财务指标的讲义.pptx

RATIO ANALYSISRatio OverviewRatios provide a method of standardizationRatio Overview As mentioned ratios provide a method of standardization but more importantly - they provide a profile of firm’s economic characteristics and competitive strategies.Ratio OverviewAlthough extremely valuable as analytical tools, financial ratios also have limitations. They can serve as screening devices , indicate areas of potential strength or weakness, and reveal matters that need further investigation.Should be used in combination with other elements of financial analysis.There is no one definitive set of key ratios; There is no uniform definition for all ratios; and there is no standard that should be met for each ratio.There are no rules of thumb that apply to the interpretation of financial ratios.Caveatseconomic assumptions - linearity assumptionbenchmarkmanipulation – timing accounting methodsnegative numbersCommon Size Financial Statements Differences in firm size may confound cross sectional and time series analyses. To overcome this problem, common size statements are used.A common size balance sheet expresses each item on the balance sheet as a percentage of total assetsA common size income statement expresses each income statement category as a percentage of total sales revenuesA common size income statementFour categories of ratiosActivity ratios – the liquidity of specific assets and the efficiency of managing assetsLiquidity ratios – firms ability to meet cash needs as they ariseDebt and Solvency ratios – the extent of a firms financing with debt relative to equity and its ability to cover fixed chargesProfitability ratios – the overall performance of the firm and its efficiency in managing investment (assets, equity, capital)These categories are not distinct as we shall seeActivity? LiquidityActivity? ProfitabilitySolvency ?? Profitability A. ACTIVITY RATIOS:ASSET MANAGEMENT EFFICIENCYACTIVITY RATIOS: ASSET MANAGEMENT EFFICIENCYShort-term (operating) activ