ch15 company analysis外文电子书籍.pptVIP

Company Analysis Chapter 15 Charles P. Jones, Investments: Analysis and Management, Ninth Edition, John Wiley Sons Prepared by G.D. Koppenhaver, Iowa State University Fundamental Analysis Last step in top-down approach is company analysis Fundamental analysis calls for the estimation of intrinsic value -using the DDM using the P/E ratio model we will use the P/E ratio model as our guide Stock is under- (over-) valued if intrinsic value is larger (smaller) than current market price Fundamental Analysis Goal: estimate share’s intrinsic value Constant growth version of dividend discount model Value justified by fundamentals Fundamental Analysis Earnings multiple could also be used P0=estimated EPS ? justified P/E ratio Focus on earnings and P/E ratio Dividends paid from earnings Close correlation between earnings and stock price changes The Importance of Earnings There is a close association between earnings changes and stock price changes Growth in reported earnings has been shown to affect stock prices significantly Accounting Aspects of Earnings How is EPS derived and what does EPS represent? Financial statements provide majority of financial information about firms Analysis implies comparison over time or with other firms in the same industry Focus on how statements used, not made The Accounting Aspects of Earnings The Balance Sheet shows the assets, liabilities, and owner’s equity for a company The income statement represents flows for a particular period, and shows the EPS The Statement of Cash Flows indicates the sources and uses of cash during a period Basic Financial Statements Balance Sheet Items listed in order of liquidity or in order of payment Assets Cash vs. non-cash assets Non-cash assets may be worth more or less than carried on books Depreciation methods for fixed assets Inventory evaluation choices Basic Financial Statements Balance Sheet Liabilities Fixed claims against the firm Equity Residual Adjusts when the value of assets chang