $29,450 = $43,115-$13,665 SGA: $9,602 = $43,115 X 22.27% Depreciation: $1,263 = $18,442(beginning-of-period PPE gross) X 6.85% Interest: $578 = $8,088 (beginning-of-period interest-bearing debt) X 7.15% Pretax income: $2,222 = $13,665-$9,602-$1,263-$578 Extraordinary and discontinued items: none 9) Net income: $1,378 = $2,222 - $844 The Projection Process Projected Income Statement The Projection Process Projected Balance Sheet Steps: Project current assets other than cash, using projected sales or cost