财务报表分析课件Chapter01

Overview of Financial Statement AnalysisFinancial Statement Analysis1-2Lecturer： Xiao Min1CHAPTER1-3 1-4McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.Overview of Financial Statement Analysis   The role of financial report in capital market Business analysis Financial statement: basis of analysis Financial statement analysis review1-51-6Resource Allocation in Capital MarketEfficient Resource Allocation Needs Financial ReportInvestorFinancial intermediaryBank Mutual fund Issuance cop.InvestorInformation intermediaryAuditor Rating agencyAdverse selectionInformation asymmetryMoral riskEntrepreneurAnalystEntrepreneurInvestment cop.Accounting information helps to mitigate information asymmetry problemFinancial report plays a key role for financial intermediary and information intermediary.1-71-8Business AnalysisEvaluate Prospects Evaluate RisksBusiness Decision Makers1-91-10Information Sources for Business Analysis1-111-12Credit AnalysisCredit AnalysisCredit worthiness: Ability to honor credit obligations (downside risk)Liquidity Ability to meet shortterm obligations Focus: • Current cash flows • Make up of current assets and liabilities • Liquidity of assetsSolvency Ability to meet longterm obligations Focus: • Long-term profitability • Capital structure1-131-14Equity AnalysisAssessment of downside risk and upside potentialTechnical analysis / Charting • Patterns in price or volume history of a stock • Predict future price movementsFundamental Analysis Determine Intrinsic value without reference to price • Analyze and interpret key factors– Economy – Industry – Company1-151-16Accounting AnalysisProcess to evaluate and adjust financial statements to better reflect economic realityFinancial AnalysisProcess to evaluate financial position and performance using financial statementsProfitability analysis — Evaluate return on investments Risk analysis ——— Evaluate riskiness & creditworthiness Analysis of — cash flows Evaluate source & deployment of funds Common toolsAccounting RiskCash flow Ratio Analysis Analysis1-171-18Prospective AnalysisProcess to forecast future payoffsBusiness Environment & Strategy Analysis Accounting AnalysisFinancial AnalysisIntrinsic Value1-191-20Dynamics of Business ActivitiesBusiness Activities TimeBusiness Activities1-211-22Business ActivitiesBusiness ActivitiesFinancing activities • Owner (equity) • Nonowner (liabilities)Investing activities • Buying resources • Selling resources• Operating assetsFinancingInvestingFinancingLongtermShort -term• Financial assets • Current assets • Noncurrent assetsInvesting = Financing1-231-24Business ActivitiesFinancial Statements Reflect Business ActivitiesOperating ActivitiesRevenues and expenses from providing goods and services (R&D, Procurement, Production, Marketing, Administration)1-251-26Financial Statements1-271-28Balance SheetTotal Investing = Total Financing = Creditor Financing + Owner Financing1-291-30Income StatementRevenues – Cost of goods sold = Gross Profit Gross profit – Operating expenses = Operating ProfitColgate’s Profitability (in $billions) $12.238 - $5.536 = $6.701 Gross Profit $6.701 - $4.5411 = $2.160 Operating profit1-311-32Statement of Cash Flows1-331-34Additional Information(Beyond Financial Statements)Additional Information(Beyond Financial Statements)Management must highlight any favorable or unfavorable trends and identify significant events and uncertainties that affect a company’s liquidity, capital resources, and results of operations.1-351-36Additional Information(Beyond Financial Statements)To reinforce : (1) Senior management’s responsibilities for the company’s financial and internal control system. (2) The shared roles of management, directors, and the auditor in preparing financial statements.1-371-38Analysis PreviewYr1 Yr2 Yr3Analysis PreviewComparative Analysis Purpose: Evaluation of consecutive financial statements Output: Direction, speed, & extent of any trend(s) Types:  Year-to-year Change Analysis  Index-Number Trend Analysis1-391-40Analysis PreviewCommon-Size Analysis Purpose :  Evaluation of internal makeup of financial statements  Evaluation of financial statement accounts across companies Output: Proportionate size of assets, liabilities, equity, revenues, & expensesAnalysis Preview1-411-42Analysis PreviewAnalysis PreviewRatio AnalysisPurpose : Evaluate relation between two or more economically important items (one starting point for further analysis) Output: Mathematical expression of relation between two or more items Cautions:  Prior Accounting analysis is important  Interpretation is key - long vs short term & benchmarking1-431-44Analysis PreviewValuationValuation - an important goal of many types of business analysisAnalysis PreviewDebt (Bond) ValuationPurpose: Estimate intrinsic value of a company (or stock) Basis: Present value theory (time value of money)Bt is the value of the bond at time t It +n is the interest payment in period t+n F is the principal payment (usually the debt’s face value) r is the investor’s required interest rate (yield to maturity)1-451-46Analysis PreviewEquity ValuationAnalysis PreviewEquity Valuation - Free Cash Flow to Equity ModelVt is the value of an equity security at time t Dt +n is the dividend in period t+n k is the cost of capital E refers to expected dividendsFCFt+n is the free cash flow in the period t + n [often defined as cash flow from operations less capital expenditures] k is the cost of capital E refers to an expectation1-471-48Analysis PreviewEquity Valuation - Residual Income ModelBook & Course OrganizationBV is the book value at the end of period t Rit+n is the residual income in period t + n [defined as net income, NI, minus a charge on beginning book value, BV, or RIt = NIt - (k x BVt-1)] k is the cost of capital E refers to an expectationt1-49Summary   The role of financial report in capital market Business analysis Financial statement: basis of analysis Financial statement analysis review。